ebaY

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ebaY

• Özgür AKSOY
• 40774112
• May 2006

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Internet Auctions

• Internet auctions are often called online
  marketplaces. They bring buyers and sellers
  together on the Internet for the purpose of
  trading goods and services. Most auction sites do
  not actually sell any products or services that
  they own themselves. They simply act as hosts
  or facilitators and provide the necessary
  structure for listing, displaying, bidding, and
  paying for goods and services online.
• The auction site functions like a local farmers
  market its essentially a meeting place to buy
  and sell goods that vendors have brought with
  them from elsewhere.

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History of eBay

• eBay is one of the great successes of
  e-business. It started in 1995 when Pierre
  Omidyars fiancée mentioned that she would like
  to be able to use the internet to trade Pez
  dispensers with other collectors. Omidyar, en
  engineer at General Magic, decided to start an
  online auction in which individuals could sell
  collectibles and used items to other individuals.

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Fast Rise of eBay

• By mid-2000 eBay had 15.8 million registered
  users, and was hosting nearly 4 million auctions,
  with over 450000 new items in 4320 categories
  joining the for sale list every 24 hours.

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What is eBay?

• eBay is an online auction website.
• No inventory, warehouses, sales force
• Generate revenue one transaction at a time
• A complementary marketing and sales channel
• Intersection between commerce and Community
  people following their passions
• Think town square marketplace, with virtual
  reputation through feedback

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Homepage of eBay Australia
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eBay International
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Number of Registered Users
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Gross Merchandise Volume
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How eBay Works

• Buyers and sellers meet and transact on eBay
• Sellers list items one at a time or in bulk, at
  fixed or dynamic (auction) prices
• Buyers pay sellers directly
• Sellers ship the item after getting paid
• Buyer and seller leave feedback for each other
• eBay charges sellers for listing items and a
  success fee if item sells

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Live Help

• eBays live help is offered via a chat window.
  You can direct any inquiries to representative in
  an online chat.

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Some Spectacular Facts
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Some Spectacular Facts (cont.)
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Some Spectacular Facts (cont.)
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Trust Mechanisms

• Feedback Forum
• Both seller and buyer leave ( or or neutral)
  feedback for each other.
• Buyer Protection Program
• May cover up to 1500 on purchases. Works as an
  insurance.
• User Identity Verification
• Other Security Services
• eBay has a security centre that offers all the
  above and much more.

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eBays Sub-Organizations
PayPal is an eBay company which allows the
transfer of money between email users and
merchants, avoiding traditional paper methods
such as checks/cheques and money orders. PayPal
also performs payment processing for e-commerce
vendors, auction sites, and other corporate
users, for which they charge a fee.
Skype is a voice chat program working on a VoIP
protocol. It features text messaging, voice chat
and net meeting. Recently acquired by eBay who
aims to increase level of communication between
users with Skype. (Reached 100 million users
recently)
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References

• Turban et al (2006), Electronic Commerce A
  Managerial Perspective, Pearson Educational, New
  Jersey, USA
• Alter S. (2002), Information Systems The
  Foundation of E-Business, Pearson Educational,
  New Jersey, USA
• www.ebay.com Online
• www.ebay.com.au Online
• www.auctionbytes.com Online

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• Question 1. Discuss the advantages of dynamic
  pricing over fixed pricing. What are the
  potential disadvantages?
• Dynamic pricing is determined based on supply
  and demand relationships. It provides a balanced
  pricing. Each item has a market value and it may
  be fixed priced below or above market price. In
  dynamic pricing usually the item is sold at a
  equilibrium price.
• But when human factor is considered, dynamic
  pricing may end up with extreme results. Ambition
  of bidders in a competitive environment may cause
  the item to be sold above its value.

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• Question 3. Find some material on why individuals
  like C2C auctions so much. Write a report.
• In C2C items most of the items listed are second
  hand, therefore they are cheaper. Even it is a
  brand new item, seller avoids paying a tax which
  makes it cheaper again. Online auctions are like
  entertaining strategic games which millions of
  people enjoy.
• From sellers point of view, C2C auctions are a
  way of making money at home. The situation
  attracts students, housewives, pensioners, etc.
• Stores use auctions as a efficient distribution
  channel and they find a lot of new customers.

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• Question 6. Identify three fraud practices in
  which a buyer might engage. How can sellers
  protect themselves?
• Bid Shielding The use of phantom bidders to bid
  at a very high price when an auction begins is
  called bid shielding. The phantom bidders pull
  out at the last minute and the bidder (the friend
  of the phantom bidder) who bids with a very low
  price wins. A solution to this kind of fraud is
  to forbid bidders to pull out bids in the last 12
  hours of the auction.
• Switch and Return The seller has successfully
  auctioned an item but when the buyer receives it,
  the buyer is not satisfied. The seller offers a
  cheerful refund. However, what the seller gets
  back is a mess that does not much resemble the
  item that was originally shipped. Some buyers may
  attempt to swap out their junk for someone elses
  jewels. A solution to this kind of fraud is to
  require a minutes from buyer drawn by the
  delivery company reporting that the items
  details.
• Failure to Pay Buyers do not pay after a deal is
  agreed upon. Sellers may accept bids only from
  buyers with a good reputation to protect
  themselves.

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Discussion Questions

• Question 1. Have you ever bought or sold on an
  internet auction website? If yes, is your opinion
  positive or negative with your experience? If no,
  is there a specific reason to avoid using them?
• Question 2. What is your overall opinion about
  C2C e-commerce and internet auctions?