Case Study of Ebay Reference to Rayport and Jaworski 7cs Framework

Topics: EBay, Auction, Electronic commerce Pages: 10 (3122 words) Published: March 1, 2011

The online auction marketplace is a microcosm of e-commerce. Here it consist brief overview of eBay. This document describes how one can use eBay to get the fundamentals of e-commerce, using the Rayport and Jaworski 7Cs framework of the online customer interface. The elements the 7Cs framework are commerce, context, content, community, customization, communication, and connection.

eBay ( is the world’s largest auction site, and one of the most profitable e-businesses. The successful online auction house has its roots in a 50-years old novelty item—Pez candy dispensers. Pamela Kerr, an avid collector of Pez dispensers, came up with the idea of trading them over the Internet. When she expressed this idea to her boyfriend (now her husband), Pierre Omidyar, he was instantly struck with the soon-to-be-famous e-business auction concept. In 1995, the Omidyars created a company called AuctionWeb. Later renamed eBay, the company has since become the premier online auction house, with millions of unique auctions in progress and over 500,000 new items added each day. eBay is now much more than an auction house, as we will see. But its initial success was in electronic auctions. The business model of eBay was to provide an electronic infrastructure for conducting mostly C2C auctions, although it caters to small businesses as well.

Technology replaces the traditional auctioneer as the intermediary between buyers and sellers. On eBay, people can buy and sell just about anything. The company collects a submission fee upfront, plus a commission as a percentage of the sale amount. The submission fee is based on the amount of exposure you want your item to receive. For example, a higher fee is required if you would like to be among the “featured auctions” in your specific product category, and an even higher fee if you want your item to be listed on the eBay home page under Featured Items. The auction process begins when the seller fills in the registration information and posts a description of the item for sale. The seller must specify a minimum opening bid. Sellers might set the opening bid lower than the reserve price, a minimum acceptable bid price, to generate bidding activity. If a successful bid is made, the seller and the buyer negotiate the payment `method, shipping details, warranty, and other particulars. eBay serves as a liaison between the parties; it is the interface through which sellers and buyers can conduct business. eBay does not maintain a costly physical inventory or deal with shipping, handling or other services that businesses such as Amazon and other retailers must provide.

After a few years of successful operations and tens of millions of loyal users, eBay started to do e-tailing, mostly in fixed prices. By 2003, eBay operated several specialty sites, such as eBay Motors, and made wireless trading possible. eBay also operates a business exchange in which smalland medium-sized enterprises can buy and sell new and used merchandise, in B2B or B2C modes. In addition,, the famous discount e-tailer, is now part of eBay and so is, the P2P payment company.

eBay operates globally, permitting international trades to take place. Country-specific sites are located in over 25 countries. Buyers from more than 160 other countries also participate. eBay also operates a business exchange in which small- and medium-sized enterprises can buy and sell new and used merchandise, in B2B or B2C modes. Finally, eBay operates locally: It has over 60 local sites in the United States that enable users to easily find items located near them, to browse through items of local interest, and to meet face-to-face to conclude transactions.

The impact of eBay on e-business has been profound. Its founders took a limited-access off-line business model— auctions—and, by using the Internet, brought it to the desktops of consumers worldwide. This business model consistently generates a...
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