Amazon vs Ebay Case Study

Jeff Pascale

BUS 400

eBay vs. Amazon Case Study

Professor Bayon

eBay launched in 1995 with the intentions of giving power of the market back to individuals by connecting buyers and sellers with its online marketplaces. The company doesn’t sell any products directly to individuals, merely facilitating the actions between buyer and seller. The company primarily generates revenue through listing and commission fees which are both fixed priced and percentage-based on the listing price and price the item that it ultimately sells for. Expanding its fixed priced sales platform, eBay introduced the retail site Half.com and the “buy-it-now” feature. A year later in 2001, eBay launched eBay stores, which allowed sellers to offer goods through fixed-priced storefronts.

It is difficult for anyone to compete directly with eBay in the online auction market because the website is so unique and unlike any other. eBay gives its user the ability to market, buy, and sell items at an online auction. While Amazon and other sites may give individuals the ability to buy products from the site, eBay creates a unique and different selling experience.

Launched in 1995, Amazon started as “Earth’s biggest bookstore”, but quickly started selling electronics, music, and other products through the site. Amazon is committed to offering low prices across an entire product range. To help adapt to eBay’s large market share, Amazon focused on its supply chain and distribution network, which improved the company’s capabilities in categories where it could not rely on third party distributors. Through its efforts with third party- distributors and effective use of its supply chain, Amazon has been effective in selling merchandise at the lowest possible price while also maintaining the highest profit. Amazon works on a larger scale than most sellers on eBay.

eBay’s net sales have gone from $431 in 2000 to $9,156 in 2010, while Amazon’s net sales have gone from $2,762 in 2000...