Online Auctions

Ebay’s business model is acting as an agent for the seller, giving them somewhere to post an item for sale. Ebay then makes commission of the item sold by the seller and charging a posting fee to the seller. It has been successful because while companies are using it to sell products, people are also using it to sell products without a huge amount of red tape and paper work to go through.

Yahoo! and Amazon.com do not offer auctions anymore as they couldn’t break into the market place. It seems with research that Ebay made a big deal about how easy it is to sell on Ebay, whereas Yahoo! concentrated on how easy it was to buy on Yahoo! and never really made a convincing argument for why a consumer should use it over Ebay. Amazon.com shocked Ebay a little bit with the competitive nature of sellers trying to drop their prices so the buyer will pick them as well as having a greater known buy-it-now component rather than having to wait like a traditional auction. This has fallen away to a certain extent as Ebay beame more adapted to the new culture of must having a product now.

Ebay allows

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