eBay Business Case PresentationJoshua RudmanMarketing 476
eBay History/Overview• eBay was founded by Pierre Omidyar inSeptember 1995 as part of a personal onlineauction website in which people can buy andsell a huge variety of goods and services.• In 1996 Omidyar hired Jeffery Skoll as the firstpresident of the company. A couple monthslater EBay entered into its first party licensingdeal.• eBay was originally a side hobby for Omidyaruntil his internet service provider informedhim he would need to upgrade to businessaccount due to the high traffic of customers onthe website.
EBAY’s Overview• eBay is now a multinational Internet consumer-to-consumer corporation that allows a hugevariety of online shopping and market place forthe sale of goods and services.• eBay has expanded now to be a multi billondollar company and is localized in over 30countries.• Two years after being founded it auctioned over2,000,000 products compared to the previousyear of 250,000 products.• It is now amongst on the largest E-commercecompany in the world.
EBays Decentralized Structure• eBay is a decentralized business model that provides a online auctionwebsite and act as a middle man giving people the opportunity to buy orsell any product.• eBay provides a common place that creates s online E-commerce marketwhere people can redistribute products directly to the consumer from acentral location which is their website.• A example of this is how eBay has created a website that distributesdifferent varieties of products in a common market place. They control thepower within the website but decentralized their power giving anyone theopportunity to create and maintain whatever they are offering to sell.• eBay is a decentralized business where it controls all the functions andoversight from top management but gives local managers and distributorsthe freedom and authority to make decisions for whatever they areselling.
EBays Decentralized Benefits• eBay does not purchase any inventory for their overhead.• Gives anyone the opportunity to sell old goods to someone in demand ofthat specific product. Its like a giant garage sale.• The benefit of eBay having a decentralized business model gives users theability to adapt and offer any new forms of products that are high indemand.• eBay gives people the incentive to update personal product pages makingtheir site more appealing to consumers.• Lets users submit feedback about the seller and how his product works.Informs users for future purchase.
Key Competitors• Amazon- Provides a product comparison betweendistributers giving consumers option and the bestprice possible• Yahoo- Search Engine that provides people witheveryday news. This site gives a stock breakdown, sports analysis, Email, Jobs, and any otherinterest that appeals to the consumer• Google- This is the biggest search engine availableover the web. It fulfills anything a consumer isinterested in. It can search any product and find thecheapest available price on any company site• Overstock.com- This site distributes products thathavent sold off the shelf discounting it to a efficientprice.
Key Partners• Pay Pal- Pay Pal has established a onlinesecurity payment to ensure the safety of theconsumers credit card information• Rent.com- This site is a linked to eBayfulfilling anyone in need of renting anapartment.• Stubhub- 3rd party online ticket servicewhere people can buy sold out tickets at thecheapest price with security of any sort offraud.
User base and Customers• The average user on eBay is between the age of 35-55 years of age.• User base is over 200,000,000 users• Over 1,000,000 people sell products on eBay today• eBay has expand internationally to over 30 countries.• eBay users range from businesses try to sell products at the most efficient price tocollege students who are in need of particular product.• It was establish as a marketplace for anyone.• The Usual eBay customer is someone who is trying to find a product at a relatively lowprice.• Users in the middle class are most likely to buy from this website.
Stakeholders• As off December 2012 eBay employees approximately 31,500people• Bench Mark Capital invested $6.7 million dollars to start thecompany.• Any one that is a stockholder owns a stake in the company.• Here is a list of the companys top stockholders:
Decentralized Structure in the Eco-System• eBay decentralizes its structure by creating a common online marketplacegiving users the ability to maintain and decide what products they want to sellor buy.• eBay gives users the ability to upload any product they want to sell.• Gives users to resell old products they don’t want anymore.• Gives users a competitive advantage on retailing any hot product online.• eBay has a upper chain of command to make insure people are receiving theproducts they bought.• Pay-pal offers users the most profound credit card security• Users can leave feed back on people they purchased products from explainingif they provided what they promoted in the most efficient manner.• Planning and execution becomes faster and more efficient since there isdelegation of authority and responsibility.• It will increase morality because eBay employees will feel more valuedcreating initiative and sense of ownership.
Interesting Assets• eBays content for selling products has a variety of purchasingoptions through E-commerce providing customers with the up mostsecurity.• One of eBays biggest assets was purchasing pay-pal in 1998providing a guarantee that they will receive every product theypurchase or they will get their money back.• eBay provides a exclusive chat room between sellers andconsumers if they have any particular questions.
Funding• eBays first funding payment was received in 1997 of $6,700,000 fromventure capitalist firm Bench Mark Capital.• In September 1998 eBay went public starting to sell shares at the NewYork Stock Exchange.• Started selling $18 per a share• Relies on crowd source funding for individuals to network to support otherpeople or organizations.• Peer Production relies on self-organized communities to come together toproduce a shared outcome.
Distribution• eBay engages in user-to-user distribution which allows them to have noinventory.• eBay acts as a middle man linking buyers and sellers• E-Commerce is then transfers the payment completing the transaction.• The business is self-sufficient running on its own through third parties• Provides customers with any customized and personal products foranything they want.• eBay ensure delivery every time
Revenue Mode• eBay revenues a majority of its money on purchasingand selling fees using profit sharing• Research has shown that the fee on purchasing aproduct has changed multiple times but the currentrate is 9%.• eBay also charges a 3% fee for individuals who areselling product and sometimes charge an additionalfee to the seller when the product is sold.• The last fee they use is an option fee to add morepictures and marketing exposure.
Intellectual Property• eBay has a trademarks which gives themownership of their name and logo.• No one can use their name and logo withouttheir permission which usually leans towards alicensing deal.• eBay created VeRO to protect individualproperty rights and makes its easy to reportanything infringing their rights.