Prospects of eBay

Eric Aguilar

Jordan Trevino

Over the years, eBay has seen continual growth by adapting and accommodating its customer base through strategic decisions taken by its management team. Since eBay’s inception in 1995, eBay has grown into an ecommerce giant by setting the standard for many ecommerce auctioning websites. With the relationship between sellers and consumers ever changing within the online climate, eBay has overcome multiple challenges faced by other online competitors. Many of the ways eBay has seen growth include: the sellers’ experience, dictating their internal growth strategies, the role of digital media and Internet innovation, and the acquisition of PayPal including its split.

One of the first ways eBay has experienced continuing expansion is the relationship the company has with its sellers. By implementing, sellers independent from the company, eBay faces the challenge of whether or not the seller meets the standard of the company. To quote Forbes Magazine, “In the 2015 seller update, eBay introduced a few changes to its listing requirements whereby sellers are required to include product identifiers for listings in certain categories (What Are The Key Growth Drivers for eBay?). It is astounding that only up until 2015 eBay had not been using product identifiers for the customer base to search for commodities. By using this new method of searching, eBay hopes to increase the amount of organic traffic. Organic traffic can best be described as the amount of Internet users discovering their search products through the use of popular search engines such as Google. While inorganic traffic can be the amount of people discovering a product through typical website advertisements such as banners or pop-ups. Recent recognition in the seller experience of eBay has caused for several renovations to the selling platform. eBay has reported that there is an increasing amount of sellers dissatisfied with the current system of selling (What Are The Key Growth Drivers for eBay?). To combat this dissatisfaction, eBay introduced “Seller Hub.” Seller Hub is a system in which seller may see analytical data about their products to increase their revenue. eBay is also wishing to introduce a system to tackle Amazon Prime’s delivery service. This new delivery system, coined “eBay+”, would have same-day delivery service, and the company wishes to begin testing this new service in Germany within the next year (What Are The Key Growth Drivers for eBay?). Clearly, eBay recognizes that the sellers and their overall experience of the website is able to make or break their website along with innovations to the selling process. It is reported by the Trefis Team of Forbes that the establishment of these new selling services will have a positive impact on the company by increasing the organic flow of the company.

Another interesting component in the expansion of eBay since its founding is their seller growth strategies. Any great company dictates their mission statement to ingrain a belief system within their employee base and eBay does just the same with how they present their plans for seller growth. eBay writes their seller growth strategies in ten steps on their website: “get great feedback and DSRs, do your research, use the Seller Dashboard, encourage multiple purchase, open an eBay store, save time with seller tools, drive more traffic to your listings, go global, source products on eBay, and lastly, get tips and resources to grow your business (Top 10 Growth Strategies). eBay deems it is important for them to help their sellers out as much as possible because the sellers are the business of eBay and a sales commission is made off of every individual item purchased. The company first asks its sellers to get great feedback. The company is encouraging its sellers to think more as a business rather than a person selling in order to establish a consistent seller for the company. Feedback provides a great resource as to increasing likeability and profits within the website. The next step is to do research. eBay reports “detailed business analysis sets the most successful sellers apart (Top 10 Growth Strategies). To aid in research, eBay recommends the use of their Listing Analytics app and eBay Sales Reports programs in order to better understand the marketplace and track current trends. The next step is for the seller to use the Seller Dashboard; this program measures policy compliance as well as buyer satisfaction in order to better understand the seller’s customer base. Step four says to encourage multiple purchases by offering shipping discounts or use the Markdown Manager tool. By encouraging multiple purchases, the seller’s profits and the amount of commission sales made off of the items for the company are greater. eBay lists that in order to get the full experience, a user must open an eBay store. This allows the seller access from 150 to 2,500 free listings per month. The next step advises driving more traffic to your listings through the use of search engines and carefully crafted product keywords. The company then recommends for the seller to go global through the use of their international trading system. Penultimately, eBay encourages sourcing products by purchasing bulk lots for re-sale. Lastly, the company wishes for the sellers to get tips to grow the business by visiting the Seller Center on the website. These ten eBay rules of thumb for the seller increases the satisfaction of the seller and the overall firm.

One thing that has been a major part of eBay’s growth is their ownership of several other companies. One of the significant companies owned by eBay was PayPal, which allowed the sellers to transfer money between themselves and consumers safely. However, in 2015 the two companies decided to split leading many stockholders to believe this would hurt eBay’s growth. After about a year, the split has seemed to do the complete opposite. By separating from PayPal, eBay has been able to focus more than ever specifically on their own goals and missions. In this instant a lack of technology was actually able to aid the growth of eBay. Although PayPal “originally pitched the deal as a way for eBay to boost PayPal transactions by driving buyers and sellers toward the payment service” there seemed to be no other links between the two companies (Everything you need to know about eBay and PayPal’s split).The only downside that could occur from this split is the chance that other competitors such as Amazon could go and buy PayPal, which could make it hard on eBay.

In the last year eBay has been doing everything it can to compete with it’s competitors and to stay ahead of the game in the technology world. In the past year, “The company paid $2.4 billion for e-commerce platform provider GSI Commerce in March 2011 and a few months later bought the 51% it didn’t already own of online retail software provider Magent” (eBay turns to technology). eBay continues to buy out other companies that can help advancing their technology. One concern eBay has when competing with other companies is mobile presence. By purchasing a platform and software provider, eBay was able to further enhance all aspect of their website and make it more user-friendly.

In conclusion, eBay has made major strides in forming their identity as a company and continue to improve with certain strategic managerial decisions. Of all the decisions, eBay’s prominent decisions come from its customers. eBay weighs in customer feedback and forms a decision in order to better the company as a whole. If the eBay decision making process were placed into a pyramid, customer feedback would be the foundation for the firm. After which, the decisions on influencing the customers, and managing other company operations such as PayPal. All in all, because of the care that eBay puts into relying on its customer feedback and the decisions made from this, eBay is projected to see continual growth through 2020.

“What Are The Key Growth Drivers for EBay?” Forbes. Forbes Magazine, 12 Nov. 2015. Web. 13 Feb. 2016.

http://www.forbes.com/sites/greatspeculations/2015/11/12/what-are-the-key-growth-drivers-for-ebay/#415f9af63649

“Top 10 Growth Strategies.” Top 10 Selling Growth Strategies. Web. 13 Feb. 2016.

http://pages.ebay.com/sellerinformation/build-your-business-online/grow-your-sales/top-10-growth.html

http://ivythesis.typepad.com/term_paper_topics/2009/09/how-the-characteristics-of-digital-media-have-supported-ebays-growth.html

“Everything you need to know about eBay and PayPal’s split — and how it impacts Amazon.” GeekWire. Web. 13 Feb 2016.

http://www.geekwire.com/2015/everything-you-need-to-know-about-ebay-and-paypals-split-and-how-it-impacts-amazon/

“eBay turns to technology.” Internet Retailer. 1 June 2012. Web. 13 Feb 2016.

https://www.internetretailer.com/2012/06/01/ebay-morphs-e-commerce-technology-power