Week 8: Auctions

Q1: eBay is one of the only major Internet "pure plays" to consistently make a profit from its inception. What is eBay's business model? Why has it been so successful?
Ebay is a website which allows people to buy and sell objects over the internet. EBay business model is the broker model. The broker model is when people buy and sell over the internet making a transaction. EBay has been rather successful because most people have a rather good experience. EBay is a website which tries to ensure that people are being genuine. If and account seems to be fraudulent then eBay would delete their account. EBay has safety measures to ensure that people are not being ripped off.

Q2: Other major web sites, like Amazon.com and Yahoo!, have entered the auction marketplace with far less success than eBay. How has eBay been able to maintain its dominant position?
EBay has been able to maintain its dominant position because of how eBay has been operated. Amazon allows consumers go onto the website and buy items which Amazon has in stock. Amazon is more of a company where as eBay allows anyone to put items up for auction. After an item has been sold on eBay, the website receives a commission from the sale. EBay allows consumers to bid for items and who ever offers the most for the item wins the bid. EBay taps into people competitive nature which for some consumers makes it more worthwhile to bid and try to win.

Q3: What method does eBay use to reduce the potential for fraud among traders on its site? What kinds of fraud, if any, are eBay users most susceptible?
EBay has such methods of having information on their website to ensure that people know about security on their website. Such information on their website is in the security centre. The security centre tells consumers and sellers about what to do to reduce risk such as using Paypal. This is a function which eBay trusts and has a protection element for buyers and consumers (eBay, 2009). Such programs as Paypal are put in place to protect buyers and sellers if they use this program on eBay. If the buyer/seller uses another paying method then the Paypal protection does not apply to them (eBay, 2009). EBay also relies on feedback to know about who is being fraudulent. This allows EBay to know about people trying to scam the system.
The types of fraud eBay users are susceptible to are:
· Identity thief
· Sellers fraud
· Buyers fraud
· Fraudulent emails

Q4: eBay makes every effort to conceptualize its users as a community (as opposed to, say "customers" or "clients"). What is the purpose of this conceptual twist and does eBay gain something by doing it?
EBay does this because eBay wants people to come back onto the website. EBay interacts as a community to give people a good experience since people can buy and sell not having to rely on a shop. EBay allows people to search for items which might be unusual or items which you cannot purchase in stores. This means people rely on trying to sell products. Such items as concert tickets people try and sell for the best price because the tickets may be hard to get. People sell items on eBay such as tickets to try and receive a profit. EBay gains because more people will come back to eBay since items are different and ordinary everyday people sell the products.

Q5: eBay has long been a marketplace for used goods and collectibles. Today, it is increasingly a place where major businesses come to auction their wares. Why would a brand name vendor set-up shop on eBay?
In my opinion brand name vendors would set up shop on eBay because more people are buying items online. With the internet being more convenient more people are shopping online. With eBay increasing in popularity it would be logical to think that more businesses would sell on eBay to increase in popularity and increase recognition. EBay would allow consumers to buy brand items at a bidding price which might not be extremely high.


eBay.(2009). Security centre. Retrieved May 22, 2009 from: http://pages.ebay.com.au/securitycentre/index.html