eBay’s Business and Revenue Model
Online marketplace for B2C and C2C global corporate e-commerce eBay, headquartered in California, officially opened in 1995 and launched in 1998. eBay is a well-known eCommerce online marketplace, including over $9.6 billion in annual sales and 170 million unique visitors as of the fourth quarter of 2017.
eBay promotes their products either through a live auction in which subscribers can post the highest fee they are prepared to pay for the good or service or through a buy it now, an option in which users purchase products at the quoted price.
As of the fourth quarter of 2017, 39 percent of customers and 44 percent of merchants were female. Over 65 percent of eBay’s revenue is generated from eBay online marketplace operations, with StubHub, an online booking marketplace procured by eBay in 2007, accounting for only 10 percent of revenue.
eBay is an online marketplace where you can trade new and used items. The online marketplace operates in both the B2C and C2C markets. eBay is accessible in 180 nations for the purchase and sale of a wide range of goods. eBay earns money from sellers who list their products on the site and from commissions on product sales.
To make purchases on an online marketplace, buyers must only pay the price of the product. Every month, retailers can list the first 50 items on the eBay online marketplace for free. Following that, the firm charges a listing fee based on the item category.
The organization also charges a service charge on product sales. eBay’s marketplace produces more than 90% of the total gross sale volume.
Model for generating revenue on eBay:
The first online marketplace eBay is well-known for its wide range of merchandise. Online sites identical to eBay are doing quite well, but eBay’s revenue model is significantly different from those of its rivals. eBay provides an online marketplace forum for buyers and sellers to buy and sell products.
eBay does not keep an inventory of products and instead sends orders directly to the seller. With over 1.93 million influential retailers (as of 2017), eBay allows retailers to list the first 50 items on the online marketplace forum for free. Following that, eBay levies a listing fee for each item. Furthermore, eBay charges up to a 10% commission on the sale price before taxes and shipping charges. online marketplace eBay provides two options for sellers to sell and buyers to buy a wide range of products. Users now have the option to buy it now or bid. The bidding option allows the buyer to bid the price they are willing to pay to purchase the product. The buyer with the highest bid price receives the product, and the seller updates the product’s worth in the Buy it Now option.
Advertisement is another revenue generation model used by websites such as eBay. Online marketplace websites, such as eBay, sell advertising on their websites that appear on other websites. eBay also owns some classified ads, which contribute to the online marketplace platform’s revenue.
Another source of income is licensing their in-house technologies to other companies. Online marketplaces such as eBay generate revenue from various sources, but online marketplaces generate the majority of revenue.
eBay’s online marketplace features:
• Product return policy with a money-back guarantee of 100 percent.
• eBay accepts all online payment methods, including EMI, allowing buyers to pay in monthly installments.
• eBay authentication policy for all products, as well as expert product verification.
• The ability to purchase products through a bidding process. At least a 30% price difference between the lowest bid and the Buy it now price.
• Product wish list, as well as product feedback and reviews via catalog on the website.
• Send a link to buyers if a product is fake or unauthentic.
Online marketplace eBay’s Value Proposition:
Customer
• An extensive product catalogs
• Products of high quality
• Shipping is free.
• Prompt Delivery
•Product evaluation and feedback
• Order monitoring
• Product return policy with a money-back guarantee of 100 percent
Seller
• A worldwide online audience
• Exceptional customer service
• Bidding and buy it now features for product sales
• A successful marketing and distribution channel
• Possibility of increasing sales
Why is eBay so successful?
eBay has a plethora of competitors. Despite being the first player to enter the online marketplace domain worldwide, eBay is against stiff competition. eBay is the only place that offers auctions of products that attract a large audience from worldwide. No other online marketplace can provide both buyers and sellers with an auction feature. Buyers are drawn to rare collectibles and an extensive toy collection, as well as auction listings.
eBay’s online marketplace is successful because of its distinct interface. Unlike search engines, which search for information, eBay searches for physical products all over the world. online marketplace eBay maintains its audience market share and protects eBay from a large set of Online marketplaces competitors. The number of products and services offered, the price and the quality are the most important aspects that distinguish eBay and make it successful in the online marketplace world.
eBay is an online marketplace where you can buy and sell products from all over the world. eBay is not like the other players. eBay’s core offering is improved services for both buyers and sellers. Other online marketplace competitors are more concerned with products. eBay’s auction feature, combined with the ability to buy a product at a fixed price, is a one-of-a-kind offering that engages both buyers and sellers.
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