Revenu Model Paper

Brokerage Revenue of EBay:

EBay uses business model named Brokerage model. EBay is one of the most successful companies in the Auction Brokers categories of e-commerce. Companies such as eBay use brokerage model often approach the market in different ways and earn their profits. An American multinational internet consumer to consumer corporation is named eBay. Its headquarters is located in San Jose, California. It was founded in the year 1995 and was known as success story during the period when the dot-com bubble occurred. EBay Inc. controls eBay.com which is an auction and shopping based website where people and businesses purchase and sell various goods such as electronics, apparels, jewelry, sport items, automobiles and even aircrafts as the list of goods eBay has is never ending. EBay does have inventory like Amazon does which is a known fact. EBay is known for its technological based platforms and E-commerce tools. EBay generates its transactional fees from PayPal which is a convenient online payment system designed for customers. It also

* | US $ (in thousand) | Percentage |

REVENUE MODEL Transaction fees Marketplace Payments Communications | 4,203,3401,401,824192,756 | 70.4%23.5%3.2% |

Advertising and other | 171,821 | 2.9% |

Total Revenue | 16,593,986 | 100% |

earns its revenues by listing a customer’s good online which is posted on the eBay website to be sold. Lastly, it also gets some of its revenues from advertising fees. In the year 2011, EBay sales amounted to a whopping $ 68.6 billion which means every second goods worth $2100 were sold. EBay operates in more than thirty countries. EBay’s sole purpose is not to only sell, but to connect people (Wei, 2013)

Insertion Fees for auction-style format listings | |

Starting or reserve price | Insertion Fee |

$0.01–$0.99 | $0.10 |

$1.00–$9.99 | $0.25 |

$10.00–$24.99 | $0.50 |

$25.00–$49.99 | $0.75 |

$50.00–$199.99 | $1.00 |

$200.00 or more | $2.00 |

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