EBay

Definition

eBay is an e-commerce platform that allows individuals and businesses to buy and sell a diverse range of products and services online. It operates as an auction-style marketplace, connecting buyers and sellers worldwide through its user-friendly digital platform.

5 Must Know Facts For Your Next Test

1. eBay was founded in 1995 and has grown to become one of the largest and most well-known online marketplaces in the world.
2. The platform allows both individual sellers and businesses to list and sell a wide variety of new, used, and unique items, ranging from collectibles to electronics and fashion.
3. eBay's auction-style selling model encourages competitive bidding, allowing buyers to potentially obtain items at lower prices than fixed-price retail.
4. The platform's buyer-seller feedback system helps to build trust and accountability, as users can view ratings and reviews of past transactions.
5. eBay generates revenue primarily through listing fees, final value fees, and other seller-related fees, as well as advertising and promotional services.

Review Questions

• Explain how eBay's auction-style selling model differs from traditional retail approaches.
  • eBay's auction-style selling model differs from traditional retail in several key ways. Instead of fixed prices set by the seller, eBay's auction format allows buyers to competitively bid on items, with the highest bidder winning the transaction. This can result in items being sold at prices lower than the typical retail price, as buyers compete to obtain the desired product. The auction-style approach also creates a dynamic pricing mechanism that can fluctuate based on supply, demand, and the level of competition among buyers.
• Describe the role of eBay's buyer-seller feedback system in facilitating trust and accountability within the marketplace.
  • eBay's buyer-seller feedback system is a crucial component in building trust and accountability within the online marketplace. This system allows buyers and sellers to rate and provide feedback on their transaction experiences, which is then displayed on user profiles. Potential buyers can review a seller's feedback history to gauge their reliability, customer service, and the quality of their products or services. Similarly, sellers can assess the trustworthiness of buyers based on their feedback. This feedback system helps to create a self-regulating environment, where users are incentivized to maintain positive reputations and engage in fair and transparent transactions.
• Analyze how eBay's business model and revenue streams differ from traditional brick-and-mortar retail operations.
  • eBay's business model and revenue streams differ significantly from traditional brick-and-mortar retail operations. As an online marketplace, eBay does not maintain a physical store presence or inventory, but rather facilitates transactions between buyers and sellers. eBay generates revenue primarily through listing fees, final value fees, and other seller-related fees, rather than through the direct sale of products. Additionally, eBay's revenue model is scalable, as it can accommodate a large and diverse range of sellers without the same overhead costs associated with operating physical retail locations. This allows eBay to achieve higher profit margins compared to traditional retailers, while also providing a more accessible platform for individuals and small businesses to engage in e-commerce.

Related terms

Online Marketplace: An e-commerce platform that facilitates transactions between multiple buyers and sellers, often through auction-style or fixed-price listings.

Auction-Style Selling: A selling method where buyers bid competitively for products, with the highest bidder winning the item.

Buyer-Seller Feedback System: A system that allows buyers and sellers to rate and provide feedback on their transaction experiences, promoting trust and accountability within the marketplace.