Ebay Business Activity

Topics: EBay, Auction, Online auction business model Pages: 3 (1025 words) Published: September 13, 2011




ANIL BISHT Prof. (Dr.) T. Muthukumar
PTM1001014 Module Lecturer

Business Activity:-
The Functions and Purpose of Businesses - A Business Success? eBay was founded in 1995 by Pierre Omidyar. In just ten years eBay has grown into one of the world's most recognised companies. eBay is an on-line auction house and market place, putting millions of buyers in touch with millions of sellers. These buyers and sellers traded goods worth nearly $20 billion in the first six months of 2005. They have 157 million users worldwide, sell $1,381 worth of goods every second and its gross profit for 2004 was $2.56 billion. The company began when Omidyar received complaints from his wife who was an avid collector of small plastic dispensers of candy called Pez. She complained that there was little opportunity for people who collected these items to be able to exchange them! The company takes a commission from the transactions that occur between traders; in the first three months of 2005 it generated revenues of $1.032 billion (approximately £571,000,000)! The cost to the company of generating those revenues was $186,000,000, whilst overhead costs were $509,000,000.

Q.1 eBay does not 'make' anything in the traditional sense - is it therefore a business? Justify your answer. Ans.eBay is an on-line auction house and market place and it is spread all over the world. eBay never make anything traditional because main job of eBay is to do e-business and there business is to putting million of buyers in touch with millions of sellers. One can purchase any product online from any place in the world. So, eBay act as a bridge in between buyers and sellers in which buyers buy a product from sellers. And doing anything in a...
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