E-Commerce

E-Commerce

Major Purpose of EBay: eBay is the number one international market place for all types of products over the Internet. EBay is an online retailer or ‘e-tailer’ that offers people the opportunity to sell and buy goods online. The site charges a commission on sales as well as a charge for listing. EBay typically works through an auction model – i.e. items are auctioned to the highest bidder. The seller can also specify a price below which the item cannot be purchased. You can find almost anything on eBay, and a large proportion of online shoppers know about this website.
Target Audience: eBay is used mostly by small start up businesses, many of which operate from home. There are a number of success stories on eBay, since it enables people to set up a small business and grow it into an online shop. There are actually businesses making millions of dollars, all through their eBay store.

Auction Process for Buyers:

Auction-Style Listings

1 Search or browse to find an item you're interested in buying.
2 Review the entire listing and decide if you wish to compete in this auction. Some things to note are:
· When it ends (always in Pacific Time)
· How many bids have already been placed on the item
· Amount of the current high bid
· The description (and possibly picture) of the item
· Payment methods and shipping costs.
3 Enter your bid with the highest amount you'd be willing to pay for the item. EBay will automatically raise your bid only as much as is needed for you to remain the high bidder. This means that you may win an item for less than your maximum bid, but you can also be outbid if someone else enters a higher maximum bid
4 If you are the highest bidder when the auction ends, you win the auction. As the winner, you are obligated to buy the item for the winning bid price.

Reserve Price Auction
Some auction-style listings have a reserve price, a hidden minimum price, on their item.
How it works:
· A reserve price is the minimum price a seller is willing to accept for the item.
· As a buyer, you are not shown the reserve price, only whether or not the reserve has been met.
· The seller is not obligated to sell the item if the reserve price is not met.
· The winning bidder must meet or exceed the reserve price and have the highest bid.
· When there is a reserved price, bid as usual, entering the maximum amount you're willing to pay for the item.
· Watch the label next to the current price to see whether the reserve price has been met. Until you see that the reserve price has been met, there have been no successful bids in the auction.
· Once the reserve has been met, the item will sell to the highest bidder when the auction closes.
· If your maximum bid is the first to meet or exceed the reserve price, the effective bid displayed will automatically be raised to the reserve price.
The following illustrates a reserve price listing. Although the item has received a bid (see arrow B ) the bid did not reach the seller’s reserve price (see arrow A) before the listing ended. Therefore the seller is not obligated to sell their item to the highest bidder.


Auction Process for Sellers:
A typical auction-style listing works this way:
1. The seller offers one or more items and sets a starting price.
2. Buyers visit the listing and bid on the item during the online auction's duration.
3. When the auction-style listing ends, the high bidder or bidders buy the item from the seller for the high bid.

Usefulness of EBay: Millions of collectibles, appliances, computers, furniture, equipment, vehicles, and other miscellaneous items are listed, bought, and sold daily. In 2005, eBay launched its Business & Industrial category, breaking into the industrial surplus business. Some items are rare and valuable, while many others are dusty gizmos that would have been discarded if not for the thousands of eager bidders worldwide.