e-Bay case study
Introduction
eBay is an online seller. There is no need for intermediary in this type of business. It’s an ecommerce seller. There is a direct sale from seller to customer. All the activities of an intermediary are undertaken by the company itself.
Channel of distribution feasible for eBay
Producer consumer
This is because eBay operates on a direct channel of distribution. Here the producer is selling directly to the consumer without the help of intermediaries. Direct channel involves selling face to face, or sales through computers or mails, etc. but there is no involvement of any distributor or any intermediary. There is just one original producer who is selling the product and no other middlemen. The advantage of using this channel is that the producer can connect directly with the consumer. This kind of selling technique has low cost and low overheads. It gives the producer a far better reach to a mass market rather than the intermediary route. The direct distribution channel tends to give more profits to the seller. It is also feasible for consumers because the selling takes place all through the year and throughout the day (Zeckhauser, 2001).
Target market of eBay
The primary target market of eBay is the online shopping community and the online auction community. the main business segment of the company is “Antiques and Collectibles”. Then there is another community that is basically the art lovers and motor lovers. eBay has vast variety of customers. Initially it was an auction site. But now it has evolved as a proper ecommerce retail site. So the variety of customers has increases manifold. There are various customers who do not have time to shop or do not like to visit malls for shopping. They look for sites like eBay to undertake effective sales because of discounts and other good deals available on it.
Product attributes
eBay offers a common marketplace for selling goods and services. It provides both online payment and communication services to customers. The products that are sold at eBay range from antiques, decoration pieces, machines, PCs, laptops, fixtures and fittings, parts of vehicles, consumer items that are bought and sold regularly, etc. eBay offers a convenient service of “Bill me Later” that ensures safe and easy option for making payment over web. Rent.com is a subsidiary of the company working as an online rental site. Shopping.com is another online community of eBay that provides services like price comparisons of products and is operational in various countries. StubHub is another subsidiary of the company that supports online sales of tickets of various sports, musical and theatre events (Wooders, 2000). Skype is another major site owned by the company that provides free calling, messaging, chat, video calling options, etc. amongst the various members of the Skype community. Half.com is another subsidiary engaged in selling goods at fixed rates. These are those items that are particularly unique and rare like precious books, music, movies, video games, etc.
Environmental factors
Environmental factors consists of competitors that are operating within the same industry. The online auction market is going considerable change. There have been many new entrants. The reasons being that there are no technological hinderances. Customers are easy to attract but their retention is important. The key success factor in the online industry is the expertise in technology and handling of customer traffic. eBay has generated a lot of traffic since its start up. It has expanded in various markets internationally. It aims at satisfying small as well as big customers. Since the company offers a wide range of products it is difficult for competitors to offer any differentiated product to lure customers. Plus the name eBay is a big brand name that is linked with online auctions.
Physical distribution at eBay
The physical distribution model at eBay is not like the traditional business model. The company brings products to the customers. Customers can advertise their products which they intend to sell by placing add on the site, creating auction list, handling payment, delivery everything on their own. They need to pay some percentage fixed of the selling price to the company. Rest everything is between the buyer and seller. So there is no need for any warehousing and transportation (Alm, 2001).
References
Alm, J. “Does a Seller’s eCommerce Reputation Matter?” Working paper, Georgia State University, 2001. Web. 16 November 2013.
Wooders, J. “Reputation in Auctions: Theory, and Evidence from eBay.” Working paper, University of Arizona, 2000. Web. 16 November 2013.
Zeckhauser, R. “Trust among Strangers in Internet Transactions: Empirical Analysis of eBay’s Reputation System.” Working paper, University of Michigan, 2001. Web. 16 November 2013.
