eBay and Amazon case study Essay

1223 Words Nov 23rd, 2013 5 Pages
7/30/2013 eBay, Inc. and Amazon.com (A)

Situation of the case: eBay is now faced with a direct competitor, Amazon.com. Even though Amazon.com has received most of the hype and publicity surrounding e-commerce, eBay has also built an innovative business truly sited to the internet. Initially, Amazon’s goal was to be the “Earth’s Biggest Bookstore” Since then, the company also entered music, video, toys and electronics business, extending the retail capabilities it had developed for books. Meanwhile, eBay aims to offer online marketplaces for the sale of goods and services, supplemented by other e-commerce platforms and online payment solutions. This case briefly explores the situation faced by both Amazon and eBay as they compete
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Amazon:
Launched a review system that allows buyers to see those helpful reviews before purchasing an item.
Introduced a free shipping policy on orders of $99 or more
Launched a program called “Prime” that gave members free and unlimited two days shipping for an annual fee.
Launched its auction business and at the same time also guaranteed purchases up to $250 in case of fraud.
Launched zShops, an online supermall that offered small and medium sized merchants the ability to operate storefront within Amazon’s site for a monthly fee and per sale commission.
Adopt a “single store” strategy that allows third party merchants to sell their products alongside with Amazon’s own goods.
Launched a service called “Fulfillment by Amazon”, also allowing third party sellers to use Amazon’s distribution and warehousing network to ship and store products.

Primary and secondary target markets: eBay and Amazon’s primary target market are buyers looking to buy products online. This is because with more customers visiting their website, they can generate more sales and earn more. Meanwhile, their secondary target markets are third party sellers who wish to sell products through their website. They help to connects buyers and sellers, in the process generating revenue from sellers through a fee for listing items and commission fees payable on completed transaction.

What are the main problems in the case? The main problems are:
In 1999, Amazon launched its

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