Question

1. How does eBay’s original business model contrast with its current business model?
2. What are the problems that eBay is currently facing and how is eBay trying to solve these problems?
3. Are the solutions eBay is seeking to implement good solutions? Why or why not? Are there any other solutions that eBay should consider?
4. Who are eBay’s top competitors online, and how will eBay’s strategy help eBay compete?

Answer 1

Q1. Auctioning were the first business model of Bay. However, as time went by, people began to buy goods more at a fixed price than to race for an auction. This changed the auction model of eBay to the basic model of e- commerce. But until this day, eBay 's kept little of its auction. Now ebay is selling out of season, refurbished and overstocked goods along with auctioning for some some of the products. Main feature of the current model are:

Advertising Revenue Model
Transaction Revenue Model:
Lower listing fee-Higher sales commission
No listing fee for smaller sellers
Q2.Bay was faced with the following problems

On major problem that eBay faced was the introduction to the VoIP service which provides free or low cost calls over the internet. eBay’s sellers were not interested in adding voice calls to their business models.
Another issue that eBay faced was related to varied taxation and foreign laws in different nation. For example, the auction site called Tabaco in China.
Another issue was of free and fair conduct of auctions, Creation of a auction divison meant that an extra cost was to be bear by eBay which would swipe out the profit.
eBay took various measures to solve these issues. They created a comment and customer query section on the society. Also eBay made sure to establish a fraud proof system to manage its payments. Also they started their operations in smaller cities as well while starting same day delivery in bigger cities.

Q3. EBay is focusing on its search engine optimisationa and better use of artificial intelligence to achieve better market analytics. Offering services to more cities and better delivery services is also attracting its customers.

Q4. Amazon is definitely the biggest competitor for eBay. EBay’s multiplatform visibility is helping them a lot. EBay is accessible from many different devices like android phone and iPhones, especially the mobile app of ebay will help it to expand its sales.