Business Case Presentation

eBay Business Case Presentation

Joshua RudmanMarketing 476

eBay History/Overview• eBay was founded by Pierre Omidyar in

September 1995 as part of a personal online auction website in which people can buy and sell a huge variety of goods and services.

• In 1996 Omidyar hired Jeffery Skoll as the first president of the company. A couple months later EBay entered into its first party licensing deal.

• eBay was originally a side hobby for Omidyar until his internet service provider informed him he would need to upgrade to business account due to the high traffic of customers on the website.

EBAY’s Overview• eBay is now a multinational Internet consumer-

to-consumer corporation that allows a huge variety of online shopping and market place for the sale of goods and services.

• eBay has expanded now to be a multi billon dollar company and is localized in over 30 countries.

• Two years after being founded it auctioned over 2,000,000 products compared to the previous year of 250,000 products.

• It is now amongst on the largest E-commerce company in the world.

EBay's Decentralized Structure• eBay is a decentralized business model that provides a online auction

website and act as a middle man giving people the opportunity to buy or sell any product.

• eBay provides a common place that creates s online E-commerce market where people can redistribute products directly to the consumer from a central location which is their website.

• A example of this is how eBay has created a website that distributes different varieties of products in a common market place. They control the power within the website but decentralized their power giving anyone the opportunity to create and maintain whatever they are offering to sell.

• eBay is a decentralized business where it controls all the functions and oversight from top management but gives local managers and distributors the freedom and authority to make decisions for whatever they are selling.

EBay's Decentralized Benefits• eBay does not purchase any inventory for their overhead.• Gives anyone the opportunity to sell old goods to someone in demand of

that specific product. Its like a giant garage sale.• The benefit of eBay having a decentralized business model gives users the

ability to adapt and offer any new forms of products that are high in demand.

• eBay gives people the incentive to update personal product pages making their site more appealing to consumers.

• Lets users submit feedback about the seller and how his product works. Informs users for future purchase.

Key Competitors • Amazon- Provides a product comparison between

distributers giving consumers option and the best price possible

• Yahoo- Search Engine that provides people with everyday news. This site gives a stock break down, sports analysis, Email, Jobs, and any other interest that appeals to the consumer

• Google- This is the biggest search engine available over the web. It fulfills anything a consumer is interested in. It can search any product and find the cheapest available price on any company site

• Overstock.com- This site distributes products that haven't sold off the shelf discounting it to a efficient price.

Key Partners

• Pay Pal- Pay Pal has established a online security payment to ensure the safety of the consumers credit card information• Rent.com- This site is a linked to eBay

fulfilling anyone in need of renting an apartment. • Stubhub- 3rd party online ticket service

where people can buy sold out tickets at the cheapest price with security of any sort of fraud.

User base and Customers• The average user on eBay is between the age of 35-55 years of age. • User base is over 200,000,000 users• Over 1,000,000 people sell products on eBay today • eBay has expand internationally to over 30 countries.• eBay users range from businesses try to sell products at the most efficient price to

college students who are in need of particular product. • It was establish as a marketplace for anyone.• The Usual eBay customer is someone who is trying to find a product at a relatively low

price. • Users in the middle class are most likely to buy from this website.

Stakeholders• As off December 2012 eBay employees approximately 31,500

people• Bench Mark Capital invested $6.7 million dollars to start the

company.• Any one that is a stockholder owns a stake in the company.• Here is a list of the company's top stockholders:

Decentralized Structure in the Eco-System

• eBay decentralizes its structure by creating a common online marketplace giving users the ability to maintain and decide what products they want to sell or buy.

• eBay gives users the ability to upload any product they want to sell.• Gives users to resell old products they don’t want anymore.• Gives users a competitive advantage on retailing any hot product online. • eBay has a upper chain of command to make insure people are receiving the

products they bought.• Pay-pal offers users the most profound credit card security• Users can leave feed back on people they purchased products from explaining if

they provided what they promoted in the most efficient manner.• Planning and execution becomes faster and more efficient since there is

delegation of authority and responsibility. • It will increase morality because eBay employees will feel more valued creating

initiative and sense of ownership.

Interesting Assets• eBay's content for selling products has a variety of purchasing

options through E-commerce providing customers with the up most security.

• One of eBay's biggest assets was purchasing pay-pal in 1998 providing a guarantee that they will receive every product they purchase or they will get their money back.

• eBay provides a exclusive chat room between sellers and consumers if they have any particular questions.

Funding• eBay's first funding payment was received in 1997 of $6,700,000 from

venture capitalist firm Bench Mark Capital.• In September 1998 eBay went public starting to sell shares at the New

York Stock Exchange. • Started selling $18 per a share• Relies on crowd source funding for individuals to network to support other

people or organizations. • Peer Production relies on self-organized communities to come together to

produce a shared outcome.

Distribution • eBay engages in user-to-user distribution which allows them to have no

inventory.• eBay acts as a middle man linking buyers and sellers • E-Commerce is then transfers the payment completing the transaction.• The business is self-sufficient running on its own through third parties• Provides customers with any customized and personal products for

anything they want.• eBay ensure delivery every time

Revenue Mode

• eBay revenues a majority of its money on purchasing and selling fees using profit sharing

• Research has shown that the fee on purchasing a product has changed multiple times but the current rate is 9%.

• eBay also charges a 3% fee for individuals who are selling product and sometimes charge an additional fee to the seller when the product is sold.

• The last fee they use is an option fee to add more pictures and marketing exposure.

Intellectual Property

• eBay has a trademarks which gives them ownership of their name and logo.

• No one can use their name and logo without their permission which usually leans towards a licensing deal.

• eBay created VeRO to protect individual property rights and makes its easy to report anything infringing their rights.

Sources

• http://angueschan.blogspot.com/2009/11/ebay-organization-structure-anlaysis.html

• http://finance.yahoo.com/q/mh?s=ebay+Major+Holders

• http://investor.ebayinc.com/faq.cfm• http://pages.ebay.com/sellerinformation/ebay

forbusiness/essentials.html