2.

e-Bay
2.1 Company Introduction
eBay

Inc.

is

an

American multinational

corporation and e-commerce company,

providing consumer-to-consumerand business-to-consumer sales services via the Internet. It

is headquartered in San Jose, California. eBay was founded by Pierre Omidyar in 1995, and
became a notable success story of the dot-com bubble. Today it is a multibillion-dollar
business with operations localized in over 30 countries.
The company manages eBay.com, an online auction and shopping website in which people
and businesses buy and sell a broad variety of goods and services worldwide. In addition to
its auction-style sales, the website has since expanded to include "Buy It Now" shopping;
shopping

by UPC, ISBN,

or

other

kind

of SKU (via Half.com);

online

classified

advertisements (via Kijiji or eBay Classifieds); online event ticket trading (via StubHub); and
other services. It previously offered online money transfers (via PayPal), which was a wholly
owned subsidiary of eBay from 2002 until 2015. The website is free to use for buyers, but
sellers are charged fees for listing items and again when those items are sold.

Figure 2.a : eBay webpage

2.2 Company strategy

Corporate strategy The whole foundation of eBay, lies on the idea that practically anything
that can be bought and sold can be facilitated through this Internet retailer, and this auction
platform provider was implementing the concept of e-commerce even more forcefully.
2.2.1 Establishing a larger user base To attract new users, eBay established relationships
with more than 60 websites, including America online which gave eBay the largest access to
the largest user base on the internet and prevented AOL from entering the auction arena, bay
also added dealer to person trading and addresses the fast growing and fragmented small
business market by creating a feature called business exchange.
2.2.2 eBay concentrated on local and international trading EBay has local sites in 53 U.S
markets they deliver distinct regional flavors and give users the convenience of shopping
locally for difficult to ship items such as automobiles or antique furniture. The company also
built a truly global presence with users in more than 150 nations.
2.2.3 Creating a strong brand For eBays first few years it did not spend a single penny on
marketing, relying instead on viral marketing and its ability to piggyback on competitors
ceaseless (and expensive) efforts to retain IIMK IIML Conference on Global Competition &
Competitiveness of Indian Corporate 545 market recognition. The companys brand building
shifted though with the arrival of new top professionals.
2.2.4 Broadening the trading platform By 1999, eBays fourth year, a host of competitors
had entered the online auction market, while eBay had the first entry advantage, not all of its
competitors were small start ups, some including yahoo and Amazon were internet significant
players with extensive, established user bases.
2.2.5 Maintaining a strong community affinity The company believes that fostering direct
interaction between buyers and sellers with similar interest had enabled it to create loyal,
active community of users, As noted earlier this emphasis on community building has been
present since eBays founding.
2.2.6 Continually enhancing site features and functionality Because eBays strategy is to
be as hands-off as possible when it comes to transactions, the company has to provide a

reliable and straight forward way for users to manage the process on their own, buying and
selling on eBay are made easy for users to manage the process on their own.

2.3 Ebays Basic Working Modal

Figure 2.b Basic business modal

The company delivers four big solutions to its customer base:

commerce technologies

retail order management

operations

marketing solutions

Unlike the other companies on the list, eBay Enterprise goes beyond software integration and
into marketing and operations. In terms of retail solutions, eBay Enterprise provides support
for commerce integration across channels. The company integrates the main sales touch
points, with the help of its omnichannel tools:

1.

web

2.

smartphones and tablets

3.

store associates

4.

interactive kiosks

5.

customer service

The omnichannel operations tools cover a lot of ground and can be used in fulfillment
operations, customer care and store based fulfillment.

Figure 2.c: Ebay Enterprise interface and tools

2.4 Value chain analysis of Ebay

A value chain is the whole series of activities that create and build valueat every step. The
total value delivered by the company is the sum total of the valuebuilt up all throughout
the company. Michael Porter developed this concept in his 1980 book 'Competitive
Advantage'.

Figure 2.d Value chain of eBay

2.4.1 Value Chain Analysis

The value chain is a systematic approach to examining the development of competitive

advantage. M. E. Porter created it in his book, Competitive Advantage (1980). The chain
consists of a series of activities that create and build value. They culminate in the total value
delivered by an organization.
Primary Activities
The 'margin' depicted in the diagram is the same as added value. The organization is split
into 'primary activities' and 'support activities.' Primary activities include inbound logistice,
outbound logistics, marketing and sales, operations, and service.
Inbound Logistics
eBay operated as an online venue for buyers and sellers, sellers listed items and provided
descriptions, often including photographs, an auction was conducted, in which potential
buyers could bid on the item on sale until a fixed time (unlike traditional auctions, which
continued until no more bids were placed), the sellers specified the conditions of the auction,
as well as the time the auction would close, bidding was often active as the auction neared
closing time, sometimes driven by automated sniping programs that some buyers used
their bid in just before the auction closed, so these created an interesting and involving
environment
Operations

One incident, in 1997, there were forty categories of items for sale, the posting of antiques
and collectibles had increased dramatically, and additional categories for these items were
needed, eBay evaluated the items listed and developed many new listing categories, without
even consulting the community, it doesnt have to bother about goods which are to be
manufactured or assembled and individual operations, Bay was not bothered about the
operations aspect of any goods, it only provided a virtual roof for enabling transactions
Outbound Logistics
eBay acted as an online auction site so they need not be worried about goods being sent along
the supply chain to wholesalers, retailers or the final consumer

Service
EBay community flourished, this community was analogous to a real world society, in which
people interacted with each other under a set of shared rules and expectations, this excludes
all areas of service such as installation, after-sales service, complaints handling, training and
so on.
Procurement
eBay need not be worried about procurement; (this function is responsible for all purchasing
of goods, services and materials, the aim is to secure the lowest possible price for purchases
of the highest possible quality. But, eBay only provides a platform for online trading to take
place, doesnt take possession of the items being sold, this reduces inventory management
costs. Technology Development EBay operated as an online venue for buyers and sellers;
technology is an important source of competitive advantage. eBay uses online option to
innovate, to reduce costs and to protect and sustain competitive advantage. This includes
Internet marketing activities, lean manufacturing, Customer Relationship Management
(CRM), and many other technological developments. Human Resource Management (HRM)
Employees are an expensive and vital resource. An organization would manage recruitment
and selection, training and development, and rewards and remuneration. The mission and
objectives of the organization would be driving force behind the HRM strategy. eBays
strategy of developing a community whose members are anonymous, trust among traders still
prevailed, is indeed incredible,

Firm Infrastructure
This activity includes and is driven by corporate or strategic planning. It includes the
Management Information System (MIS) and other mechanisms for planning and control such
as the accounting department. But eBay has created an online marketplace, it operated much
like a newspaper-classified section, it facilitated person-to-person transactions but did not
take possession of the items being sold.

2.5 SUPPLY CHAIN PROCESS

Shweta Start numbering from here

Shweta add here

Red heading 2 like 2.1, 2.2
Blue: heading 3 like 2.1.1 , 2.1.2

Supply chain: For sellers on ebay

PowerShip is eBay Indias intermediated Shipping program. PowerShip was launched in June
2012 and is a preferred shipping solution of Sellers on eBay India. Items bought on eBay
India using PaisaPay and enabled for PowerShip can be shipped through the intermediated
solution to buyers in India.
To enable PowerShip as a service, sellers are required to complete one time registration and
activation for each seller account on eBay.in. Once activated, all our sellers are required to do
is package the item in eBay packing material and hand over the package to the assigned
Logistic Service Provider at the time of Pick-up. PowerShip is fully integrated with PaisaPay

and allows sellers to view PowerShip assigned orders, assigned Logistics Service Provider
and print labels online.
PowerShip includes Air mode, enabling quicker delivery of items to Buyers, Surface mode to
manage volumetric and large size shipments and enhanced Cash On Delivery enabled
through BlueDart in addition to Aramex for buyers who wish to pay for items on delivery.
PowerShip sellers can avail special courier rates and ship to over 10,000 plus locations across
2500 cities and towns in India
Advantages

Great rates from top LSPs companies in India and hence building loyalty with
consumers through a consistent experience

Provision of eBay branded packing bags and tapes

Automated and accurate shipping and tracking information through predetermined

AWBs from LSPs

FastShip discount of 0.5% on PaisaPay Fees upto Rs. 50 for items dispatched within
same or next day of order confirmation (as per the pickup confirmed by Logistic
Service Provider).

Reducing item transit times to buyers resulting in a delightful shopping experience on

eBay.

No commitment on volume / number of shipments to LSPs

Most trusted services from LSPs

Shipping fees debited from PaisaPay balance before remittance

Dedicated Customer Service for PowerShip

Provision of receiving PowerShip and Non PowerShip enabled orders

All in all, a great peace of mind and ease of managing business!

Figure: supply chain of sellers on ebay

Step 1 You sign-up for PowerShip by accepting the Terms & Conditions of the PowerShip
Program. Once enabled, you will be able to offer PowerShip on either all your listings or just
for certain listings. You will also be able to offer items through Cash On Delivery.
Step 2 During checkout eBay will verify the PIN code serviceability and consequently
allocate a Logistic Service Provider to service the order.
Step 3 The transaction will appear in your PaisaPay account. PowerShip transaction will
indicate the Logistic Service Provider assigned. When the package is ready to be delivered,
click on Mark Ready to Ship. This will intimate the Logistic Service Provider to pick the
item from the address indicated in the Registration section of your eBay account.
Step 4 eBay will coordinate with the Logistic Service Provider to track the item. During
pickup, LP will review the documents you need to provide which includes Order Statement,
Invoice, Declaration letter and Manifest. You may be required to provide 3 copies of invoice.
Please ensure collecting a counter signed Manifest from the personnel after submitting your
consignments.
Step 5 Item will be scanned and weighed at the LP branch and this information will be
updated to your My PaisaPay account the following morning. Sellers will no longer be
required to manually enter the AWB number in their account.

Step 6 The consignment will be scanned using the barcoded AWB number and dispatched.
The order will be moved to PowerShip Shipped Status on My PaisaPay. Buyers will receive
an SMS indicating that the item is shipped.
Step 7 Consignment tracking will be automatically updated on eBay until Delivery. Upon
Delivery and after further checks, remittance will be released to you. Sellers under ER will
receive their remittance after the item is picked up and scanned.
With this launch, COD will be a part of the PowerShip program. Only those sellers enabled
for PowerShip will be able to offer COD in their listings

Some other logistic concepts:

EBay and Ethical sourcing
In September 2008, EBay, the online auction giant, launched an ethically sourced online
marketplace for selling products that have a positive impact on people and the planet. The
project is a collaboration of eBay and World of Good. It includes a nonprofit development
organization along with a corporate arm called World of Good Inc.

Socially responsible shopping Tailored shopping impact

The online marketplace aims to give socially responsible shoppers a chance to buy great
products that also help mankind and the planet. Customers can also customize their
shopping impact (regardless of the social causes most important to them) by shopping for
items with different attributes spanning 15 categories. Items are broadly classified as People
PositiveTM and Eco PositiveTM.

Products for sale Organic, made from recycled material and animal friendly

Sellers at the website (www.worldofgood.com) are verified by third parties known as trust
providers. The goal is to meet a core set of ethical and environmental standards. Items for
sale on the site include clothing, jewelry, coffee, tea, pottery, accessories and home decor
items. These items are organic (e.g. organic clothing) and made from recycled materials.

Beauty products sold on the site are animal-friendly and some products are made by artisans
from developing countries. Even food items are offered on the site.

Figure:Sourcng & selling of ebay items; Source: http://ebay.com/salesreports

Ethical consumer experiences with Unique GoodprintTM labeling system

A labeling system known as GoodprintTM gives each product on the site a unique nutritional
label. This helps customers easily identify the positive social and environmental impact on
each buy/purchase they make. They can assess if their purchase aids: economic
empowerment, helps preservation of animal species, conserves energy, or is made of
recycled, organic and/or sustainable materials.

Facilitating ongoing dialogue between buyers and sellers

The marketplace, an online community, not only helps bring together products, people, and
organizations all in one place but also facilitates a dialogue (about ethical shopping) between
them and Trust Providers via related blogs, articles, and forums.

Inventory Management
Selling on eBay presents some unique inventory management challenges, including the
following:

eBay can hold your money.

If a customer files a claim (legitimate or not) about their transaction with you, eBay can hold
the customers money, pending investigation. This means you may not have the cash to pay a
supplier for new inventory or to operate other parts of your business.

Mismanaged inventory has bigger implications on eBay.

Sometimes one sell an item you dont have in stock. It happens. (It doesnt have to). Then,
you have to to explain to your customer that theyll either be refunded or theyll have to wait
for the item to come back in stock.On your webstore, this scenario isnt ideal, but its
relatively isolated. You may upset the customer. You may lose the customer. They may leave
a nasty review on your site or someone elses. But, their disappointment doesnt really
impact your webstores ability to sell in the future.If this unhappy customer came from eBay,
the damage is more lasting. eBay has always focused on seller integrity by taking ratings
seriously. Even a few negative ratings can get you flagged and can cause you to lose your
top seller rating. Again, eBay hold on to your money.

Margins can fluctuate

If one is selling on eBay, it may not always be for a static price. (It is an auction site after all.)
Even if you sell at fixed prices, you may need to adjust them periodically to be competitive.It
means your margins can fluctuate, so you need to watch the cost of your inventory a bit
closer.
Overcoming Inventory Management Challenges
Fortunately, there are some strategies you can use to overcome some of the inventory
management challenges that eBay presents.

eBay Listing Software

Software like Turbo Lister or SixBit can help you streamline how you manage eBay listings.
Turbo Lister gives you the ability to manage your eBay listings more efficiently. Its more
about listing than it is managing the transaction of a sale. But, making this part of you
business easier will free you up to manage inventory more effectively. And, Turbo Lister is
free. SixBit starts at $20/month, but gives you a more feature-rich eBay management
experience. It actually helps you manage your inventory, shipping, and customer
communication.

eBays Large Merchant Services API

Using the API, you could integrate your eBay listing information into your customer and
supply chain management systems (probably an ERP). With integrated data you can set
manual and programmed business rules about how to handle inventory issues. For example:
dont list an item that you wont have in stock for two weeks. One need to have the resources,
technical competency, and reason to invest that much money into this integration. Its
probably only a realistic option for big companiesthink big box retailers. Most smaller and
even mid-sized retailers, wont see a return on their investment into this integration.
Order Handling and Warehousing
Warehouse workers at eBay Enterprise, a King of Prussia, Pa.-based retail order management
and fulfillment provider, used to employ radio frequency (RF) handheld units for picking and
packing orders, but found them counterproductive. With help from a voice-enabled
technology solutions provider and data collection hardware manufacturer, eBay Enterprise
implemented a hands-free, voice-based system to increase order accuracy and improve
fulfillment efficiency to shorten delivery times.
eBay Enterprise provides distribution, warehouse management, inbound and outbound
logistics, and returns processing from seven campuses across the United States, Canada, and
Europe, and serves more than 60 countries around the world.

For many years, eBay Enterprise used RF technology to assist with picking and packing
orders in the warehouse. But employees had to hold the RF units when they needed to operate
in a hands-free mode

Figure: Inventory Management done by software used by ebay

Zoning Out
To ease adoption, eBay Enterprise took advantage of the fact that its warehouse operates in
12 separate work zones. "We phased in the voice-based technology by zones," says
Adamchik. Breaking the project into individual implementations by zone allowed project tem
members to distribute the new technology incrementally, and to ensure it was embedded and
running smoothly in one zone before the team moved on. This approach gave eBay Enterprise
more control over troubleshooting technology and operational workflow issues, as well as
ensuring that employees were being trained and acclimating to the new processes.
Warehousing And Distribution
eBay has rapidly become accepted as one of the market leading areas where private or small
businesses are able to sell a wide range of products and services direct to consumers.

In addition to eBay, other sites such as oztion, auctionbidz, bidmate, bidsell and many others
are rapidly growing and are allowing the launch and increased growth of many small
businesses.
With this surge in popularity however, many businesses commence trading without real
thoughts and planning to the Logistics Solution. Issues such as excess or shortage of storage
space, limited capacity, fixed labour costs, high transport costs, manual processing, reporting
and many more can result in a viable product or business no longer being able to trade, or
become un-competitive due to the associated costs.
Order Track and Trace
As a global e-commerce platform, eBay connects buyers and sellers around the world. Our
community of users individual consumers, sellers and SMEs is broadly reliant upon
shipping services to ensure smooth transactions and a great shopping experience. eBay
estimates that sellers on its European platforms spent more than 1 billion in 2009 on
shipping goods. Connecting our users is also about providing meaningful tools that add value
to their selling experience. First of all, sellers need convenience: the integration of the
shipping aspect in the earliest stage of the selling process is key. eBay will soon be rolling out
exclusive features that will both improve users choice and foster competition between
shipping carriers. However, we want to go further than that. For users willing to sell crossborder, exporting is much more complex than domestic e-commerce. Why? Because of
factors like time zones, language barriers, greater distances and cultural differences, all of
which are generally not an issue in domestic trading. All these factors lead to uncertainty that
inhibits the development of intra- EU cross-border e-commerce. Tackling this uncertainty is
vital for realizing a true Single Market. That is why online sellers and buyers also need
certainty through efficient cross-border tracking technologies and services.

Figure: Ebay track order

Ebay same day delivery service

In 2012, eBay started its same-day delivery service, eBay Now shortly after its rival Amazon
announced its same-day delivery service. Initially started in select cities in the US, the eBay
Now shopping application could be downloaded to the users Apple iPhones and iPads. Once
the customer ordered the product, it was delivered within an hour by an eBay valet. On
October 10, 2012, the service was made available to all the residents of San Francisco and
was later extended to various other citiesUnlike Amazon, which threatened the existence of
local retailers, eBay aggregated local individual retailers/mom-and-pop stores/retail chains
and offered them a platform to sell their merchandise with the advantage of same-hour
delivery. While there was a location advantage for eBay, it had to employ couriers to make
individual deliveries. It also faced competition from well established retailers and many startups that imitated its business model. Moreover, operating a same-day delivery service was
fraught with various risks and challenges and could snowball into a logistical nightmare for
eBay.
CRM at Ebay
The moment of truth, when there is an interaction with the customer is exploding, becomes
outsourced and the glamour around Sothebys is under risk, so all the effort to outperform has

to be applied. A 24 hours call center was set up, the education and skills of the assigned
agents is carefully selected, all the communications channels open (web, chat, forums, e-mail,
telephone), a user friendly interface, with a careful web page design, not only the aesthetics
and

appearance,

rather

the

interaction

process

and

flow

through

pages

and

contentsnavigation had to reflect the overarching purpose of the whole enterprise, also the
web page has to reflect the way peoples mind work, organically and associatively, not
hierarchically (like programmers tend to do).

Figure: Ebay customer help & support page

eBays Growth
Unlike Amazon, eBay has been very focused as a service provider. The major variation from
this strategy has been the purchase of Half.com, which is a fixed-price retailing operation.
This is a place where consumers can go to buy new items. In addition, the company recently
acquired Paypal, a leading provider of person-to-person payment services. .eBay has many
other service operations: eBay International. eBay has consciously tried to create a global
marketplace. Even though users from other countries may bid on U.S. auctions, the legal and
financial barriers prevent easy trading. Country-specific sites are seen as the way to overcome
this. As of now, eBay has country-specific sites in Austria, Australia, Canada, France,
Germany, Ireland, Italy, Japan, Korea, New Zealand, Switzerland and the UK. eBay Motos.
In addition to selling used cars online, this site features motorcycles, as well as auto parts.

The company has created a unique trading environment with services such as financing,
inspections, escrow, auto insurance, vehicle shipping, title & registration, and a lemon check.
eBay Stores. eBay Stores expands the marketplace for sellers by allowing them to create
customized shopping destinations.