E-Bay Case Study

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SUPPLY CHAIN: Case Study No. 2

The business model that eBay utilises is based on a person to person model. This model is also used in other forms such as garage sales and flea markets. This business model for eBay has been very successful due to the fact that there is no middleman. The lack of there being a middle man cuts costs for customers as they are dealing with the sellers themselves, which allows customers to bid at prices they are happy with or find an item that satisfies the price bracket they are looking for or willing to spend.

A dominant position is held by eBay due to the trust that is built on the safety of the consumers and sellers. The trust is gained by consumers and sellers through the knowledge that eBay monitors fraud. This gives eBay user’s security and peace of mind knowing that eBay has such high security and a stringent and trustworthy trading regulations. Other than the trust built from security, eBay also maintains a dominant position due to it catering to such a large demographic. It caters to all wants and needs through its ability to sell a large range of items.

The method eBay has deployed in order to reduce fraud is via a feed back system. This system allows consumers to make comments on sellers that are able to be viewed by all potential consumers. The feedback system reduces fraud by letting all consumers know how the seller typically deals with his or her customers. The feed back generally entails the quality of the product and whether or not the item actually matches the seller’s description. Consumers can also give feed back on the time it took to deliver an item so it can be estimated how long a seller will take to deliver. Once again on quality, this can be also verified by the images of the item posted by the seller, if the actual item does not match it, negative feed back will turn off future consumers from particular sellers.

It would be advantageous for a brand name vendor to set up shop on eBay. This would set the brand apart from other brands as their goods are getting views and purchases world wide, which has the ability to increase sales and spread its produces and brand name globally through satisfied buyers. The brand name vendor will also have a higher perception of high quality of goods and services over unknown sellers; this gives consumers more confidence to buy from a brand name vendor.
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