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eBay Strategic Retail Management

Jun 11, 2019 | 0 comments

Jun 11, 2019 | Essays | 0 comments

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eBay Strategic Retail Management

Introduction

eBay is an online market platform where third-party sellers transact. This company operates on the domain ‘eBay.com’ and other online commerce platforms like ‘half.com’, ’rent.com’ and ‘shopping.com’ (Cabral & Hortacsu, 2010). eBay also provides a secure, quick, and cost-effective platform of money transfer called PayPal which operates on the domain paypal.com. eBay has been trying to expand by purchasing other online platforms like GSI in 2011 and Skype in 2005. These allow for effective competition among the online retailers and also helps conduct all online transactions regardless of the size. However, eBay sold Skype to Microsoft in 2011 after it could not deliver as expected.

eBay needs to work on stabilizing the take rate considering it has been decreasing since 2008 for it to stay in business. eBay gets a commission for all the items sold on its network. This commission is referred to as the transition take rate. Higher priced rates have a lower take rate as compared to the lowly priced rates. To be in business though, eBay employs a pricing rate that will attract more clients. eBay further offers discounts for power sellers to keep them coming back; it has made notable reductions on the insertion charges for fixed-price listings to entice the sellers (Berman, & Evans, 2013). Lower insertion charges definitely attract more sellers. PayPal is eBay’s other main business considering most payments are done via PayPal. There has been a big increase in global internet users therefore eBay has been working on improving functionality, trust, and safety for this global payment platform. There are constant updates on fraud detection software to cub all the cyber bridges.

EBay’s marketplace offers a very wide product variety ranging from clothes, motor vehicles, electronics, and several other merchandisers. It further operates on more than one online commerce platform and owns the global payment platform, PayPal. The number of PayPal accounts is on the rise at a very high rate. This means the security also needs often monitoring and updating to minimize fraudsters. The huge product assortment to eBay comes with advantages and disadvantages. For instance, from the various products available for sale on eBay, some of them can be fake or counterfeit. Considering you bid to purchase a product and wait for the auction time to expire to know if the purchase went through, imagine the disappointment of realizing you wasted all your time and money on a counterfeit product. Sometimes, the dealer might fail to deliver, good news is these dealers once reported some of them are flagged or banned from transacting; too late for the victim. Coming up with a standard insertion rate for the various goods and maximizing the transition take rate can be tedious and requires more manpower. eBay bought GSI and Skype in 2011 and 2005 respectively (McKinnon, 2015). They however sold Skype to Microsoft when it could not work for them but are still keeping GSI.

There should be regulations on what type of products can be listed for sale and filter the sellers. For instance, products that should be listed for sale should not go against any laws; for example, illegal weapons and drugs should not be listed on the website. There should be programs monitoring sellers listing this kind of merchandise and flag them automatically. There are also those sellers who sell fake merchandise. There should be a channel for feedback from buyers and once these unprofessional sellers are reported, they should be flagged from listing on the website.

Conclusion

eBay is an online commerce platform that earns a commission from allowing selling a variety of products across the network. It gets its revenue from these commissions, PayPal, the insertion fees, advertisements, and other online commerce platforms it runs. eBay works on balancing the price rates and insertion rates to attract more sellers.

References

Berman, B., & Evans, J. R. (2013). Retail management: A strategic approach. NY: Pearson Prentice Hall

Cabral, L., & Hortacsu, A. (2010). The dynamics of seller reputation: research should address pediatric infections and resistant organisms in Aseptic Technique for peripheral IV insertion. There are much Evidence from eBay. The Journal of Industrial Economics, 58(1), 54-78.

McKinnon, C. C. (2015). Dual-Class Capital Structures: A Legal, Theoretical & Empirical Buy-Side Analysis. Mich. Bus. & Entrepreneurial L. Rev., 5, 81.

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