EBay, Net-a-porter, and Topshop - Essay Example

EBay, Net-a-porter, and Topshop 1. EBay Summary EBay, a virtual online auction website, launched its service in September 1995. It orients transparent and just communication among the members. The eBay community accomplishes personal transaction based on the individuals. EBay, the world’s online market place, is a place for buyers and sellers to come together and trade almost anything. Service EBay has over a million registered users using the services 7 days a week, 24 hours a day with the online auction product information on more than 1.7 million units. Items such as antiques, books, DVDs and music CDs, coins, stamps, collections, computer, doll, jewelries, gems, photos, electric goods, ceramic wares and glasses, sports goods and toys, are available for sale and purchase. Since inception it has accomplished 21 million cases of auctions till date. During the year 1997 sales was 5,700,000 dollars, but in 1998, the net sales was 14,900,000 dollars. Since eBay does not produce and sell products, the net profit reached 13,200,000 dollars. Transaction process and character The transaction at eBay is all through auction, and the auction period can be set for 3, 5 or 7 days at the discretion of the seller. Once the successful bidder is decided based on the highest bid through the auction, e-mail is sent automatically to both the parties. The contract has to be concluded within three days, and in the event that the contract is not concluded within the stipulated time, the seller has the option to start a fresh contract with the purchaser that has suggested the second highest bid. The purchaser has the right and option to inquire on the quality, delivery method and period, payment and condition of the auction products before placing the bid. This results from the philosophy of eBay that they do not guarantee quality of the products auctioned at eBay. They leave this to the two parties concerned. EBay only performs the role that connects the seller and purchaser, and is not concerned about the items enlisted in auction. They get their fees according to the rules set, such as register fee of the auction advertisements and the final value fee after sales from the seller, in case the transaction is made as per agreement Since eBay does not wholesale or retail the products directly, the transportation, package, and management related to the inventory do not arise. Rational membership fee and payment method There is no cost in participating in the auction to purchase the product as the membership is free. There may be no visitors if cost is levied to participate in the auction. EBay auctions are open even to the nonmembers, and in case they want to participate in auction, all that is required is to register as a member. Anyone who has an email ID can have access to eBay or have a virtual account. He can become a member through the confirmation procedure of eBay. Should anyone be interested in sales and purchase, the amount can be settled on the eBay account by using the registered payment methods. The concept of virtual accounts is useful as the means to control the negative behavior of the seller by eBay. It also helps to reduce inconvenience as they must pay the fee whenever they register the auction to the seller. EBay uses personal check, money order and credit card as the mode of payments while cash or transfer is not accepted. Payments can also be done while mailing with check/mail order after getting eBay payment coupon online by using the ID that the principal got at the time of membership. Besides, payments can also be made automatically by registering the credit card information to their ID registry information. Payment modes are restricted because payments through cash or transfer need additional confirmation procedure such as confirmation of bank balance and the confirmation of the members. In case of non-member, he/she cannot participate in auction, but they can read the notice information about all auction goods, so the number of visitors seems far more than the actual membership. Administration Website management During 1998 almost half million items were registered at eBay website, on an average per month. There were about 0.56 billion pages a month where the visitors could see the information related to the registered products. This figure reached 0.6 billion pages a month till March, 1999. The management of website is the most important aspect in eBay as they have no inventories or common purchase. With the increase in membership, the number of pages also goes up which increases the load on the network. EBay continuously invested in the network related equipments after sales started in an effort to solve the reduced speed due to the network load as the user number increased. It continued to study to provide search engine facility and the parameters that would help search various auction information more quickly and more conveniently. The users can connect to the site by changing software or hardware, but it continued using the existing method for many years to make the user interface more convenient. This demonstrates that eBay is not a service provided by any service provider but by a community. Currently eBay employs about 130 people and they have six servers and 15 management computers through which they provide the facility to the users. Effort for community realization EBay has an image as a community and is conducting the online auctions for the members limited to the souvenirs or character commodities. The settlement of sales online or offline is performed through credit card, mail order or personal checks. As ecommerce grows through the internet, the expansion of eBay community is promising. The number of Web pages that the members or non-members see has increased, which demonstrates that the number of potential customers is far greater. Critical success factors -Small profit, big volume A study of the features of many successful ecommerce websites recently such as eBay, suggests that the security of members is more important than any other factor in e-commerce. Moreover, the value of the dealing product may be very small or big, but it may be the decisive factor that may affect the choice of cost burden (cannot understand what you really want to say here). In this aspect, we observe that the fee system of eBay is attractive to many people who want sales. In case one sells goods worth $10,000 through the auction, the seller may pay $140 to eBay, and an item of $100 just requires $3.2 of payments. This cost is extremely low considering that publicity reaches not just the entire membership base of eBay but to anyone else willing to purchase a good. The success of eBay can be seen to start from the operation method such as small fees, big volume. Online Chatting Forum -Feedback system EBay has several feedback methods as alternatives to solve the issues such as transaction conflict, unjust behavior and fraud transactions occurring as part of e-commerce based on WWW. - Confirmation of mutual information before transaction Security is essential as the purchaser may not trust the seller, and in case they request, eBay submits the membership details through email. Since this is a function that can be believe and trusted, similar information of the seller can be requested too. - Seller class evaluation system after transaction After the transaction takes place and after the purchasers have acquired the products from the auctioneers, eBay has a system to compare and evaluate the status of the things. The information before and after the transaction is evaluated, which gives the sellers a rating. This class evaluation method after the transaction of eBay is the way to protect the sellers who do honest transactions and maintain credit. If they lose credit several times, the user can be deprived of member qualification. Hence this is a successful feedback technique that maintains the community. - Management system whether the auction results is performed Thirdly, there is a system to secure success of auction, and in case the auction participators did not keep their promise, there exists a method to punish the members who do not keep the credit in each phase such as warning to the purchaser, suspension of regular account, deprivation of member qualification. Besides, eBay is letting the members have trust among the members. It has opened the free discussion system such as feedback forum to reinforce the participation, and through bulletin board, they are encouraging forming club as well as sharing the feedback information about the products or the seller. Event For the purpose of devising familiarity among the members and the virtual community, eBay is holding regular or irregular trade show. The trade show is held covering many regions about the specific interests such as post stamps, coin expo, and is inducing many members’ participation by introducing the schedule of trade show through the bulletin board such as ‘Where Well be this month’ on the website. These efforts of eBay reinforce the virtual space on the internet more by the concept of virtual community, and it demonstrates that the construction of virtual community becomes the core success factor in e-commerce. Read More