Ebay Business - Management the Essay

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In October 2009, "eBay announced layoffs of 10% of its 16,000 workers" (Fowler 2009, p.1).

Because eBay makes more money from expensive transactions, it is shifting its 'common standing' or overall plan to focus more on large sellers, rather than small, quirkier, or independent businesses. "Mr. Donahoe is shifting the site's emphasis away from auctions and toward fixed-price listings. The moves have divided sellers, some of whom complain that big merchants now have an edge. Some longtime sellers, including those with unusual inventory that draws people to the site, are giving up on eBay and moving their business elsewhere. Of the top 100 U.S. eBay sellers in January 2008, 16% were no longer active in the first quarter of this year" (Fowler 2009, p.1). However, the focus on larger sellers, Donahoe believes, will allow eBay to shift to a model customers increasingly prefer, with "fixed price, quick service and free shipping" -- a model associated with larger retailers (Fowler 2009, p.1).

eBay's long-term plan to encourage higher volumes of sales, and high-volume sellers is manifest in its reduction in the charge to post items and increase in commission sales -- a large retailer can thus sell many, many items for a lower cost than before, while smaller 'one-off' sellers collect less money. Smaller sellers protest that this is against the ethos of the company; eBay says that this gives buyers more variety, as there is less risk of a loss when a seller posts many items.

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eBay has also modified its presentation on its website. "Before, the first items to pop up were those for which an auction was about to end. Sellers developed ways to game that system, such as trying to make their auctions expire at times of the week when buyers were most active… [The new formula] takes into account price and how well an item's seller ranks in customer satisfaction. The change meant that highly rated merchants got more exposure on the site. eBay also offered fee discounts to the best-rated sellers" (Fowler 2009).

Smaller users protested that this forced them to expend more resources soliciting their customers and asking them to be timely and positive. Additionally, eBay, in its continued emphasis on larger sellers and satisfying buyers deleted the 'rate the buyer' function. Small sellers could no longer suspend transactions from individuals who did not pay, while larger buyers did not care as much, given that their revenue was dependant upon bulk sales and they often did not check seller ratings.

Overall, eBay has embraced a sweeping strategic plan, with a clear focus on a leaner, more profitable, and more corporate future. Although some of its core sellers may bemoan the shift in tone, the market pressures created by other large auction-style sites like Amazon and smaller crafts-related portals like Etsy have forced eBay to craft a more coherent market niche for itself, in its desire to remain profitable......

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