Issues In A Network Economy

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Issues In A Network Economy

  1. 1. Taking on eBay Issues in a Network Economy Chris Goodwin Sam Graber Matt Grace Michael Nelson
  2. 2. Overview <ul><li>Introduction </li></ul><ul><li>eBay </li></ul><ul><li>Online Auction Portal Concept </li></ul><ul><li>Establish Positive Feedback </li></ul><ul><li>Build Trust </li></ul><ul><li>Revenue Model </li></ul><ul><li>Discussion </li></ul>
  3. 3. Introduction <ul><li>Can ANYONE compete with eBay? </li></ul><ul><li>No! </li></ul><ul><ul><li>Why not? </li></ul></ul><ul><li>Yes! </li></ul><ul><ul><li>How do you build a large enough online community in the relatively short amount of time before eBay tries to sink you? </li></ul></ul><ul><ul><li>Prey upon eBay’s weaknesses! </li></ul></ul><ul><li>Introduction </li></ul><ul><li>eBay </li></ul><ul><li>Concept </li></ul><ul><li>Positive Feedback </li></ul><ul><li>Build Trust </li></ul><ul><li>Revenue Model </li></ul><ul><li>Discussion </li></ul>
  4. 4. <ul><li>Largest, most recognized online auction facility in the world </li></ul><ul><li>Monopolistic characteristics </li></ul><ul><ul><li>Enormous brand equity </li></ul></ul><ul><ul><li>No substantial competition </li></ul></ul><ul><ul><li>Essentially unregulated market </li></ul></ul><ul><ul><li>Significant economies of scale </li></ul></ul><ul><li>Introduction </li></ul><ul><li>eBay </li></ul><ul><li>Concept </li></ul><ul><li>Positive Feedback </li></ul><ul><li>Build Trust </li></ul><ul><li>Revenue Model </li></ul><ul><li>Discussion </li></ul>
  5. 5. (and others) <ul><li>Chinks in the armor </li></ul><ul><ul><li>Reluctance to partner with other auction sites </li></ul></ul><ul><ul><li>Cumbersome search engines </li></ul></ul><ul><ul><li>Lack of standardized categories </li></ul></ul><ul><ul><ul><li>Un-user friendly </li></ul></ul></ul><ul><ul><ul><li>Not intuitive </li></ul></ul></ul><ul><ul><li>Multiple registration processes across different auction sites </li></ul></ul><ul><li>Introduction </li></ul><ul><li>eBay </li></ul><ul><li>Concept </li></ul><ul><li>Positive Feedback </li></ul><ul><li>Build Trust </li></ul><ul><li>Revenue Model </li></ul><ul><li>Discussion </li></ul>
  6. 6. Online Auction Portal - Concept <ul><li>Build upon eBay’s existing formula for success (extensive online community) </li></ul><ul><li>Consolidate so-called “second tier” auction houses under one common “portal” </li></ul><ul><li>Pool individual strengths & resources </li></ul><ul><ul><li>Together we stand, divided we fall </li></ul></ul><ul><li>Introduction </li></ul><ul><li>eBay </li></ul><ul><li>Concept </li></ul><ul><li>Positive Feedback </li></ul><ul><li>Build Trust </li></ul><ul><li>Revenue Model </li></ul><ul><li>Discussion </li></ul>
  7. 7. Online Auction Portal - Concept <ul><li>Each auction house remains own, independent entity </li></ul><ul><li>Become partners, or members, of our online portal service </li></ul><ul><li>Include traditional online brick and mortar retailers </li></ul><ul><ul><li>Symbiotic relationship </li></ul></ul><ul><ul><ul><li>Struggling retailers get online presence and move hard to sell inventory </li></ul></ul></ul><ul><ul><ul><li>Users gain additional much desired purchasing options </li></ul></ul></ul><ul><li>Introduction </li></ul><ul><li>eBay </li></ul><ul><li>Concept </li></ul><ul><li>Positive Feedback </li></ul><ul><li>Build Trust </li></ul><ul><li>Revenue Model </li></ul><ul><li>Discussion </li></ul>
  8. 8. Online Auction Portal - Concept <ul><li>Further differentiate by adding ‘Proxy’ service </li></ul><ul><ul><li>Search engine scours every online auction site and retailer looking for specified merchandise </li></ul></ul><ul><ul><li>Places bid on product </li></ul></ul><ul><ul><li>Purchases within specified time period </li></ul></ul><ul><ul><li>Add small service charge for service </li></ul></ul><ul><li>Introduction </li></ul><ul><li>eBay </li></ul><ul><li>Concept </li></ul><ul><li>Positive Feedback </li></ul><ul><li>Build Trust </li></ul><ul><li>Revenue Model </li></ul><ul><li>Discussion </li></ul>
  9. 9. Establish Positive Feedback <ul><li>In order to compete with eBay, it is essential to develop positive feedback </li></ul><ul><li>Establish positive feedback by: </li></ul><ul><ul><li>Improving buying & selling experience </li></ul></ul><ul><ul><li>Examples: </li></ul></ul><ul><ul><ul><li>Standardize search for products – include detailed search form </li></ul></ul></ul><ul><ul><ul><li>One-time registration process across all member auction sites </li></ul></ul></ul><ul><li>Introduction </li></ul><ul><li>eBay </li></ul><ul><li>Concept </li></ul><ul><li>Positive Feedback </li></ul><ul><li>Build Trust </li></ul><ul><li>Revenue Model </li></ul><ul><li>Discussion </li></ul>
  10. 10. Build Trust <ul><li>It is imperative for portal service to build trust among buyers & sellers </li></ul><ul><ul><li>Allow sellers to carryover existing reputation ratings from other auction sites (including eBay) </li></ul></ul><ul><ul><li>Brick and mortar retailers would automatically get highest ratings </li></ul></ul><ul><ul><li>Partner with reputable e-commerce purchasing service (ie. Paypal) </li></ul></ul><ul><li>Introduction </li></ul><ul><li>eBay </li></ul><ul><li>Concept </li></ul><ul><li>Positive Feedback </li></ul><ul><li>Build Trust </li></ul><ul><li>Revenue Model </li></ul><ul><li>Discussion </li></ul>
  11. 11. Revenue Model <ul><li>As most dot.coms have realized, it IS important to produce revenues! </li></ul><ul><ul><li>Charge sliding scale commissions </li></ul></ul><ul><ul><ul><li>1%-3% for any items sold through our service </li></ul></ul></ul><ul><ul><li>Proxy service: 5% added surcharge to purchases made through proxy service </li></ul></ul><ul><ul><li>Banner Advertisements (Playboy.com charges 10K for advertising space) </li></ul></ul><ul><ul><li>Substantial portion of initial VC money used on media advertising </li></ul></ul><ul><ul><ul><li>Must generate site awareness in order to compete </li></ul></ul></ul><ul><li>Introduction </li></ul><ul><li>eBay </li></ul><ul><li>Concept </li></ul><ul><li>Positive Feedback </li></ul><ul><li>Build Trust </li></ul><ul><li>Revenue Model </li></ul><ul><li>Discussion </li></ul>
  12. 12. Discussion <ul><li>Why wouldn’t this work? </li></ul><ul><ul><li>Win/Win for everyone (except eBay) </li></ul></ul><ul><li>Is media blitz enough to generate site awareness? (ie. WingspanBank.com) </li></ul><ul><li>Can consolidated online auction services actually compete with eBay? </li></ul><ul><li>Introduction </li></ul><ul><li>eBay </li></ul><ul><li>Concept </li></ul><ul><li>Positive Feedback </li></ul><ul><li>Build Trust </li></ul><ul><li>Revenue Model </li></ul><ul><li>Discussion </li></ul>

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