eBay Inc., Essay Example

eBay Inc. is the company that was founded in 1995, and from then has become an iconic example of success in international online business (Cohen, 2003). The company currently manages eBay.com, an online auction and shopping website. The company has over 15,000 employees and generates annual revenues of up to US$9 billion (Collier, 2006). Since its inception, eBay has also developed or acquired a number of subsidiary online businesses including the online payment system, Paypal.com (Collier, 2006).

The E-business model mainly used by eBay is the consumer-to-consumer business model. eBay maintains a site that allows users to buy or sell items to one another. When sellers post items that they wish to sell, they need to pay a fee to eBay so that eBay would let the item be listed for buyers to view (Collier, 2006). Buyers then bid on the item and this process is managed by the eBay system. In addition to this, eBay keeps a record of feedback of buyers to sellers and vice versa (Cohen, 2003). This is a key element of the eBay service, as it enables buyers to determine who among the sellers are trustworthy enough to buy from based on past experience (Cohen, 2003).

It can be seen from the success of eBay how E-business is able to successfully bring together very large markets to engage in commerce. Based on the theory, since the advent of the internet makes it possible for communication to occur swiftly across vast distances, it is possible to passively market products to customers simply by listing items and waiting for customers to search for such items. eBay is able to conveniently give a potential buyer a list of sellers who may have what he or she is looking for, thereby regularly generating millions if not billions of potential transactions.

One relevant market influences for this company is the security in making online transactions. If people do not feel safe about transacting with a person who is a perfect stranger, they would not buy from sellers on eBay. Another market influence is exchange rates, since people from different countries would have to send and receive money from their home country’s currency, differences in exchange rates may make some deals favorable for some people and not for others.

References

Cohen, A. (2003). The Perfect Store: Inside eBay. Back Bay Books.

Collier, M. (2006). eBay For Dummies. For Dummies.