KATHFORD INTERNATIONAL COLLEGE OF ENGINEERING

AND MANAGEMENT
Affiliated to Tribhuvan University
Institute of Science and Technology

Case Study on
“eBay”

A CASE STUDY REPORT

Submitted to
Department of Computer Science and Information Technology
Kathford International College of Engineering and Management
Under the Supervision of
Mr. Sharad Pokhrel

Submitted by
Aarohan Thapa (Roll no. 10215/073)
Sayush Maharjan (Roll no. 10254/073)
Krijan Prajapati (Roll no. 10230/073)
Rajesh Bhatta (Roll no. 10241/073)

24th November, 2019

Acknowledgment
The successful completion of this case study could not have been possible
without the participation and ceaseless co-operation of our colleagues.

We are grateful to our E-governance teacher Mr. Sharad Pokhrel who gave us an
opportunity to undertake such a great innovative work and for and sparing his
valuable time to assist us in our project. We are grateful to him for his insightful
support, guidance, inspiration, constructive suggestions, unfailing cooperation,
encouragement and understanding.

Last but not the least we would also like to thank the people who are directly or
indirectly helped in successful completion of the case study.
 Table of Contents

Introduction ............................................................................................................ 1

Company Overview ............................................................................................... 2

Strategy, Implementation and Marketing ........................................................... 3

Growth Strategy and Marketing .......................................................................... 4

Products and Services............................................................................................ 5

Shopping Process and Payment Channel ............................................................ 5

Success and Revenue Model ................................................................................. 6

Internal Management Decisions ........................................................................... 7

Conclusion .............................................................................................................. 8

Reference ................................................................................................................ 9
Introduction
Ebay (stylized eBay) is the largest and most popular marketplace on the
Internet, allowing members to buy and sell almost anything. Launched in 1995,
about 147 million people now use eBay. An estimated 430,000 people in the United
States make all or most of their living by selling on eBay. eBay’s online payment
service, called PayPal, enables transactions nearly anywhere in the world. eBay
proclaims “trust” between buyers and sellers as the key to the success of the
marketplace. eBay is the “The World’s Online Marketplace”, which is its positioning
statement, and the defining statement of the company’s identity. It enables trade on
local, national and international bases, with a diverse and passionate community of
individuals and small businesses supporting it. eBay offers an online platform where
millions of items are traded each day. The objective at eBay is to “to develop the
work ethic and culture of eBay as a fun, open and trusting environment and to keep
the organization focused on the big picture objectives and key priorities.” Using an
innovative auctioning system, eBay has managed to dominate the world of e-
commerce using its pure play strategy.

The objective of this case study was to thoroughly research eBay and analyze
just how the company performs its business activities electronically; this includes its
business model, internal strategies, and future plans to enhance its functioning and
services.

1
Company Overview
eBay is an international e-commerce organization based in California, USA
which facilitates consumer to consumer (C2C) and business to consumer (B2C) sales
and transactions through its online platform. Initially founded in 1995 as Auction
Web, the company has gone from humble beginnings to the multibillion-dollar
ecommerce giant that it is today. The company manages an online website on which
people can buy and sell a variety of goods online. In the beginning, eBay only
allowed auction type bidding to sell items but the company has evolved over time
and incorporated a buy it now functions as well as other sales methods. Buyers may
use the website for free but sellers are charged a listing and sale commission fee.
Sellers still opt to use eBay however as it has many tools and services which optimize
the selling process. Unlike other sites, eBay has few restrictions and allows many a
strange and unusual item to be sold.

2
Strategy, Implementation and Marketing
eBay’s main source of revenue is from transactions made on the site. Thus,
eBay’s goal is to increase the volume of transactions and number of merchandises
being sold on its platform every day. More detailed objectives are defined to achieve
this goal with the key strategies being:
1. Acquisition - increasing the number of new users on the platform
2. Activation - increasing the number of users who become active buyers or
sellers
3. Activity - increasing the volume of transactions made by active users

The focus of these three areas depends on the local market as well as recent
growth trends. eBay was one of the first ecommerce sites to prioritize categorical
growth. It included a plethora of categories ranging from homemade items to
clothing and fashion to electronics. eBay also quickly diversified user interaction.
Initially only an auction site, it expanded to add a buy it now features relatively early
in life so as to acquire more impulsive buyers.
eBay has also constantly explored new formats, usually through the acquisition
of other companies, for example through the acquisition in 2004 of mobile.de in
Germany and Market plants in the Netherlands, as well as investment in craigslist,
the US-based classified ad format. Another acquisition is Rent.com, which enables
expansion into the online housing and apartment rental category. In 2007, eBay
acquired Stub hub, an online ticket marketplace, and it also owns comparison
marketplace Shopping.com. eBay also has a presence in online messaging services
through its investment in Skype.

3
Growth Strategy and Marketing
eBay believes that the success factors critical to its growth are:
1. The ability to attract both buyers and sellers
2. Volume and pricing on its goods and services
3. Customer service and brand recognition

eBay’s growth strategy is focused on reinvesting in its customers by improving

the buyer experience and seller economics by enhancing its products and services,
improving trust and safety and customer support, extending product offerings into
new formats, categories and geographies, and implementing innovative pricing and
buyer retention strategies. eBay’s initial growth plan focused on word of mouth of
customers but lately it has been teaming up with other companies such as google and
Facebook to increase the scope of its marketing.

4
Products and Services
eBay, at its core, is a platform for buyers and sellers to exchange goods for
currency. It provides buyers with a wide assortment of items to choose from and it
provides sellers with a platform to showcase their merchandise. The main draw is
the auctioning service eBay provides. A seller is able to put an item up for
auctioning. Buyers are then able to bid on the item. Once the allotted time for the
auction has run out, the buyer who placed the highest bid is awarded the item. The
products which can be sold on eBay are vast and various. Electronics, fashion,
vehicles, sports are only a fraction of the categories the website has to offer. It also
offers a variety of services to make the selling and buying process smooth and
efficient.
Sellers are offered store managers which help them in handling their
inventory. Sales analytics tools also help sellers make thoughtful decisions on which
products they should sell to turn up the most profit. eBay provides would be sellers
with marketing opportunities and attractive incentives so as to boost company
relations as well as increase the gross volume of transactions. Similarly, buyers are
offered free shipping and local sales leverage to attract more potential consumers.

Shopping Process and Payment Channel

The shopping process on eBay is simple and straightforward. Users register
for an account on the site. Items can be searched directly or browsed through the
item listings. Once the user finds an item that interests them, they can click on it for
more information and learn all about the listing. The items are mainly sold in an
auction style bidding where the user with the highest bid when time runs out is
awarded the item. However, many items also have a buy it now functions where
bidding can be skipped if desired. If the item is won, the user is asked to confirm
their order. The payment methods for eBay are done either through cash (not
recommended) or PayPal. Though credit cards are also accepted, eBay recommends
PayPal and offers incentives for using PayPal as the primary payment gateway.

5
Success and Revenue Model
eBay has seen massive success since its inception in 1995. More recently, it
has turned up an annual net profit of over $10.75 billion dollars. The ideal success
of eBay has been recognized due to its exclusive business plan. This plan allows the
customers and businesses to provide an authentic ecommerce platform for
auctioning of new or used items at a very low price. The success of eBay can also
be attributed to the trust it builds between buyers and sellers. By retaining faith in
the inherent good nature of people, eBay has created a loyal customer base which
guarantees a constant stream of income.
eBay is based on a transaction fee revenue model, so mainly profits from the
listings on its sites. Though buyers are not charged for browsing the site, seller must
may a small listing fee (insertion fee) which is usually a percentage of the initial
bidding price of the item. A final commission (value fee) must also be paid by the
sellers when the item is finally sold. Though the profit margin isn't much, the
immense volume of transactions which occur on the site easily make up for this fact
and generate billions of dollars in revenue.
New items are also sold at a specified profit margin depending on the
distributor. Additional hidden fees are also present on all transactions made through
PayPal. eBay also benefits from various other sources of income such as advertising
and affiliate marketing but these do not generate nearly as much revenue as the
transactions on the main site.

6
Internal Management Decisions
eBay’s internal management focuses on 10 key areas to increase productivity and
efficiency within the company:
1. Design of Goods and Services
2. Quality Management
3. Location Strategy
4. Layout Strategy
5. Job Design and Human Resources
6. Supply Chain Management
7. Inventory Management
8. Scheduling
9. Maintenance

7
Conclusion
eBay is an online platform, built specifically for the buying and selling of
goods. Anyone is able to register an account and participate in a transaction as a
buyer or a seller. eBay has the vision of becoming the largest public online
marketplace by placing trust in the parties involved in the transaction and relying on
the inherently good nature of human beings. eBay has many avenues of profit. The
majority of eBay’s profit comes from the listing and sale fee, however other
activities such as processing fee, advertisements and affiliate links also contribute to
the gross revenue. Though eBay has a few problems, it continues to dominate the
online marketplace and through further innovations, it will likely continue to be
successful in the future.

8
Reference
https://www.smartinsights.com/ecommerce/ecommerce-strategy/ebay-case-study-2/

https://www.slideshare.net/KaushikPanta/case-study-on-ebaycom

http://dspace.iimk.ac.in/bitstream/handle/2259/42/543-549.pdf?sequence=1&isAllowed=y

http://panmore.com/ebay-inc-operations-management-10-decision-areas-productivity