EBay Guiding – Assignment Example

The paper "EBay Guiding" is an excellent example of a business assignment.
I would like to bring before you that we have to develop consumer borne value in our company’s effective working policies. We also have to keep the consumers aware of the strategies that we can take to decipher the contracting, fraud and other violation issues existing in this vast combinational network of online eBay’s marketplace. I think it's better to point out each and have a start from the company’s marketplace value.

eBay’s online marketing should supplement self-regulation in implementing policies to empower the marketplace network members. On developing awareness and confidence among the members about the transaction security while selling, buying or bidding can definitely flourish the consumer value on eBay. Reducing the transaction costs of customers and taking an effort to raise support and trust among members as well as between members and the company can create strong value.

I would like to put before you some of the present potential contracting issues faced by the company. Investigations put forth alleged misuses at eBay such as fraud, trading faults, and illegally listed items. In detail like the seller is delivering the product without the quality as in the item description and entering indifferent information on the product. Problems are rising if the buyer makes any alteration regarding the product. Also, we are facing bidding offenses, such as attempts to artificially raise the level of a bidding price and not furnishing the bid amount. With the present verification method, eBay is unable to provide greater assurance to its users about the reliability of potential trading partners.

To overcome all the above-cited issues we need to discuss a solution like ‘Verified User’ type. Member can be given the ‘Verified User’ status by collecting and verifying the personal identification information like social security number with other details. This can be chosen as a way to provide a better assurance to the eBay users on the reliability of potential traders. To make the buyers safer, we can adopt some insurance policy as per the product cost according to the company turnover. Members who engaged in trading offenses or site misuse should be banned future trading on eBay. It is better to establish a convenient online escrow system to protect buyers and sellers from fraud dealings. Escrow holds a buyer's payment and sends it to the seller only after the buyer has inspected the product and gives approval. Simultaneously, sellers have the same opportunity to inspect and approve a returned item before the buyer gets a refund.

Basic contracting fee structure depends on whether user selling the product using an auction-style listing or selling the item at a fixed price. To list an item on eBay, the user will be charged an Insertion Fee. If the item sells, the user should charge a Final Value Fee. The total cost of selling an item is the Insertion Fee plus the Final Value Fee. To illustrate this, eBay charges an insertion fee of £0.10 plus £0.35 for optional features, then 8.75% of the final sale price. If the payment is taken via PayPal, then a further charge of 3.4% plus £0.20 is charged. With a product sale of £50*, the cost for selling via eBay/PayPal would be £6.57 per product (approximately 13% of the product sale price).

As eBay is called the world's largest virtual bazaar and gained the online marketplace, it is not required to invest too much in reducing contracting problems for beating competitors. As usual, because of the fact that the information entered in online dealings cannot be guaranteed, over investing should be done eventually to reduce contracting problems. To proclaim the secure business deals, eBay is under-investing to maintain the marketplace status. As the case study is not providing the marginal revenue (like from new customers) and the marginal cost of extra investment, it is not possible to calculate the best level of eBay savings as well as whether eBay is over or under-investing.

Summary
The company stockholders can gain profits only if the company is having the best demand in the trade market as well as consumer value. For maintaining the present marketplace, eBay is under-investing in its efforts to reduce contracting problems to compete with other online e-commerce companies that have been able to take away some of eBay's market share.