From Consumers To CommunityReason for growth of eBay?

What is eBay?

Whatever it is, you can get it

Sellers register their products online and interested buyers bid for the product

Buy it now options can help you buy/sell products without the meticulous process of English auction

eBay charges sellers on the products sold, for buyers no charge by eBay.

How it works ?

Growth of eBay

Reaching out to ConsumerseBay does not own product that is sold on the website. Thus it becomes necessary for the company to attract both the buyers and sellers

The company uses both online and offline mediums to attract customersThe much repeated story that Omidyar created eBay to sell his fiances candy dispenser was planted by company itself to generate attention about it in the media

Buyers OnlineThe people who are already using internet are more likely to use this medium to shop online

Company makes sure that it is visible to this populace on the web, through social media, YouTube and different other sites which have substantial internet traffic

STAND OUTFEEL PERSONAL LOOK PROFESSIONAL

Newbies Are ImportantOffline presence of the company is required to garland more customers who are not using Internet. TV commercials, magazine articles, newspaper ads and billboards signs are used effectively In emerging markets, this is an important proportion as number of internet users are increasing . If company holds a image among them then its market share is bound to increase

Attracting SellersBesides attracting buyers, eBay has to attract sellers to list their products on website.

Sellers are convinced for a fair price by buyers, better reach to millions of people and reasonable charge for these services

The Bid Groups allows merchants to set custom bids for their products by category, brand, and price range.

eBay Product Ads is a cost-per-click, cross-device advertising solution, allowing advertisers to promote products to shoppers on eBay and across its network of over 2,000 publishersBid Groups

Fee Structure of eBayFor a buyer, it is free to use the site and peruse through the eBay listings

If applicable, seller is charged one insertion fee per listing, percategory, regardless of the quantity of items. He will receive one insertion fee credit for each auction-style listing

If the item sells, seller is charged a final value fee. Final value fees are calculated based on the total amount of the sale and are charged per item.

eBay.com charges$0.10 to $2, based on the opening or reserve price, as an insertion fee for a basic auction-style listing

Fixed-price listings have an insertion fee of $0.30, and the final value fee varies based on category and total amount of the sale (e.g., 13% for DVDs & Movies up to $50)

The Final Value Fee amounts to 10% of the total amount of the sale, which is the price of the item plus shipping charges.

Continued

Auctioning StyleBidding on eBay auction-style listing is calledproxy biddingand is essentially equivalent to aVickrey auction

The winning bidder pays the second-highest bid plus one bid increment amount (that is, some small predefined amount relative to the bid size), instead of simply the highest bid

The highest bidder's bid is sealed, as in a Vickrey auction, but the current winning bid (second highest plus one increment) is displayed throughout the auction to allowprice discovery.

eBays Customer Relationship Get closer than ever to your customers. So close that you tell them what they need before they realize it themselves. - Steve Jobs

Building CommunityeBays business model is based on connecting individuals. It was the first example of online social networking

eBays millions of passionate users also have a voice in all major decisions the company makes through its Voice of the Customer program

eBay's continues to expand its capabilities to build its community and connect people around the world by adding services, partnerships, and investments.

Listening to CustomersEvery few months, eBay brings in as many as a dozen sellers and buyers and asks them questions about how they work and what else eBay needs to do

At least twice a week the company holds hour-long teleconferences to poll users on almost every new feature or policy

Users feel like owners, and they have taken the initiative to expand the company into ever-new territory

Rating SystemIn 2008, eBay began using detailed seller ratings. When leaving feedback, buyers are asked to rate the seller in each of 4 categories with a score of one to five stars.

Unlike the overall feedback rating, these ratings are anonymous; neither sellers nor other users learn how individual buyers rated the sellers

The listings of sellers with a rating of 4.3 or below in any into the four rating categories appear lower in search results. Power Sellers are required to have scores in each category above 4.5

The Future for eBayThe company also need to improve its fee structure so as to make it more convenient for sellers. Differentiated pricing could be used for Insertion fee for different types of products and price range

The company will have to work on its technological advancements, and strategies to penetrate the emerging markets, like China and India where number of Internet users are increasing exponentially.

SummaryThe success story tells that Marketing is not just about selling the product but reinventing the product so as it sells itself

Ear On Grounds , company needs to listen to the public so as to make a product most preferred by the public

A loyal market share is required to grow substantially, and price war cannot make a loyal customer base

Created by Prasoon Bajpai, IIT Kanpur as a internship assignment under Prof. Sameer Mathur, IIM Lucknow