Introduction
EBay is one of the key players in the online shopping industry. According to Hudson, eBay host around 200million buyers or shoppers and various business transacting in the site (1). Originally, eBay started as an online garage-sale-style auction but currently eBay has evolved to be the world force in the retail industry. The marketplace has various frameworks for selling various products or items for both the small and large businesses. Hudson notes that, eBay is the place to go while one is looking for discount on items and unique collectibles (2).
Just like other forms of business, this online system accrues a lot of benefits to the businesses regardless of their sizes. However, with the eBay enormous popularity it becomes very difficult for individuals to make profits unless the product or items being sold are unique or a collectible. On the other hand, the small business owners as well experience difficulty in making substantial or reasonable profits. This is because there are many individuals and businesses selling the same item thereby forcing prices to go down to levels of cut throat to the profits. In addition, the eBay charges for the application of the website in the sale of the items, which further cuts profits to individuals and small businesses. As such, the business at eBay is both beneficial to the businesses, buyers or shoppers but also detrimental to the small business profit margins. This result in stylistic auction or marketing at eBay for better business performance. This particular paper, therefore, addresses how the participants in eBay auction (market) their items competitively to be purchased by shoppers.
Benefits of eBay Auction
There is a variety of selling alternatives available to EBay participants that have made it enticing for the many business owners to engage. Procedurally, the high number of merchants on eBay leads to the need for various new businesses to develop effective auction styles in order to succeed. With the main focus on consumer base, the auctioneers segment the market in order to succeed. eBay is a monopolistic market where the shoppers and sellers interact for exchange of goods and services. To ensure effective marketplace, eBay has the payment and communication aspect. PayPal accelerates payment for the transactions and allows it users to utilize the eBay.com for communication platform between the shoppers and buyers.
The sellers or business organizations on eBay utilizes the online auction to reach their target customers. The very many sellers, retailers, and vendors competitively attract many buyers and shoppers to purchase their products. The online auction at eBay is both beneficial to the sellers as well as the buyers. The sellers reveal the product information to the potential shoppers across the globe. As such, the selling cost of the product is relatively reduced through the online trading. While on the side of the buyers, they can access information pertaining to the various products or items offered by different sellers across the world. Hudson argues that, the large number of buyers or shoppers and suppliers, therefore, benefits from the competitive market nature that leads to cheap or quality products sold at the online marketplace (5).
Auction Styles and the decisions made by sellers
eBay is characterized by different bidding styles that are utilized by the sellers in the marketplace to sell their items or products to the shoppers. eBay adopts an auction style listing called proxy bidding. In this auction style, the winner of the bid pays the second highest bid and one bid incremental amount. This means that the winning bidder pays some small amount that is relative to the bid size. The winning bid is then sealed, and the second highest (the current winning bid) remains displayed in the rest of the auction to allow price discovery. In doing this, the seller can sell the product to highest bidder (customer) who can pay for price recoveries.
However, this system imposes some challenges to the customers due inadequate information with respect to the items that they bid. Due to this, eBay tracks ratings for the sellers which help the shoppers to make an informed decision from which sellers to buy items or products from. Before any auction in the eBay website, the sellers allowed to choose shipping options to offer to the buyers. On the other side, eBay website allows the buyers to choose which option or alternative to choose. When a buyer purchases an item or product from the seller, he then pays an additional fee for shipping of the product. The used shipper in the case is Pitney Bowes that finally delivers the item to the buyer.
eBay uses Bidder's Edge as an auction tool. The tool is aggregated into the eBay website designed to offer an online auction shopper with the ability to search or look for items across the various online auctions without searching the individual host sites. Hudson notes that, eBay is a customer to seller trading site. Individuals or organizations put goods or items for auction and other organizations and people bid for these items (10). The bidder's edge allows the customers to get to relevant information pertaining to the product on one site. However, this technique has been despised on the basis of slowing the EBay system.
When a customer or shopper places a bid on any item, then it is said that, he or she has entered a contractual agreement with the seller. Peel noted that, the individual numerous auction have minimum starting bids and sometimes possess reserve price (2). The secret minimum amount is reserved since that is the price at which the bidder is willing to accept the item. The buyers and shoppers access what they like, make a decision to purchase it, pay for it and wait for the good at the door step. The auction listings give the buyers the option of "Buy it Now" at a price higher than the auction starting price
In conclusion, eBay is the leading online marketplace for the buyers and sellers. This is a very popular business and successful among the world shoppers and sellers. The business achievement has been attributed to the deviation from the traditional business models that did not utilize the technological advances to improve both the consumers and seller experience. eBay business is based on the online auction bidding listings that enable the buyers and sellers transact or trade. The eBay website enables the buyer or shoppers to create their user accounts that are used for business transactions within the site. The sellers on eBay places their items for bids and the customers can select from the several sellers based on the competitiveness of the bids. Even though, the highest bidder stands to take the commodity, it is sealed then the second highest bidder speculates the price of the commodity.
The business on eBay is an innovative online auction with ease of shopping for buyers. The business model allows people to sell personal goods at any time through internet access. eBay is advantageous in that it reaches all the customers and buyers across the globe. Its services are incorporated with payment services, shipping alternatives and communication platform. The services provide the sellers and shoppers with efficient and effective trading options. For instance, Paypal enhances payment services while eBay.com serves as communication platform for sellers as well as buyers. In regard to the business decision, the transacting parties engage competitive prices as the basis of business transaction within the site.
Works Cited
Hudson, Chuck. Ebay Commerce Cookbook. Sebastopol: O'Reilly, 2012. Print.
Peel, Ian. The Rough Guide to Saving & Selling Online. London: Rough Guides, 2010. Print.
