Ebay

Definition

eBay is an online auction and shopping website that facilitates consumer-to-consumer and business-to-consumer sales. The platform allows individuals and businesses to buy and sell a wide variety of goods and services, creating a marketplace that connects sellers with potential buyers globally. eBay's unique auction format and fixed-price listings enable diverse monetization strategies, appealing to various types of platform business models in the digital economy.

5 Must Know Facts For Your Next Test

1. eBay was founded in 1995 by Pierre Omidyar and was initially called 'AuctionWeb,' focusing on auction-style sales.
2. Sellers on eBay can choose between auction-style listings, where buyers bid on items, and fixed-price listings for immediate purchases.
3. The platform generates revenue primarily through listing fees, final value fees on sales, and advertising services.
4. eBay has introduced various features over the years, such as buyer protection programs and payment systems like PayPal, to enhance user trust and safety.
5. With millions of active users worldwide, eBay remains one of the largest online marketplaces, facilitating transactions across countless categories.

Review Questions

• How does eBay's auction system differ from traditional retail sales models?
  • eBay's auction system allows buyers to bid against each other for items, which can drive prices higher based on demand and competition. This differs from traditional retail sales models where prices are fixed and determined by the seller. The auction format creates a dynamic environment where the final sale price is not predetermined, allowing for potential bargains or higher returns for sellers depending on market interest.
• Discuss how eBay employs different monetization strategies to maintain its revenue streams.
  • eBay utilizes multiple monetization strategies, including charging sellers listing fees for posting items and final value fees based on the sale price. Additionally, eBay earns revenue through advertising and promotional tools that sellers can use to enhance visibility. These diverse strategies allow eBay to maximize its earnings while providing a flexible platform for both casual sellers and larger businesses.
• Evaluate the impact of eBay's business model on consumer behavior in online shopping.
  • eBay's business model has significantly influenced consumer behavior by encouraging a shift towards online buying and selling, fostering a culture of price negotiation through its auction feature. This platform empowers consumers to access a global marketplace, enabling them to find unique items that may not be available locally. Additionally, the peer-to-peer nature of eBay promotes trust among users by incorporating buyer protection policies, leading to increased engagement and loyalty in online shopping environments.

Related terms

Marketplace: An online platform that connects buyers and sellers, enabling transactions without holding inventory.

Auction: A method of buying or selling goods through bidding, where the item goes to the highest bidder at the end of the auction period.

Peer-to-Peer (P2P): A decentralized platform model where individuals can interact directly with each other to buy or sell goods or services.