Founded in the year 1995, eBay is an e-commerce corporation which is working all around the world. The business model of eBay deals with the Business to Consumer and Consumer to Consumer Sales via eBay website and application.
In this post, we will be diving deep into the business model of eBay and go through its success story of becoming multi-billion dollar business in more than 30 countries.
So, without delaying any further, let us get started.
Introduction to the Business Model of eBay – Auction Style Sales
When we are talking about the companies that tend to provide all the important services to the buyers as well as the sellers, then there is one name that always comes to the mind of people. We are talking about eBay, and there is no doubt that you have heard the name of the company for sure.
This is one of the companies where people can post different ads about the products that they want to sell to the customers to have the best experience of selling the products.
Not just that but the people who are interested in buying the products will also be able to make sure that they can get everything that they are interested in so that they can make some amazing purchases for all the stuff that they want to have.
Because of this way of channelizing business, eBay site is also understood as Online Auction and Shopping website.
eBay is one of those companies which are working hard to reach the top when it comes to the buyer-seller experience. That is one of the main reasons why new entrepreneurs and business owners need to know about the business model of eBay.
A Little Knowledge About The eBay Company | Business Model of eBay
Before moving into the important sections such as the business model of eBay company, it is essential to make sure that there is a proper understanding of the company as a whole.
This company is a pioneer when we talk about the marketplaces which are present for the consumer dealing and other options as well.
As we had discussed in the beginning, the company supports two types of transactions. One is consumer-to-consumer, and the other one is business-to-consumer as well.
It comes off as a surprise that the company first started as a place where people will be able to sell all the collectibles that they had without any hassle. It is an auction front for the people as well.
However, the business has managed to change the front that it uses, and the focus of the business has changed as well. There is no doubt about the fact that the site is one of the best online marketplaces for the people.
This service is pretty classified, and that is one of the main reasons why it is one of the most popular companies for people these days. With the help of the company, many people are able to buy and sell products in the best way.
eBay Value Proposition for the Customers
- Fast Delivery
- Large product catalogue
- Free shipping
- Quality assured products
- Order tracking
- Review and Feedback of products
- Product return policy with 100% money-back guarantee
eBay Value Proposition for the Sellers
- International online audience
- Bidding and buy it now feature for selling of a product
- Opportunity to enhance the sale
- Efficient marketing and distribution channel
- Good customer satisfaction
Now that you have an idea about the company, we can move into some of the other parts such as the business model and the other details such as the ways with which the company can make the money that it needs as well.
Diving deep into the Business Model of eBay
eBay Business Model is divided into its five different approaches that we will discuss here and now
#1. Offering Unmatched Services with Personalized e-Trade & e-Commerce
eBay’s main goal is to give unmatched support to its clients.
It is for sure, a primary goal of every company but what separates eBay from other e-commerce companies is their remarkable assurance to adhere to their objective.
eBay’s unique plan of action has empowered them to be amongst the market leader in offering the boundless numbers of items to their audiences. Not just this, eBay offers a medium to new businesses for flourishing and widening their reach.
eBay comprises great knowledge of empowering individuals to complete online exchanges with the utmost ease. Their amazing administrations empower a customized understanding between the seller and the buyer.
It also offers a business opportunity to its users as well. This enables the company to enjoy the widest range of audience base to channelize the business effectively and generate revenues.
#2. Incorporation of Powerful Acquisitions and Investments Strategies
If you are thinking about the reasons why and how eBay accomplished the top position in the business world, then its profoundly skilled acquisitions are, for sure an important reason.
As per the 2018 data, around 64 organizations are secured by the company. Some of the top companies whose acquisitions are done by eBay are-
#3. Global Presence with Worldwide Diversification and Integration
eBay is spread all over the world, and it has done an adept integral of its worldwide audience base to widen its reach and optimize profits.
Company’s way of thinking to face difficulties in the new geography has opened innumerable doors for their work environment, workforce, and commercial centre.
They started or participated in some special social programs in the new locations, and along these lines, they have united sellers and buyers in an absolutely agreeable and promising manner.
#4. Having a Business Model with Sound Ethical Value and Philanthropic Activities
eBay is amongst the founding members of Global Coalition to End Wildlife Trafficking Online that plays a key role in saving threatened and endangered species from the unlawful exchange.
Moreover, eBay has an objective to raise a philanthropy fund of $1 billion by 2020 that had arrived at an estimation of $84 million out of 2017. Aside from these, the company likewise supports new entrepreneurs that enable eBay to affect 250,000+ lives at a worldwide level.
This empowers the company has the impactful global presence that optimizes its existence and hence sales and profits.
#5. Having eBay University to serve and empower its Users
Aside from being one of the best e-commercial giants, eBay is likewise wandered into the field of education and training through eBay University. This is used for turning users into the ace dealers.
eBay designed this university, so the users can learn advanced and adept ways of using online businesses to ace the idea of the e-commerce business.
It has also been quite empowering for the entrepreneurs in taking their business to the top level. eBay clients can likewise join up with a course to get outfitted with top highlights of the ‘Seller’s Assistant Pro.’
With the help of this, eBay users will be able to efficiently use the training program to boost their trades and profits.
How Does eBay Make Money? | Business Model of eBay
When it comes to learning how eBay can make money, there are some different things that people need to know about.
Well, this can be said without a doubt that the revenue model of the company consists of many different factors such as the eBay market place, branding solutions, advertising options, and the subsidiaries as well.
So, people need to know every single thing about these different aspects of the eBay revenue model.
#1. Bay Marketplace
When it comes to online trading, there is no match for eBay, and we already know about it for sure.
The platform is known for providing many benefits when it comes to the amazing people-to-people transactions that happen most of the times for sure. This is the one thing that is important for people these days.
Hence, they are ready to spend most of their money to make sure that they can have all the benefits to themselves. Also, the company works really hard in order to provide all the important services which are important for the people these days.
So, that is one of the factors with the help of which the company is able to earn a little bit of the revenue for performing all the other actions in the company.
#2. Insertion Fee
This is another one of the most important ways with which the company is able to generate some of the money which can be used in order to create more profits for sure.
We all know that there are many different sellers that come to the site in order to make sure that they are able to sell their products at the best rates.
Now there is one thing that they have to do when they want to enlist their article on the site of eBay without any trouble. The users are requested to pay a certain amount as the fee of insertion, which is important for them.
The listings that they provide are important, and to have that service, they need to pay a certain amount of fee for sure.
This is one of the best ways in which the company can have the money that they need to have the profits that they want for sure. The fee can be different from person to person based on the listings that they make. So, that is one thing that they always have to keep in mind for sure.
#3. Final Value Fee
There is also a commission that the company gets from the different sellers that are on the platform these days. This commission is really important, and it is termed as the Final Value Commission as well.
This commission is either 3.5% or 10% based on the product that is provided on the site for sure.
So, this is certainly one of the most important things that the people need to keep in mind for sure if they want to know how the company can generate the amount of money which is essential to keep the company running in the best shape for so long.
eBay enables sellers to advertise their products on the platform in exchange for money.
For advertising on the platform, sellers need to pay a fixed amount that also plays a significant role in boosting the revenues of the company.
eBay comprises a long list of acquisitions, and the company is also involved in buying many other companies as well.
We had discussed some of the top companies that are part of eBay acquisitions.
With the help of these acquisitions, eBay efficiently grows its reach and revenues.
So, that is all you need to know about the business model of eBay as a company and how it can make money to ensure the success of the company as a whole.
This article was meant to provide an insight into the different business techniques that are useful for the company, so we certainly hope that it was helpful to you in understanding all that you need to know.
What are your thoughts about the business model of eBay? Share your views with us in the comments below.