Old Metamora, Reaction Paper Example

Search for information about Amazon marketplace and eBay stores on the web and in your library that will help you make a recommendation to Betty regarding which alternative would provide the best avenue for her online business expansion.  Support your recommendation with relevant facts, including specific costs of operating each type of store and specific benefits that Betty could gain by using one or the other. 

com was founded by Princeton University educated Jeff Bezos in 1994. As a Senior Vice President for New York Investment Bank D.E Shaw, Jeff Bezos was responsible for examining the investment opportunities of the internet. Struck by the fact that the internet usage was growing by more than 2000% per year, Jeff Bezos quit D.E Shaw and moved to Seattle to open a virtual bookstore. He developed the software for the website out of his garage and launched it online in 1995 as Amazon.com, named after the world’s largest river (Britannica, 2010, Pg. 1). Amazon.com started out as an online book seller only but later added DVDs, CDs, software, and apparel etc. among many other things to become the world’s largest online retailer.

EBay Inc. was founded as AuctionWeb by French-born Iranian computer programmer Pierre Omidyar. The company’s earliest auction sales were collectibles but the company expanded quickly once it allowed every saleable item to be listed. Both Amazon and eBay pioneered two distinctive online shopping experiences and despite evolving over the years, they both have been able to preserve much of their basic foundation (Amazon hosts mostly retailers and sell fixed price items while majority of eBay sellers are private sellers and auctions still dominate the eBay shopping domain).

Amazon mainly operates as a virtual retailer with fixed price format. Amazon has two selling plans. The first is “Professional” plan which is aimed at merchants selling at least 40 items per month and the second is “Individual” which is suited to private sellers selling less than 40 items per month. The “Professional” plan requires a monthly subscription fee of $39.99. The company has two main fees structures that are “Variable Closing Fee” (either $0.80 or $1.35, depending on the item) and “Referral Fee Percentage” which is a commission based on the selling price of the item. To “Individual” members, the plan also charges a fixed amount of $0.99 per item. Non media products are not charged “Variable Closing Fee” which would be the case for Betty Shriver.

Ebay started out as auction-format shopping website but now also offers fixed price format in addition to auction-format. EBay is different from Amazon in that it also charges insertion fee (depending upon the starting price) for listing the item. If the item is sold, then the seller is also liable for final value fee which depends upon the selling price of the item. Final value fee ranges from 8% to 15%. EBay does run promotions from time to time in which it offers listings with no insertion fees. The rules for eBay apply equally to small scale and large scale sellers even though the company does provide tools to sellers to construct a virtual eBay store.

Based on the fees charged by Amazon and eBay, it is difficult to make a concrete recommendation and the difference in costs is going to be insignificant when compared to other strategic facts. The relatives strengths and weaknesses of Amazon and eBay can be established to help us create a strategy. First of all, Betty Shriver sells collectible glass figures which she buys from real estates and regional auctions as well as new Crystal Figurines from such established and high-end brands as Baccarat, Lalique, Orrefors, and Swarovski. Anyone intending to buy a collectible glass figure naturally thinks of eBay as the top online destination as eBay is commonly used to sell collectible and used items. Betty may sell few collectible glass figurines on Amazon but most of her targeted audiences flocks to eBay for such purchases, thus, giving her a lot larger customer base on eBay than Amazon. Amazon is a better option for new Crystal Figurines since eBay carries a higher potential of fakes and thus, is a less desirable place for high end products. Betty could reverse this disadvantage on eBay by establishing herself over time through high feedback ratings from buyers which would raise her profile and give more confidence to her eBay customers in buying expensive Crystal Figurines from her.

Since eBay mainly thrives on individual sellers selling few items rather than merchants managing a retail store, it is quite normal for listings to be lost in hundreds and even thousands of other listings. Amazon does a better job of exposing your items to the intended audience due to its more efficient search features and site organization. Amazon works especially well for high end items, being the world’s largest online retailer. Thus, Betty could pursue a hybrid strategy, utilizing Amazon for new Crystal Figurines and eBay for collectible glass figurines. Since Betty’s plans include developing a website so over the period, she could eventually move her whole business to her website once she has established a large customer base on eBay and Amazon. Then her business may also thrive on her customers’ word-of-mouth marketing as is evident by the example of many successful eBay sellers who now operate independent websites.

Outline a strategy that Betty could implement using social networking sites that would direct traffic to her Web site, to her auction on eBay, and to her products on sale on Amazon.com. For each element in the strategy, provide an explanation of how it would help achieve Betty’s goals.

Social Media has become a great tool to promote your business. Sites like Facebook and Twitter not only give you discussion opportunities, customers and fans feedbacks, instant communication tools, but also greatly expand your potential audience.

Betty may create a Facebook fan page for her store where she puts pictures of her inventory as well as other informative material. Facebook page will provide her with continuous feedback since she will be able to read what her customers are talking about and what figurines are arousing interest at any particular time. She may also create albums where her customers would put pictures of desirable collectible glass figurines so she would know what to look for at real estates and regional auctions. Through Twitter, she could instantly update her followers on upcoming auctions and newest additions to her inventory.

She could also complement her social media marketing with few other marketing tools. For example, she may send a weekly newsletter (Idea-Hub Articles, 2010) to interested fans of her store’s Facebook page which will detail her thoughts on collectible figures as a hobby as well as updated news on the world of collectible figurines. She may also write opinion articles on internet where she can freely dispense her knowledge and expertise in the area of collectibles and new figurines. Such expert articles will increase her reputation and online presence and may also help direct traffic to her store’s website. Facebook feeds system will also come in handy in directing other non-targeted audience to her website who would never have found about her store otherwise. This is because Facebook feeds system informs you about your Facebook friends’ activities on the website whether they add pictures, join a fan page, leave a wall-note, or join a discussion among many other things. Both Facebook and Twitter allow listing website address of your business. In addition, she could also list her store on review and opinion websites and provide links to her eBay and Amazon feedback pages. Many experienced shoppers read reviews and opinions before making purchase decisions to avoid disappointing shopping experiences.

Betty is an experienced collectible and new figurines seller and enjoys good reputation among her customers. What she lacks is an online presence where she could build effectively with the help of online social media and by providing more avenues to her customers to interact with her, she will build lasting goodwill with them. Many figurines collectors are loyal and repeat customers and it would also be convenient for her customers to refer their acquaintances and friends to Betty’s store if she has an online presence.

References

Britannica. (1 October, 2010). Bezos, Jeff. Britannica Biographies , p. 1.

Idea-Hub Articles. (23 November, 2010). 5 Ways to Sell Your Expertise Online. Retrieved November 24, 2010, from Open Forum: http://www.openforum.com/idea-hub/topics/technology/article/5-ways-to-sell-your-expertise-online-josh-catone