Evaluate eBay’s fee structure. Is it optimal or could it be improved? Why? How? -by Sravya Tanmayee

1. Ebay's Fee Structure !
Is it optimal?

2. Ebay is a smart kid !

3. eBay doesn’t
sell or buy
Anything by itself!

4. It earns money by collecting fees :
• an insertion fee for each listing.
• a final value fee based on the auction or fixed price.
• A smart game is all what it plays by acting as a
mediator.

5. SECOND DEGREE PRICE DISCRIMINATION
•Ebay charges less to buyers who buy in a larger volume.
•This pricing strategy is a good way to attract larger volume buyers.

6. but by..
SCARING AWAY THE
REGULAR CUSTOMERS !
• This pricing strategy is a good way to attract larger
volume buyers, but ebay should not forget the small
consumers who will also buy more and more online.
•It is not a good idea to charge the small consumers
with high fee’s because this can scare them off to
other online marketplaces.

7. • Buyers love free shipping!
• They provide a platform where they incented sellers to offer free or
low- cost shipping.
• But eBay collects delivery charges for heavier products, which many
other websites in today’s market are not.
• Sellers who don't have a store, are being moved to free insertion
fees at any start price up to 50 listings per month.

8. They have a beautiful yet
confusing cost notations .
•They have a separate version for the Indian
market , which create a confusion with the
cost notations and leads in a competition
among themselves.
•They have too many number of categories ,
sub categories and preferences which
confuse a new user.

9. BUT AT THE END OF THE DAY,
EBAY’S FEE STRUCTURE IS OFCOURSE OPTIMAL !
It has always been the website with vast spread and coolest
collection with reasonable demands.
That is what is making it survive from the past two decades.

10. Let’s listen to what they have to say
“Every change we make, we do in the spirit of
improving the buying and selling experience.”
“trust, value, and selection ”
is all what we want.

11. A quick de-tour
1.Ebay has always been a smart website which dosen’t sell and buy.
2. It earns its money by collecting fees :
a) An insertion fee for each listing.
b) A final value fee based on the auction or fixed price.
3. Ebay charges less to buyers who buy in a larger volume.
4. This pricing strategy is a good way to attract larger volume buyers, but ebay
should not forget the small consumers who will also buy more online.
5.It is not a good idea to charge the small consumers with high fee’s because
this can scare them off to other online marketplaces.
6. They provide a platform where they incented sellers to offer free or low- cost
shipping.
7. They have a separate version for the Indian market , which creates confusion
with the cost notations and leads in a competition among themselves.
Credits: Images.google.com

12. A Presentation by Sravya Tanmayee

13. SRAVYA TANMAYEE, IIITDM-kancheepuram
during an intern by
Prof. Sameer Mathur ,IIM Lucknow

14. Happy shopping!
Thank you!