Online Commerce Presentation
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  • 1. Online Commerce Does a seller’s reputation affect a buyers' willingness to pay for products online?
  • 2. The Study
    • This study looks at “buyers' willingness to pay for a heterogeneous product (U.S. silver Morgan dollar coins in "Almost Uncirculated" condition), using data collected from” (Melnik and Alm 2005).
    • They look at how a seller’s reputation impacts “buyers' willingness to pay for these coins by including the Web site's own measures of the seller's reputation” (2005).
    • They also look at what other variables effect the sale of a coin. For example- “the presence or absence of visual scans of the coin” and “certification of the coin's quality by a credible third party” (Melnik and Alm 2005).
  • 3. Conclusions
    • “ Buyers value information in online auctions” (Melnik and Alm 2005).
    • “ A seller's overall reputation often has a positive and statistically significant impact on willingness to pay” (Melnik and Alm 2005).
    • “ A measure of complaints about the seller ( Negative ) also has an important--and negative--impact on willingness to pay” (Melnik and Alm 2005).
    • “ The reputational effects of Rating tend to be of greater importance for more heterogeneous goods (e.g., noncertified coins and coins without a visual scan), where it is more difficult for buyers to verify independently the quality of the good, while Negative comments largely affect a buyer's willingness to pay for more homogeneous and more expensive goods (e.g., certified coins)” (Melnik and Alm 2005).
  • 4. Conclusions Continued….
    • “ Seller acceptance of credit card payment has a positive and statistically significant impact on price for noncertified coins, but not for certified coins” (Melnik and Alm 2005).
    • “ No uniform measures of reputation exist in online commerce today, and proprietary measures of reputation such as the eBay rating mechanism are not transferable to other Web sites” (Melnik and Alm 2005).
  • 5. Video
  • 6. Thoughts and Questions
    • Do you purchase things online?
    • If so, how often? If not, why not?
    • Does a “rating” system effect whether or not you buy things from certain sellers?
    • Do you even look at consumer rating systems?
    • Do you rate the sellers you buy from? Why or why not?
  • 7. Source
    • Melnik, M., Alm J. (2005). Seller reputation, information signals, and prices for heterogeneous coins on eBay.  Southern Economic Journal ,  72 (2), 305.  Retrieved February 23, 2008, from ABI/INFORM Global database.