Week 8 Questions

Q1: eBay is one of the only major Internet "pure plays" to consistently make a profit from its inception. What is eBay's business model? Why has it been so successful? eBay’s business model is the broker model. “eBay acts as a broker, bringing buyers and sellers together and taking a listing fee on products listed over its site and a commission on things sold” (Rappa, 2005).

eBay has been successful because “eBay was one of the first auction Web sites and because it pursued an aggressive promotion strategy. It becomes the first-choice site for many people who want to participate in auctions. Both buyers and sellers benefit from a large marketplace such as the one eBay created” (Schneider, 2007, p. 264).

Q2: Other major web sites, like Amazon.com and Yahoo!, have entered the auction marketplace with far less success than eBay. How has eBay been able to maintain its dominant position?
eBay keeps improving themselves to become better all the time, which enable it to maintain its dominant position. In addition, eBay does not have any stock at all. Nevertheless, Amozon.com has large amount of stock. In this aspect, eBay perform better than Amozon.com.

Q3: What method does eBay use to reduce the potential for fraud among traders on its site? What kinds of fraud, if any, are eBay users most susceptible? eBay use feedback made by buyers and sellers on the website to decrease the potential for fraud among traders on its website. Buyer and sellers understand that they’re playing a role in a larger community and that they have a set of shared values and that there’s acceptable behaviour and unacceptable behaviour, that there’s rewards to being a member, a fair playing member of the community”. “They really must instill in its ever-growing membership their sense of participating in a larger community and the importance of adopting or internalizing the values of that community” (Rappa, 2005). Moreover, PayPal is another method that eBay uses to reduce the potential fraud. PayPal is the safer, easier way to pay and get paid online. Buyers who buy items on eBay must pay though PayPal.

There are several kinds of fraud those eBay users most susceptible, they are:
1.When a buyer buy something online, he or she receives the item which is quite different what described on the Internet
2.When a buyer has already paid money of the item to the seller, however he or she doesn’t receive the item.
3.When a person won the bid, but he or she doesn’t pay the money to the seller.

Q4: eBay makes every effort to conceptualize its users as a community (as opposed to, say "customers" or "clients"). What is the purpose of this conceptual twist and does eBay gain something by doing it?
The main purpose of the conceptual twist of conceptualising its users as a community is that the members are more likely to feel like they are inside and they are part of something. People will feel more comfortable in this atmosphere. Of course, eBay gains a lot of by doing this. Members will more like to participate in it.

Q5: eBay has long been a marketplace for used goods and collectibles. Today, it is increasingly a place where major businesses come to auction their wares. Why would a brand name vendor set-up shop on eBay?In the words of Rappa, (2005) that vendor set-up shop on eBay are “means of expanding their business to reach new customers and to explore different ways of pricing their product”. In addition, many customers prefer online store to physical stores. So a lot of physical store holders tend to open online shop as well in order to attracting more customers. As a result, this will help them gain more profit.