Ebay : Ebay Vs. Amazon

Ebay, as a company itself, fits more in the category of an oligopoly, which is actually pretty common in any market. Other alternative websites include Yahoo!, Amazon, and Quibids, but there are only a small number of them, certainly not hundreds as in monopolistic competition. Also, eBay is interdependent on the few other auction website companies, competing with the fees they charge, as well as quality of customer support, and buyer/seller reliability. Another characteristic of eBay that coincides with it being considered an oligopoly is the fact that it has numerous entry barriers. It’s such a large company with many restrictions, and it would be hard for an up and coming substitute auction website to break into the market and compete with eBay or the other top companies in the industry. (6)

EBay has paved the wave in this industry and being in a billion dollar industry making things happen to benefit consumers in many ways.[5]

Dembosky, A. (2012). Ebay moves beyond its dotcom roots. Available:http://www.ft.com/cms/s/0/df3723ca-1773-11e2-8cbe-00144feabdc0.html#axzz2EbzDqb5Y. Last accessed 10th Dec 2012

Amazon can use 3rd degree price discrimination to divide customers into different groups and charge a different price to customers in different customers in different groups, but the same price to all consumers within the group. The firm will charge groups of customers prices relative to their demand elasticities. We can illustrate this on a graph:

Amazon make sure that customer service is the best, Customers experience low prices through Amazon, the fastest delivery, having a form of reliable contact. Amazon customer service problems have allowed retailers to sell itme on the website, to make broaden the worlds selections of products. Amazon has a rival EBAY, which also allows merchant to sell and buy through its site, but with eBay there has been complaints with poor service and fraud (Cohen, 2009).

eBay has a choice preferred standpoint. Regularly contributed similar to the world 's greatest store, and have a bigger number of things available to be purchased than anyplace else. However its maintainability props on patch up unstable ground as omnichannel world envision, for arranging purposes, that everything is available to be purchased in each commercial center, each methods, and each channel. Partaking connected shoppers may never get to that world, yet it 's a helpful arranging presumption.

Ebay is primarily service providers who connect the sellers and buyers by providing platform to sell and buy any goods.

This paper covers the accounting errors related to freight costs that led Overstock.com in 2006

Amazon.com and Overstock.com are the two companies that will be researched in detail. Their financials will be comb through and synopsis of their financial status will be developed. These two companies are within the same industry of selling discounted products online. This is a tough industry to do well in and competition is tough. The e-commerce marketplace is intensely and savagely competitive. Their financials tell the story and show how lean and mean these companies must run. This paper is going to touch on briefly on each company, what they do, where they are financially, ratios between the two and their industry, and look at their cashflow.

The basic Amazon sales channel is the web store front- end which serves as their core business. Customers go to the Amazon.com website, browse products, and place orders. Amazon is responsible for all front-end customer relationships and back-end logistics in this model. Once an order is placed, Amazon decides which internal distribution center or drop shipper should be responsible for shipping the order to the customers. After that, Amazon will responsible for coordinating the fulfillment of the order. When products are sourced from its internal distribution centers, then Amazon start to picks, packs, and ships the order. When products are sourced from a drop shipper, such like a book distributor, the distributor packages the products by using the Amazon box delivers it to the customer (Maltz et al., 2004). This model requires Amazon to maintain or purchase inventory for immediate selling. In this model, Amazon owns the customer relationship, provides the technology, owns or purchases the inventory, and executes the logistics as well.

eBay needs to focus on several issues to become more competitive. One issue is the fact that their competitors, like Amazon, make website purchases less difficult. On Amazon a customer can make a quick buy instead of having to bid on an item, wait for the auction to end, and then see if they won the auction. Another issue for eBay is the customer’s perception that scams are more likely on their site since purchases involve individuals and not companies. Even though eBay has the buyer protection plan to counter this idea, some customers might still shy away because they do not want to take a chance of having to go through the dispute resolution process in case it is a scam. When looking at Amazon’s return policy, they back their buyers 100%. If the buyer is not satisfied with the product or it doesn’t match the description that was on the website, Amazon will give the buyer a full refund. Looking at this from a buyer’s perspective, it makes purchasing more convenient to return a product as opposed to having to track down the buyer and trying to work out a resolution. I think that if eBay changes the protection policy and would

Each and every client of web administrations may be a "player" of eBay. Along these lines, there are an endless number of suppliers and everybody can offer something as a potential supplier for eBay. EBay plan of action gives an administration that brings the purchasers and vendors together. The suppliers don 't have much power aside from on account of the exchange of the top of the line things at the end of the day costly products: land or autos or types of gear. It is clear that both the purchasers and merchants need insurance for their things (Cheng, 2005, p. 159). eBay utilizes PayPal as a part of a request to accommodate smooth and brisk installment of things where the vendors need to get their cash rapidly. Be that as it may, it is entangled to offer costly where the suppliers have more power. Keeping in mind the end goal to encourage the offering costly things, eBay acquired Skype where to side can without much of a stretch import and trade information. The suppliers all in all don 't have much power unless they are managing the top of the line things.

The market eBay takes place in is primarily the Internet market. Around 1995 the Internet market was just beginning. “there will be more than 500 million users by 2003 and a rapid increase in e- commerce turnover, rising from US$500 billion worldwide in 2001 to more than US$3 trillion in 2004” (Fichter, 2003) EBay was a pioneer in Internet market until competitors such as Amazon and Wal-Mart began to sell products online as well. “Online marketing is now the fastest-growing form of marketing” (Armstrong, 2013). The difference between eBay and its

The company eBay Inc. is an American multinational Internet consumer-to-consumer corporation. Founded in 1995 by Pierre Omidyar in San Jose, California, it is now a multi-billion dollar business with operations localized in over thirty countries including China and India. It’s main enterprise is eBay.com, an online auction and shopping website that allows people and businesses to buy and sell a broad variety of goods and services internationally. Millions of collectibles, décor, appliances, computers, furnishings, equipment, domain names, vehicles, services, intangibles and other miscellaneous items are listed, bought, or sold daily on eBay. Anything can be auctioned on the site as long as it is not illegal and does not violate the eBay’s Prohibited and Restricted Items policy.

The fact that eBay does have some successful competition means that its strategic capability has become less unique. There is a hint in their competitor profile that innovation and perhaps adaptability to different cultures as they innovate is not core to eBay and something which has been developed more successfully by others working within their own national culture. Indeed, eBay rules in its own territory of North America and in Europe. The search capability of eBay also means that niche players do not really make sense, whereas the consumer trust that comes from being a big player is worth everything when trading on-line, as is the notion that whatever you want it will be on eBay because of its size. Thus, the so-called network effects of eBay (the bigger the company, the more successful it will be) and its first mover advantage that has led to this level are key to its success.