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Taking on eBay Issues in a Network Economy

Taking on eBay Issues in a Network Economy. Chris Goodwin Sam Graber Matt Grace Michael Nelson. Overview. Introduction eBay Online Auction Portal Concept Establish Positive Feedback Build Trust Revenue Model Discussion. Introduction. Introduction eBay Concept Positive Feedback

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Taking on eBay Issues in a Network Economy

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  1. Taking oneBayIssues in a Network Economy Chris Goodwin Sam Graber Matt Grace Michael Nelson

  2. Overview • Introduction • eBay • Online Auction Portal Concept • Establish Positive Feedback • Build Trust • Revenue Model • Discussion

  3. Introduction • Introduction • eBay • Concept • Positive Feedback • Build Trust • Revenue Model • Discussion • Can ANYONE compete with eBay? • No! • Why not? • Yes! • How do you build a large enough online community in the relatively short amount of time before eBay tries to sink you? • Prey upon eBay’s weaknesses!

  4. Introduction • eBay • Concept • Positive Feedback • Build Trust • Revenue Model • Discussion • Largest, most recognized online auction facility in the world • Monopolistic characteristics • Enormous brand equity • No substantial competition • Essentially unregulated market • Significant economies of scale

  5. (and others) • Introduction • eBay • Concept • Positive Feedback • Build Trust • Revenue Model • Discussion • Chinks in the armor • Reluctance to partner with other auction sites • Cumbersome search engines • Lack of standardized categories • Un-user friendly • Not intuitive • Multiple registration processes across different auction sites

  6. Online Auction Portal - Concept • Introduction • eBay • Concept • Positive Feedback • Build Trust • Revenue Model • Discussion • Build upon eBay’s existing formula for success (extensive online community) • Consolidate so-called “second tier” auction houses under one common “portal” • Pool individual strengths & resources • Together we stand, divided we fall

  7. Online Auction Portal - Concept • Introduction • eBay • Concept • Positive Feedback • Build Trust • Revenue Model • Discussion • Each auction house remains own, independent entity • Become partners, or members, of our online portal service • Include traditional online brick and mortar retailers • Symbiotic relationship • Struggling retailers get online presence and move hard to sell inventory • Users gain additional much desired purchasing options

  8. Online Auction Portal - Concept • Introduction • eBay • Concept • Positive Feedback • Build Trust • Revenue Model • Discussion • Further differentiate by adding ‘Proxy’ service • Search engine scours every online auction site and retailer looking for specified merchandise • Places bid on product • Purchases within specified time period • Add small service charge for service

  9. Establish Positive Feedback • Introduction • eBay • Concept • Positive Feedback • Build Trust • Revenue Model • Discussion • In order to compete with eBay, it is essential to develop positive feedback • Establish positive feedback by: • Improving buying & selling experience • Examples: • Standardize search for products – include detailed search form • One-time registration process across all member auction sites

  10. Build Trust • Introduction • eBay • Concept • Positive Feedback • Build Trust • Revenue Model • Discussion • It is imperative for portal service to build trust among buyers & sellers • Allow sellers to carryover existing reputation ratings from other auction sites (including eBay) • Brick and mortar retailers would automatically get highest ratings • Partner with reputable e-commerce purchasing service (ie. Paypal)

  11. Revenue Model • Introduction • eBay • Concept • Positive Feedback • Build Trust • Revenue Model • Discussion • As most dot.coms have realized, it IS important to produce revenues! • Charge sliding scale commissions • 1%-3% for any items sold through our service • Proxy service: 5% added surcharge to purchases made through proxy service • Banner Advertisements (Playboy.com charges 10K for advertising space) • Substantial portion of initial VC money used on media advertising • Must generate site awareness in order to compete

  12. Discussion • Introduction • eBay • Concept • Positive Feedback • Build Trust • Revenue Model • Discussion • Why wouldn’t this work? • Win/Win for everyone (except eBay) • Is media blitz enough to generate site awareness? (ie. WingspanBank.com) • Can consolidated online auction services actually compete with eBay?

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