Topics: EBay, Auction, Online auction business model Pages: 2 (627 words) Published: May 28, 2013
Business Model

eBay is an online person-to-person trading community on the Internet. Buyers and sellers are brought together whereby the sellers are allowed to list items for sale and buyers to bid on interested items. The items are categorized by topics, where each type of auction has its own category. eBay has both streamlined and globalized traditional person-to-person trading, which has traditionally been conducted through such forms as garage sales, collectibles shows, flea markets and more. This enables buyers to search easily and enables the sellers to immediately list an item for sale within minutes of registering. eBay takes between 7 and 18 percent of the selling price as commission for letting them use its software.

There are no charges on buying and bidding auctions, however, sellers are charged two kinds of fees. eBay Australia has introduced 30 free auction-style listings per month and there after you are charged the ‘Insertion Fee’. • When an item is listed on eBay a non-refundable, Insertion Fee is charged, which ranges between 50 cents and $3.00, depending on the listing start price of the item. A fee is charged for additional listing options to promote the item, such as highlighted or bold listing. • A Final Value (final sale price) fee is charged at the end of the seller's auction. This fee is 7.9% of the final sale price, there are other circumstances and exceptions but this is the general figure.

eBay automatically notifies the buyer and seller via e-mail at the end of the auction if a bid exceeds the seller's minimum price, and the seller and buyer finish the transaction independently of eBay. The binding contract of the auction is between the winning bidder and the seller only.

In eBay, user trust is a key issue. At no point during the auctioning process does eBay take physical possession of either the item being sold or the buyer's payment for the item. In the traditional Buy/Sell model the buyer and the seller usually exchange...
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