In the early years of the auction it is found to have been rapidly gaining momentum, turning out the ordinary "flea market" into serious "B2C" portal, where customers have both legal and natural persona. Its main advantage was that this auction did not charge commissions while their contemporary competitors i.e. auctions charged 30% of the transaction value.
After AuctionWeb had become the most popular auction in the US, Pierre Omidyar realized that this business strategy has reached its conclusion. After the business maintenance costs began to grow, he decided to introduce a fee of 6% of the value of the goods. Now eBay is one of the most expensive companies amongst the US Internet business organizations. On January 18, 2012, on the NASDAQ closing auction, one share of eBay was worth 30.34 dollars, and market capitalization amounted to 39.4 billion dollars and this showcases eBay’s steady growth and dominance in the online auction industry.
In 2009, the company had recorded a profit of 684.45 million dollars. In 2010, according to the company's financial report, profit reached 809.84 million, 18.31% more than in 2009. The annual turnover in 2010 amounted to 9.5 billion dollars, it amounted to something worth more than 53 billion dollars across the area, of which sales in the US amounted to the sum of over 20 billion dollars, and the rest could be amassed from other countries. The basic idea is to give eBay sellers an online platform for the sale of any goods. The firm, eBay acts only as an intermediary in the contract of sale between the seller and the buyer. Payment for the product and its transmission occurs without eBay.
At eBay, there are financial guarantees and compensation for customers in the event of malfunction of the Website. eBay rules provide cash and credit incentives to participants online auctions where unplanned unavailability of website for more than 2 hours can be found; whereas eBay also provides compensation for a lot of failures in the system search that occur due to problems on the site. EBay is taking steps to improve the scanning of content. It is to be mentioned that despite having an outstanding growth performance, eBay faces certain challenges specifically in the form of low entry barriers attracting several dot-com competitors that pose significant threat to eBay’s market share and the specified sustainable profitability.
Today, the auction successfully operates in more than 20 countries. Among them are young and rapidly developing markets of China and India. The auction site offers many additional services that make buying and selling process more comfortable.
These are inclusive of:
eBay Pulse, with the help of which one can see the most popular queries on the site;
eBay Express - a kind of jacket online auction, which turns it into a virtually full-fledged online store;
Best of eBay - allows one to view the interesting and unusual items.
The popularity of e-commerce in relation to the tremendous growth of Internet has marked the rise of eBay in the online business world. On grounds of offering innovative products, the online business enterprise has embraced trending trade measures of contemporary age and that is the precise reason why the business of eBay is a prominent competitive figure in the $10 trillion retail market alongside $500 billion e-commerce market. The strategic approach of eBay inclusive of unique products, prevalent community sense and aggressive expansion has aided in the prosperity and growth of the e-commerce joint; while the market-leading brand has immense scope to cash on to in order to reign supreme in the global Internet market.
References
Dess, G. G., Lumpkin, G. T., & Eisner, A. B. (2014). Strategic management: Creating competitive advantage. Massachusetts: McGraw-Hill/Irwin. Retrieved On July 5, 2016
