Introduction
E-bay can be defined as a worldwide online market place where both sellers and buyers trade almost all types of goods and services. It is an auction website, started by Pierre Omidya in the year 1995. Recent statistics show that eBay holds ninety-six million users and two hundred and thirty-three customers. A seller lists his available items on eBay at a specified price. He only accepts bids for the items the same way auction takes place. He can also choose to offer the item on the “Buy It Now” option. This is where buyers buy the item at the stated, fixed price. When it comes to auction, bidding opens at a specified price by the seller. This price remains for a few days. At this time, buyers are allowed to place bids. Finally, the listing ends, and the buyer with the highest bid buys the item. Intermediaries include organizations such as banks. Banks process payments, electronic receipts, and payment of bills possible. Banks also provide electronic money services such as electronic banking. Other involved parties are guarantors who guarantee transactions. eBay comprises several components, which include the government, investors, suppliers, intermediaries, employees, and customers (Cohen, 2003).
E-Bay internal organization
Several organization functions take place in the eBay system. Sales and marketing is a significant activity that takes place within eBay. This happens online because everything regarding buying and selling takes place online. The seller will advertise his product on the internet, at a cost, which is relatively low. This enables the buyers to reach several people, potential buyers, who use the internet. Other internal organization functions include engineering, operations, among others. Several firms sell their products on eBay. One can get almost everything at eBay. It is the largest online market place across the world. The organization applies supply chain management. In this case, it uses Information Technology development. It must, therefore, work hand in hand with IT firms. This helps reduce transportation costs and freight charges. The other supply chain is that of manufacturers, distributors, dealers, service providers, among others, who facilitate e-business. The internet helps save on telephone, transport, and warehousing costs (Miller, 2008).
Customers at eBay get a chance to customize their shopping in that they can purchase products of different attributes, going up to fifteen categories. The system contains trust providers. These are third parties who verify the sellers on eBay. This helps meet the required standards, both environmental and ethical. eBay also has a labeling system responsible for putting nutritional labels on the products. Customers can, therefore, identify the product easily, and can also know the product’s environmental effects. They can assess whether the item meets their expectations. This market place helps bring people, products, and organizations together. In addition to that, dialogue on the products becomes facilitated between people, trust providers, and organizations through blogs, articles, and forums (Adams, 2006).
Possible technologies
The software helps facilitate e-commerce. These include software for interactive TV, multimedia content, video on demand, internet information retrieval, webcasting development, among others. Operating system software and Administrative Support Software include also necessary software in eBay. eBay also maintains an intranet to facilitate communication with employees. This leads to greater productivity in eBay. Important tools to agents, buyers, and consumers also are maintained. Intranets use the Web based interface; hence, they are different from internal emails.
Extranets exist as well in eBay. These help people outside the organization to access the organization’s information by use of systems protocol called TCP/ IP. The information is, however, protected because only legitimate users can access it by use of passwords. Selected customers only can access the organization’s specialized data. These customers can also access the organization’s intranet to obtain product specifications. The internet plays a crucial role to facilitate information transmission. Security systems must be provided to ensure that only legitimate users access the organization’s information (Schepp & Schepp, 2004).
Recently, eBay started using web 2.0 applications by announcing eBay Wiki by Jot Spot as the host. It is intended to enable members to offer expert information on eBay topics. This also intended to help people, the public, to get answers to questions they frequently ask about eBay. Members also create eBay Blogs, which help business people promote their businesses. The organization also uses leased lines. These are business internet connections, which are reliable due to their high speed, and have different speeds ranging from 256kbps to 1Gbps (Spencer, 2006).
Payment and privacy systems
People use PayPal to shop online at eBay. PayPal can be found almost everywhere, and this method of payment grows steadily. This payment method does not require an individual to have a computer next to him to make the payment. Mobile phones can also be used at eBay and this method is fast in making and receiving payment. PayPal is secure since an individual’s financial details are not shared through the internet. It safeguards details regarding a client’s bank, debit, or credit card. Detailed references can be found online to help one manage his PayPal account. One can as well change the password if he wishes to change (Botha, 2004).
According to Shipman, eBay follows “privacy by Design” principles. These principles advocate for openness, privacy, user-centric, and avoiding risk to prevent a breach from occurring. Pal Pay provides more privacy than credit cards. PayPal merchants do not receive buyers’ full details. Instead, they receive the username only, which solely cannot be used fraudulently. eBay auction site monitors browsing history, user behavior, sales, failed bids, and purchases. It, however, promises that it will not share personal information with other parties. This information helps eBay to advise merchants on products’ demand and their prices across the world to assist them in making informed decisions. It also helps to make customized advertisements. Information regarding people’s behavior helps in detecting illegal activities that could be going on at eBay. Such activities could include, among others, fraud and money laundering. This happens the same way banks monitor clients’ bank accounts. eBay ensures trust between buyers and sellers by obtaining this information (Kalakota & Robinson, 2001).
Benefits of the e-business system
E-business helps individuals to sell and purchase items without facing time or distance barriers. People do not travel long distances to sell or acquire an item. A person needs to log in to the internet at whichever time, whether during the day or at night. This is a significant benefit because it enables people to save time, which could be spent traveling to other countries to acquire something or to sell something. In today’s modern world, we all know that a person cannot recover a wasted second. Time-saving is, therefore, an important benefit, which cannot be overlooked. Another benefit includes the lowered cost of sale because there is no human interaction. Again buying on the internet eliminates errors and is faster. The method is also convenient for the buyer. E-business becomes beneficial when dealing with niche products, which have few customers (Papazoglou & Ribbers, 2006).
When such products are traded over the internet, the market widens, and more volumes could be sold rather than if e-commerce did not exist. E-business is a cheap means of transacting business activities. Several costs get eliminated such as transport costs to reach a product. By the end of it all, an individual spends less money than transacting using other means. E-business offers an opportunity to purchase alternative products. E-commerce is also beneficial in that it helps reduce the time for delivery of products, costs regarding documentation, error correction, mail preparation, reconciliation, data entry, telephone calls, overtime, and supervision expenses. E-business also helps reduce personnel required to perform the transactions. It also reduces the strain on other resources. All the above benefits show us the power of e-business (Prince, 2003).
Possible e-business issues
Security and privacy issues
Doing business on the internet gives some privacy and security issues, different from carrying business elsewhere. It is, therefore, necessary to institute privacy and security measures in e-businesses. This would help ensure that customers have confidence in the business while shopping online. A businessperson, operating online, need to understand the intruders who may affect his business. Viruses are a key threat to e-commerce. They can come to somebody’s computer, and they come from a variety of sources. Downloading information from the internet and opening affected emails can bring viruses into a computer. A business computer, affected by viruses, could send spam emails to customers. It can as well shut down the computer completely. Antivirus needs to be installed into a business computer so that the computer is prevented from virus attack. Antiviruses such as MacAfee and Nod32 exist, which offer protection to the computer? The antivirus must also be updated (Pugh, 2009).
Hackers and unauthorized users may end up accessing the personal information of customers. This information may include financial information, which can create problems including theft. Accessing personal information can be dangerous because a person can end up losing all his money to hackers and other thieves. Firewalls should be installed so that they do not access information on a business computer to block unauthorized users. Failing to install a firewall means anyone can access information on your computer, which could be risky. The firewall also needs to be updated regularly as it would further protect your computer. It would also be necessary to install an automatic firewall, which updates itself regularly. This ensures the protection of the computer throughout (Kidd, 2000).
Loss of business data may also occur as a result of virus attacks and another computer malfunctioning. Important data may end up getting lost, which could lead to losses in the business. To prevent data loss, the business owner should ensure that his computer has a backup protocol. The backup ensures that recent data and programs in the computer have a copy, which can be used, in case the original data gets lost. The backup, therefore, ensures that the computer does not suffer a loss due to virus infection. The back also helps to retrieve data in case theft or fire affects the business website (Turban, King, Lee & Liang, 2010).
E-business marketing issues
Research conducted by eBay revealed that consumer behavior could be determined by consumer demographics. Old people, who grew up in an era when computers did not exist, rarely use eBay. Younger people, who are familiar with computers, use eBay services since they have the opportunity to use computers. Familiarity with computers determines whether a person will use eBay services. Gender also affects consumer behavior in that females utilize e-business than males. Women believe that business is a social activity. Internet being a social site, they do online purchasing. Most eBay consumers are, therefore, women. Income also affects consumer behavior. Consumers with high income have chances of coming across the internet, and can, therefore, purchase and sell items online. Other factors affecting consumer behavior include family size and consumer attitude (Weber, 2008).
eBay practices market segmentation, targeting, and positioning. The organization first determines the customers who exist and their needs. The organization then decides the customers who are the best fit for a product, and finally, the segmentation strategy gets implemented. Channel conflict occurs at eBay when manufacturers disintermediate retailers, distributors, sales representatives, and dealers. In this case, they sell products directly to consumers. Channel conflict also occurs whenever there is overproduction, resulting in a product surplus. It becomes, therefore, necessary for the business organization to have a clearance strategy to avoid this problem. eBay operates in an environment where there are fewer barriers to entry because anyone can join the market provided he has the relevant requirements, usually a computer and the internet. This leads to perfect competition at eBay (Li, 2007).
Conclusion
A seller lists his available items on eBay at a specified price. He only accepts bids for the items the same way auction takes place. He can also choose to offer the item on the “Buy It Now” option. This is where buyers buy the item at the stated, fixed price. When it comes to auction, bidding opens at a specified price by the seller. This price remains for a few days. At this time, buyers are allowed to place bids. Finally, the listing ends, and the buyer with the highest bid buys the item.
References
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Kidd, P. T. (2000). E-business: key issues, applications and technologies. New York: IOS Press.
Li, F. (2007). What is e-business? How the Internet transforms organizations. New York: Wiley-Blackwell.
Miller, M. (2008). Absolute Beginner’s Guide to EBay. New York: Que Publishing, 2008.
Papazoglou, M., & Ribbers, P. (2006). E-business: organizational and technical foundations. New York: John Wiley.
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Schepp, D., & Schepp, B. (2004). EBay Powerseller Secrets. New York: McGraw-Hill Professional.
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Turban, E., King, D., Lee, J., & Liang, T.P. (2010). Electronic Commerce: A Managerial Perspective. New York: Pearson.
Weber, S. (2008). Selling on Ebay for Part-Time rr Full-Time Income, Beginner to Powerseller in 90 Days. New York: Stephen Weber.