The world today is being revolutionized by the emergence of new trends and the evolution of technology. Gone are days when one had to physically visit a retail store to obtain the merchandise they require; however one can nowadays order goods from the comfort of their house or office. The new type of business is known as e-commerce or e-business, whereby it is a method of conducting business using the web, internet, intranet, and extranet. The business involves buying, and selling goods and services by commercial transactions electronically and providing technical support with the help of the internet. One of the largest global e-business companies is eBay, which supplies merchandise to its clients worldwide.
eBay is a global online trading and Auction Company established in 1995 by the American entrepreneur Pierre Omidyar. The company is among the first enterprises to develop and market the Internet Web site that matches buyers and sellers of goods and services on one platform. eBay caters to small businesses and individual sellers, and it is successful in the global e-business. The companies headquarter is in San Jose, California, US. Ideally, eBay’s customers may participate in the website set up in their country or use its overseas site.
The company has set websites for Canadian and the United States markets, and most European nations, and numerous Asian countries. The company portfolio brands include eBay classifieds and eBay Marketplace, which operates in 190 markets globally (eBay Inc.). eBay Latin American websites are used in collaboration with Mercado Libre, an e-commerce provider firm that provides the same functions. Somehow, auctions comprise the bulk of eBay sales, but fixed-price sales are also a substantial share of transactions. The company’s progress is in the implementation of processes that promote transparent, safe trading, with accessibility almost anywhere for all people.
eBay depends on its users to self-regulate when trading as a community through a feedback system that enables buyers to rate the sellers on transactions. Earlier on, sellers were allowed to leave negative comments concerning the buyers, but the application was removed. In the cause of doing business, some vendors would receive bad ratings, which was not always due to their fault (eBay Inc.). In some instances, challenges occurred as a result of package deliveries. On the other hand, few vendors could garner good ratings for a short period only to scam clients. The company responded by availing educational resources for a better understanding of how the online business is conducted.
In Europe, the company has come under intense legal pressure where various manufacturers accused eBay of being complicit in the deliveries of counterfeit items. The complaint was that the company was only concerned with the commission charged without imposing sufficient controls on transactions. Nevertheless, in 2008, the company announced a critical change in its marketplace business in three core areas: seller incentives and standards, fee structure, and feedback (eBay Inc.). Not all changes were accepted wholeheartedly by the sellers; however, they aimed to improve the quality experience. The detailed seller ratings (DSRs) allow sellers to be reviewed in critical areas: item as described, communication, delivery time, and postage and packaging costs.
The move was aimed to increase the conversion rate by advancing positive shopping experiences, whereby accurate descriptions with the best photos and evading excessive shipping charges. eBay develops an inspiring e-business experience for sellers, buyers, and developers, by embracing innovation. Technology has been the cornerstone of the company’s growth and client loyalty for over two decades. eBay encompasses technologies such as computer vision, Artificial intelligence (AI), machine translation, and natural language processing. Sellers are also facilitated to use rule-based technologies to automate and promote new listings for competitiveness.
Fraudulent dealings are a considerable risk factor for eBay, whereby one in 10,000 transactions in the United Kingdom was deemed fraudulent (eBay Inc.). The 0.0001 percent dealings seem to be a small percentage but have enormous effects on e-business customers. Nonetheless, to counter the problem, the firm has generated trust and safety programs specifically critical to reassure eBay’s customers. The company’s feedback forum assists in establishing sellers’ and buyers’ credentials.
E-Business Environment and Model
In terms of B2C (business to consumer) and C2C (consumer to consumer), eBay presents an illustrious and top-notch e-business model. The company invented one of the most proficient business models that combine auction, classified service, and online ticketing provider. The spread of the internet has helped in the development of electronic infrastructure that revolutionizes e-business and changes the competition shape (Singh 1). The amount of trade being conducted electronically has expanded dramatically since the adoption of the e-business trend. The website and internet technologies differ from the global electronic marketplaces and traditional markets whereby digitalization of all sectors is rising.
The e-business environment has numerous components, and eBay operate in the following setting:
- E-procurement: Also known as supplier exchange whereby B2B, business to government, B2C, and sales of services are conducted with the internet’s assistance. eBay has adopted e-procurement to decrease costs and efforts by electronically outsourcing products.
- Online stores: An electronic application or website sourcing for products and services that include online shopping stores. These stores are referred to as internet shops, e-shops, web-store, virtual stores, online storefronts, or m-commerce. They are and meant to save clients’ money and time as they can purchase products by making online payments using cash on delivery, credit cards, and online wallets. Owners of online stores such as eBay Inc. host their e-business website on PCI-compliant hosting.
- Online Marketplace: It is electronic trading that links buyers and suppliers to the products over the internet. Operators of these online marketplaces only offer an inventory of other firms and deliver a transaction facility.
- Online Communities: they are also known as internet communities or web communities, including a group of individuals having similar purposes or interests, and they use the internet for communication. Moreover, online communities transact e-business between organizations and individuals.
- Online companies: this entails electronic business collaboration that connects different firms and forms a virtual business that provides numerous products and services to customers.
PESTLE Analysis of eBay
Economic factors: there is an unending supply of different and unique products as eBay sellers are found across the world. Their offerings span worldwide, and even some items not found in local shops are available on the company’s online platform at a reduced price. Customers enjoy vast selections of merchandise while sellers are provided with an enormous marketplace.
Social factors: the company is a stepping stone into entrepreneurship since it enables people who want to sell products to connect to the market. Despite the sellers being individuals, it is treated as a small business. The difference in the eBay platform is that a client can bid for a commodity they desire, unlike other e-businesses that offers a fixed price.
Technological factors: the company survives due to the availability of technology; therefore, there is a need for servers, storage for digital information, and online payment systems. (Frue n.p)The services can only be used with an internet connection, meaning if there is an outage or services to go down, the business loses revenue.
Legal factors: cybercriminals affect eBay’s business since any illegal transaction results in heavy penalties for the company. It is easy for individuals to hide their identity when conducting an online business and finding them is difficult. In some instances, scammers pretend to be representatives of eBay to obtain customers’ information and data fraudulently.
Environmental factors: online shopping is mainly described as ”green shopping” since it is better for the environment. The emission of carbon is decreased as products arrive at the customer’s doorsteps instead of driving all over the town looking for them (eBay Inc.). People are offered an opportunity to buy previously owned things that could have ended in the trash bins. Moreover, eBay’s platforms allow communities to supply and purchase green products across global audiences.
E-Business Infrastructure and SCM
In the earlier years of eBay, there were a series of services disruption occurring, which caused massive challenges for the company’s business. In one instant overloaded server sporadically shut down for three days, upsetting users from checking auctions, completing transactions, and placing bids (eBay Inc.). The incident prompts the company to overhaul its technological architecture completely since, at that time, eBay had only one massive database server with few separate systems operating the search functions. The firm’s architecture is a kind of grid computing that permits error collection and growth. Except for searching functions, all other operations can run on nearly 50 servers (eBay Inc.).
While most sites can run over 50 servers, eBay has four times more, and 200 servers are contained in sets of 50 in four units across the United States. Besides, eBay has local partners spread out in different countries, and they deliver the company’s static data to minimize download time. Some monitoring systems in several cities globally continuously scan challenges in the network. Years later, as part of the ambitious effort to modernize and re-platform the enterprise-backed infrastructure, EBay’s servers are now available to the public through open source. (Rawashdeh n.p). The creation of servers specialized for complex demands of the company’s marketplace came after intense research and testing in various partnerships and applications with significant hardware vendors.
Severs caters to the company’s particular needs, and they allow improved customer experience, reduce dependence on third parties and create better efficiencies. With over 175 million active users and more than a 1.1billion listings on eBay, the infrastructure required to manage its worldwide marketplace is huge (Rawashdeh n.p). The re-platforming of the backend infrastructure entails designing eBay’s AI engine and hardware, moving to edge computing, decentralizing the cluster, and leveraging the newest open-source technologies (Rawashdeh n.p).
In the physical foundation, eBay uses the Point of Presence (Pop) plan, decentralizing the cluster of data centers found in the U.S. The edge computing methodology allows for creating a more consistent user experience by saving 600-800 milliseconds of significant load time. Using open source technologies, there was the generation of NuData, a geo-distributed object, a fault-tolerant, and a data store.
Inventory management is the most significant part of the web-based retail business since it is the backbone of supply chain management (SCM). Precise updating of the inventory on various marketplaces can make the company successful or fail. With the assistance of E-Seller Hub, the eBay SCM system allows automatic adjusting and updating of the stock level efficiently and accurately. The company ensures clear information on stock levels, product tracking capabilities, and shipping information (eBay Inc.). eBay SCM is economical and an easy solution for maintaining accuracy and uniformity in product details and various sales channels.
Abiding by eBay inventory management and SCM best practices is crucial for the progression of the business. It helps the company to be more effective and to reward all stakeholders in the eBay SCM system. There are five critical steps involved in the eBay inventory management that fulfill a seamless SCM:
- Sourcing and procurement: the first stage in the company’s SCM process entails sourcing and stock procurement by ensuring a high quality of products. After the sources have been identified, it becomes critical to coordinate with them and establish whether they can satisfy customers’ needs. The procurement aspect ensures definite receiving of the goods from the supplier and sending their payment, which is the actual execution of the contract.
- Storage and organization: the optimum eBay SCM is directed to security, safety, and accessibility. Storing and organizing the inventory is the most possible and practical way without difficulties in investing in equipment. Proper storage, whether it entails boxes or shelving of smaller merchandise, is an important step. Nevertheless, without sufficient storage, organizing inventory is virtually difficult. The core part of eBay SCM is adopting numerous forms of technology and utilizing barcodes and other technological solutions, which assist sellers in filling orders quickly, and dramatically advance efficiency.
- Receiving orders: The way the company deals with orders is exclusively crucial since a negative experience may miss customers’ returns. Delivery issues and payment errors are the two basic faults that make customers not return; it even discourages potential clients based on negative reviews. eBay ensures the inventory management procedure is efficiently handled.
- Fulfillment: Getting customers’ orders on time is crucial, and having an efficient and easily accessible inventory is paramount. Understanding where exactly items are, the number of units available in the stock allows the eBay SCM to flow smoothly, and things are sent to customers on time.
- After-sale service: automating the process by sending a follow-up coupon or email enables customers to be assisted after goods have been delivered to them. There are multiple ways that eBay uses to wow its customers and entice potential customers.
E-Marketing and CRM
eBay provides businesses of every size and individual an opportunity to link with an international audience. By the beginning of this year, eBay has reached over 182 million buyers on its platform globally (eBay Inc.). One key benefit of selling on eBay is the vast digital storefront available and exposure to different people. To obtain maximum potential customer attention, eBay uses numerous optimization techniques and marketing tactics that greatly impact its brand visibility and listings. The buyer’s purchasing decisions are highly motivated by the seller’s feedback. The firm manages its distribution via a multi-pronged strategy that comprises numerous technologies enabling merchants and consumers to access services easily. These goals are achieved through official websites, mobile apps, and application programming interfaces (API).
eBay’s marketing mix or the 4P shows how this kind of e-business trade can enhance its online services revenue. The firm’s marketing mix (4Ps) describes the tactics and strategies used to execute a marketing plan that involves product, place, promotion, and price, which makes the 4Ps variables (Mitchell n.p). eBay focuses on marketing mix services for buyers and sellers whereby the company’s products comprise marketplace services for online vendors and customers. The firm’s pricing plans are designed to be competitive against other e-business giants such as Wal-Mart marketplace, Amazon, and other smaller competitors. Marketplace services are fundamental to eBay’s worldwide e-business, and the benefits are presented on the main website ebay.com, while localized websites offer products to their regions.
The company’s marketing promotion targets markets by corresponding tactics and strategies that define communication between target customers, vendors, and businesses. eBay applies some components in its promotional mixes, such as sales promotion, advertising, and public relations (Mitchell). Ostensibly sales promotions are among the critical strategies in EBay’s promotional mix. It is designed to increase sales in the short term by including discount coupons for buyers and special offers for sellers on the platform. In the aspect of pricing strategies. The company determines price ranges and points for its services. eBay understands lower prices attract more sellers and, subsequently, more shoppers to their online platform. The suitability of price strategy impacts the management objectives and the e-business performance.
Customer relationship management (CRM) is core to any enterprise and business as customers support forms a massive part of any e-business and online trading experience. The company has an exceptionally loyal customer base that is ranked number two among online retailers (Mitchell n.p). Good CRM software helps keep a healthy relationship with both sellers and buyers, and it enables tracking of customers’ data and management of their services. Satisfied buyers mean a higher sales and eBay positive feedback score, particularly with the help of CRM. The most significant step in CRM is the delivery of excellent customer service.
eBay uses the following strategies to accomplish its customer relationship management, retain its customers, and appeal to potential customers.
- Customers DNA: much of EBay’s success is attributed to the company’s innovative customer DNA system. The firm records 50 terabytes of data concerning their customers daily, thereby understanding and using the helpful information from their customers. The outcomes have detailed profiles of the customers on the items they put on their cart and what they decide to watch.
- EBay’s Email Campaigns: The company uses emails to target their clients and update them with recent offers. The approach is vital since it keeps their customers well informed of merchandise on sale and the prices.
- Making customers more valuable: to turn more buyers into sellers, eBay provides powerful incentives to sell, including a coupon for only $50 for first-time sellers.
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