EBay

Definition

eBay is an online marketplace that facilitates consumer-to-consumer and business-to-consumer sales through auctions and fixed-price listings. It revolutionized e-commerce by enabling individuals to buy and sell items directly to one another, fostering a vibrant community of sellers and buyers that transcends geographical boundaries.

5 Must Know Facts For Your Next Test

1. eBay was founded in 1995 by Pierre Omidyar as 'AuctionWeb,' originally designed as a platform for buying and selling collectibles.
2. The platform introduced a feedback system that allows users to leave ratings and reviews, significantly enhancing trust among participants.
3. eBay has expanded its model beyond auctions to include fixed-price listings, making it easier for buyers to purchase items immediately.
4. The global reach of eBay enables sellers from different countries to connect with buyers worldwide, contributing to a diverse marketplace.
5. eBay has faced competition from other online retailers and marketplaces, leading to continuous innovations in user experience and seller tools.

Review Questions

• How does eBay's consumer-to-consumer model differentiate it from traditional retail businesses?
  • eBay's consumer-to-consumer model allows everyday individuals to buy and sell items directly without the need for a traditional retailer. This peer-to-peer approach fosters a unique marketplace where sellers can list used or new items, often at lower prices than traditional retail. It also creates an interactive community where buyers can communicate with sellers, ask questions, and leave feedback, which is not typically available in conventional retail settings.
• What role does the user feedback system play in building trust among eBay users?
  • The user feedback system on eBay is crucial for establishing credibility among users. Buyers can read reviews and ratings left by previous customers before making a purchase, which helps them gauge the reliability of a seller. Conversely, sellers benefit from positive ratings that enhance their reputation, potentially leading to increased sales. This system effectively promotes transparency and trust within the marketplace, making users feel more secure in their transactions.
• Evaluate the impact of eBay's evolution from auction-based sales to a broader fixed-price model on its market position.
  • The shift from primarily auction-based sales to incorporating fixed-price listings significantly transformed eBay's market position. This evolution made it more accessible to casual buyers who prefer immediate purchases over bidding processes. By adapting to consumer preferences for convenience and speed, eBay expanded its user base and remained competitive against other online retailers. This strategic pivot allowed eBay to capture more market share in the growing e-commerce landscape while maintaining its unique identity as an auction platform.

Related terms

Marketplace: A platform where multiple sellers can offer products or services to consumers, allowing for competition and variety in product offerings.

Auction: A sales method in which items are sold to the highest bidder within a specified time frame, commonly used by eBay to facilitate transactions.

User Feedback System: A mechanism that allows buyers and sellers on platforms like eBay to rate and review each other, helping to build trust within the marketplace.