Electronic Business is about the use of Internet and ICT to execute all the business processes in the organization. It includes e-Commerce as well as processes for the internal and external Management of the firm and for coordination with suppliers, customers, associate companies, business partners and sometimes even with competitors who may end up as industry partners.
e-Commerce consists primarily of the key business roles of distributing, buying, selling, marketing, and servicing of products or services over technology (ICT) industry might see it as an electronic business application aimed at commercial transactions
It can involve electronic funds transfer, supply chain management (SCM), e-marketing, online marketing, online transaction processing, electronic data interchange (EDI), automated inventory management systems, and automated data collection systems. It typically uses electronic communications technology such as the Internet, extranets, e-mail, e-books, databases, and mobile phones.
For this project, we have chosen to examine and evaluate on eBay, which is the world's largest online auction site. We will study its purpose, features, designs, strength and weaknesses of the site.
Introduction
eBay was founded on September 3, 1995 by computer programmer Pierre Omidyar. eBay is an American internet company that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell goods and services worldwide. In addition to its original U.S. website, eBay has established localized websites in several other countries. eBay also owns PayPal, Skype, and other businesses. eBay started as a place to trade collectables and hard-to-find items. Today, eBay is a global marketplace where businesses and individuals can buy and sell practically anything. Here, he proved that effective communication was possible. Although eBay is a global company, eBay.com.sg offers a trading platform tailored to the unique needs of Singaporeans. The eBay community consists of both passionate Singaporeans and international buyers and sellers trading in a variety of goods.
eBay was founded on September 3, 1995 by computer programmer Pierre Omidyar. eBay is an American internet company that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell goods and services worldwide. In addition to its original U.S. website, eBay has established localized websites in several other countries. eBay also owns PayPal, Skype, and other businesses. eBay started as a place to trade collectables and hard-to-find items. Today, eBay is a global marketplace where businesses and individuals can buy and sell practically anything. Here, he proved that effective communication was possible. Although eBay is a global company, eBay.com.sg offers a trading platform tailored to the unique needs of Singaporeans. The eBay community consists of both passionate Singaporeans and international buyers and sellers trading in a variety of goods.
Mission
Giving back to the community has been an essential part of eBay since the very beginning. In 1998, with a donation of 107,250 shares of pre-IPO stock, eBay created a charitable fund known as the eBay Foundation™. Today, eBay Foundation remains an important part of eBay and serves as the primary vehicle through which eBay contributes to community organizations. Annually, eBay Foundation provides grants to numerous non-profit groups that are working to make local communities better places to live and work. Since its inception, eBay Foundation has contributed more than $8 million to non-profit organizations.
Purposes
eBay.Inc pioneers communities built on commerce, sustained by trust, and inspired by opportunity. eBay brings together millions of people every day on a local, national and international basis through an array of websites that focus on commerce, payments and communications.
The eBay Community is made up of more than 100 million people around the world who buy and sell in the eBay marketplace. The users include individual buyers and sellers, small businesses, and even enterprises. From the buyer who shops on eBay for practical needs, to the seller who relies on eBay as a primary source of income.
Their community encourages open and honest communication among all its members. It is guided by five fundamental values:
- People are basically good.
- Everyone has something to contribute.
- An honest, open environment can bring out the best in people.
- Recognize and respect everyone as a unique individual.
- Treat others the way you want to be treated.
There is also an eBay Marketplace, which creates a powerful online platform for the sale of goods and services by a passionate community of individuals and small businesses. On any given day, there are millions of items available through auction-style and fixed-price trading.
Features
Business Model
eBay uses the online auction business model (Consumer to Consumer) where participants bids for products and services over the internet. Like most auction companies, eBay does not actually sell goods that it owns itself. It merely facilitates the process of listing and displaying goods, bidding on items, and paying for them. It acts as a marketplace for individuals and businesses who ranges from shopping on eBay for practical needs or for fun, to the seller who relies on eBay as a primary source of income. Millions of collectables, appliances, computers, furniture, equipment, vehicles, and other miscellaneous items are listed, bought, and sold daily.
eBay uses the online auction business model (Consumer to Consumer) where participants bids for products and services over the internet. Like most auction companies, eBay does not actually sell goods that it owns itself. It merely facilitates the process of listing and displaying goods, bidding on items, and paying for them. It acts as a marketplace for individuals and businesses who ranges from shopping on eBay for practical needs or for fun, to the seller who relies on eBay as a primary source of income. Millions of collectables, appliances, computers, furniture, equipment, vehicles, and other miscellaneous items are listed, bought, and sold daily.
The auction is hereby another virtual ‘district’ at which people are exposed to a fair amount of information about both the products and their prices.
Besides, Ebay, well known now as an established virtual ‘district’ for interested bidders, buyers, sellers as well as advertisers, no doubt make use of the effective deployment of the ICT to meet its busniess goal.
The very fact that ebay has gone global has already secured ebay a community of more than 100 million people. This was an important factor that contributed to ebay’s success as without a strong community, there will be no room for effective communication. Interested business parties would not be able conduct trades even if ebay had provided an online platform to do so.
Payment Schemes
Customers have quite a number of choices to make their payments via PayPal, Personal check or Money order/Cashiers check, depending on the sellers' preferred mode of payment.
PayPal is an e-commerce business allowing payments and money transfers to be made through the Internet. It performs payment processing for online vendors, auction sites, and other corporate users, for which it charges a fee.
Advantages of paying with PayPal:
- Payment is traceable as consumers can track their payment via their eBay or PayPal account.
- It is immediate and convenient. The customers pay directly from the item- listing page and payment is deposited directly into the seller's account.
- It does not require consumers to use their credit card online (they can transfer directly from your bank account). Sellers don't see their credit card number (it is safely encrypted through PayPal's server), which limits the risk of unauthorized use.
- It offers PayPal Buyer Protection on eligible transactions up to $200 at no additional cost.
Advantages of paying with Credit card:
- Payment is traceable.
- It is immediate and convenient.
- It provides limited liability coverage. Credit card companies typically provide some level of identity and purchase protection whether consumers are paying with their credit card through PayPal, or directly to the seller.
Advantages of paying with personal check, cashiers check or money orders:
- Payment is traceable to a particular mailing address and provides proof of payment.
- Most banks offer one-stop payment service if problems arise before the check is cashed. Some money order services may have the option to stop payment if problems arise before the payment is cashed.
Disadvantages:
- Sellers must wait for funds to clear.
- Payment is extremely difficult to recover in cases of fraud.
Design
The eBay homepage is filled with graphics that will easily catch the consumers’ attention. It is design in a way that customers search for their products according to categories thus reducing the time. eBay offers a wide range of categories from electronic products, video games, antiques etc.
eBay also helps consumers to narrow their search results. For example, under the music category it is then sub divided into assessories, cassettes, CDs, DVD audio and many more. The design of this site uses simple yet cognitive and logical way of searching for a particular item.
Strengths
The strategic advantages of an online auction business model include:
1) No time constraints - Bids can be placed at any time (24/7). Items are listed for a number of days (usually between 1 and 10, at the discretion of the seller), giving purchasers time to search, decide, and bid. This convenience increases the number of bidders.
2) No geographical constraints - Sellers and bidders can participate from anywhere that has Internet access. This makes them more accessible and reduces the cost of "attending" an auction. This increases the number of listed items (ie. number of sellers) and the number of bids for each item (ie. number of bidders). The items do not need to be shipped to a central location thus reducing costs and reducing the seller's minimum acceptable price.
3) Intensity of social interactions - The social interactions involved in the bidding process are very similar to gambling. The bidders wait in anticipation hoping they will "win" (eBay calls the successful bidder the "winner"). Much like gambling addiction, some bidders may bid primarily to "play the game" rather than to obtain products or services. This creates a highly loyal customer segment for eBay.
4) Large number of bidders - Due to the potential for a relatively low price, the broad range of products and services available, the ease of access, and the social benefits of the auction process, there are a large numbers of bidders.
5) Large number of sellers - Because of the large number of bidders, the potential for a relatively high price, reduced selling costs, and ease of access, there are a large number of sellers. Also, eBay could be a place for making money out of the things you do not need or things that you bought but never had used them. Making money on eBay is simple.
6) Network economies - The large number of bidders will encourage more sellers, which, in turn, will encourage more bidders and sellers, etc., in a virtuous circle. The more the circle operates, the larger the system becomes, and the more valuable the business model becomes for all participants.
7) Captures consumers' surplus - Auctions are a form of first-degree price discrimination. As such, they attempt to convert part of the consumers’ surplus into producers’ surplus. Online auctions are efficient enough forms of price discrimination that they are able to do this.
8) eBay also has a function that allows you to compare between the items that users have interest in, which will aid the user in deciding which one is a better buy.
9) User can navigate around ebay website easily and conveniently. The website design and layout is attractive and easily understandable, due to its clearly labeled links and icons. A standardized set of website design is used on all ebay websites around the world.
Necessary explanation pops up when the cursor moves above any icon or keywords. While looking for a particular item, user can search the item in a search box given on the top. Alternatively, an item can be searched by the category that it is in.
Necessary explanation pops up when the cursor moves above any icon or keywords. While looking for a particular item, user can search the item in a search box given on the top. Alternatively, an item can be searched by the category that it is in.
10) Consumer could at any point in time email the seller regarding the items that is being auctioned. There is an “ask seller a question” link on each auction where you can get in touch with the seller through eBay’s mail system.
11) There is also a place where feedback is left on a buyer or seller when the transaction is complete. This is like an eBay member’s report card. Users can leave a comment for each transaction that they gone through and that comment must be labeled positive, negative or neutral. This will assist either the buyer or seller to gauge whether it is a mild or great risk doing business with the other party.
12) One of the safest places to trade online.eBay commits to making consumers experience on eBay safe and fun. Millions of items are sold everyday. eBay community and Trust and Safety teams work together to provide a great way to complete consumers purchase or sale. There are many programmes in place to help make consumer trade with peace of mind.
• Feedback system
• Buyer Protection programme
• Dedicated Security Centre
13) Users have a peace of mind where payment is concerned. Using Paypal or credit cards, users will be able to conduct their transactions efficiently. All transactions are traceable and Paypal also offer buyer protection up to $200, thus boosting users’ confidence in ebay.
14) eBay's Trust and Safety team is responsible for keeping the marketplace a safe, well-lit place for people around the world to trade with one other.
Actively working to enable members to trade safely, eBay fosters trust between members through the development and enforcement of rules and policies, the creation of reputation-building programs, and the prevention of fraud.
eBay also works behind-the-scenes to prevent fraud and, in the event a problem occurs, eBay proactively works with law enforcement and government agencies throughout the world to enforce its policies. Rooted in the values of the marketplace, eBay's policies are aimed at offering a level playing field, encouraging open, honest, and accountable transactions, and creating economic opportunities for everyone.
Resource planning is visible here which is essential to a healthy growth of eBay.
Actively working to enable members to trade safely, eBay fosters trust between members through the development and enforcement of rules and policies, the creation of reputation-building programs, and the prevention of fraud.
eBay also works behind-the-scenes to prevent fraud and, in the event a problem occurs, eBay proactively works with law enforcement and government agencies throughout the world to enforce its policies. Rooted in the values of the marketplace, eBay's policies are aimed at offering a level playing field, encouraging open, honest, and accountable transactions, and creating economic opportunities for everyone.
Resource planning is visible here which is essential to a healthy growth of eBay.
15) Provides sales reports which enable you to track your key performance metrics so that the following can be done.
- Measure your existing eBay business against sales goals
- Understand the main drivers of your business
- Determine areas of opportunity and areas for improvement
- Refine your business strategy to ensure success.
This allows people to understand how their business changes and hence are able to identify new and possible opportunities to address to it.
This allows people to understand how their business changes and hence are able to identify new and possible opportunities to address to it.
Weakness
1) Feedback System
Feedback is made up of comments and ratings left by other eBay members one has bought from and sold to. These comments and ratings are valuable indicators of one’s reputation as a buyer or seller on eBay. They are included, along with an overall Feedback score, in one’s Feedback Profile. A user may be reluctant to leave honest feedback out of fear of negative retaliatory feedback. Users and generators of feedback may have different ideas about what it means. eBay does not offers exact guidelines on this Feedback System. Feedback and responses to feedback are allotted only 80 characters each. This can prevent users from being able to fully list valid complaints.
Although eBay protects sellers from getting a negative feedback from a deadbeat buyer when the deadbeat buyer/bidder did not respond to Unpaid Item dispute, they do not offer the same protection for a buyer who gets a deadbeat seller.
2) Frauds
Frauds can be committed by both the sellers and buyers.
Examples of frauds are as listed below:
Frauds that can be committed by sellers include:
- Receiving payment yet not delivering the goods
- Shipping items other than those described
- Giving a deliberately misleading description
- Knowingly and deliberately shipping faulty merchandise
- Counterfeit or bootleg merchandise
- Knowingly selling stolen goods
- Inflating total bid amounts by bidding on their own auction with “shill” account(s), either the seller
under an alternate account or another person in collusion with the seller.
under an alternate account or another person in collusion with the seller.
Frauds committed by buyers include:
- PayPal fraud: Filing false shipping damage claim with the shipping company and with PayPal.
- Credit card fraud, in the form of both stolen credit cards and fraudulent charge backs.
- Receiving merchandise and claiming otherwise
- Returning items other than received
- The buyer sends a forged payment-service e-mail, which states that the buyer has made a
payment to the seller's account. An unsuspecting seller may ship the item before realizing the e-
mail was forged.
payment to the seller's account. An unsuspecting seller may ship the item before realizing the e-
mail was forged.
3) eBay biggest boon may also be its biggest bane.
With so many vendors vying for their items to be sold, it is possible that some items might easily be overlooked. Items in some categories move very quickly, but others can be posted for weeks at a time and not receive a single bid. Like when buying and selling stocks, you should look for the most active ones.
With so many vendors vying for their items to be sold, it is possible that some items might easily be overlooked. Items in some categories move very quickly, but others can be posted for weeks at a time and not receive a single bid. Like when buying and selling stocks, you should look for the most active ones.
