Contrast eBays original business model with its current business model

Published: 2019-09-02 23:26:51
513 words
2 pages
5 min to read

eBays original business model was introduced by the companys founder, Pierre Omidyar. Essentially, the model introduced eBay as a virtue market entity that allowed its customers to sell goods and services. Progressively, the model evolved into a business model that connected people compared to the conventional concept of direct selling of products to valued customers. Consequently, this development necessitated the creation of a peer-to-peer platform where sellers can enlist their products and buyers place their bids.

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On the other hand, the current business model seeks to enhance the experience of the original platform by introducing a forum where potential buyers and sellers can engage in advanced dialogs. Buyers can now refer services from associate online platforms in addition to the buyer protection program.

In synopsis, the original model was mainly focused on auction, advertising, a transaction revenue model that comprised of a high listing fee and low sales income. The current model, however, is pivoted on fixed price goods. The current model also develops on the previous one by improving on advertising and the transaction revenue model that now allows free listing fee and increased sales commission. The model has also allowed for acquisitions such as PayPal and Gumtree and the introduction of same day shipping.

What are the problems that eBay is currently facing? How is eBay trying to solvethese problems?

In addition to fraud, eBay is currently facing an array of problems such as decreasing growth, increased competition, move to fixed price by customers, and concerns about customer support satisfaction. Fraud problems include lack of customer protection against credit card frauds not to mention copyright infringement issues.

The company has adopted various measures in a bid to solve these problems such as setting seller limits on brand products, ratings, and feedback, acquiring PayPal, and putting in place safety programs. eBay has also adjusted its fee structure and its ordering system to attract bulk sellers. Additionally, the company also seeks to expand its portfolio by acquiring its competition and increasing its business growth.

Are the solutions eBay is seeking to implement good solutions? Why or why not?Are there any other solutions that eBay should consider?

Whereas most of the eBays solutions have been effective, the companys marketing model has resulted in an identity crisis. Be that as it may, there has also been an increase in the number of potential bulk sellers. Small sellers have been worsened while modification of search ordering only puts high sellers at an advantage. Ultimately, acquisitions have expanded the companys portfolio, but the e-commerce site is still struggling.

eBay can most definitely adopt other solutions such as developing the mobile e-commerce strategies and rolling out a retail line.

Who are eBays top three competitors online, and how will eBays strategy help itcompete? Will eBay be providing a differentiated service to customers?

eBays top three competitors include Amazon, Google, and Overstock. eBays fixed price strategy is arguably less differentiated as it seems to be focused on rolling back to the conventional auction model with one difference that it may help the company stay afloat in the long haul.

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