eBay Business Strategies
The business success of eBay is definitely worth studying and its strategies and keys to success unveiled for entrepreneurs and business managers to adopt in their own businesses. The reason is not far fetched. Here is a start-up business worth only a couple of millions of dollars becoming a multi-billion dollar enterprise just in three years.
Having a Clear Purpose
To succeed in business, you need to know exactly what you want to offer, to who, and how. Your purpose must be clearly defined, else you will be wasting resources, time, and energy chasing several things at the same time and achieving nothing in the end.
The reason for creating eBay was well stated: to provide an online auctioning platform for sellers and buyers to connect and trade. By having its purpose in business clearly defined enabled eBay to remain focused in giving its users the best service they can get.
Providing Uncommon Value
The extent of success you can achieve in business depends on the value you are providing your market. The more unique the value you are offering is, the more valuable it will be perceived, and the more people will want to try it out.
eBay’s dominance of the online auctioning industry was made possible by the unique value it brought to the auctioning industry, by being the first to offer auctioning platform on the Internet. Before then, auctions were done in a physical place with both sellers and buyers meeting.
By using eBay, anyone could list their items or place a bid for whatever they wanted from the comfort of their homes. eBay’s platform gave users ease and convenience in participating in auction sales either as seller or buyer, no wonder, by 1998 500,000 users had already joined eBay community.
Choosing Profitable Business Model
Don’t jump into any business until you are sure it will be profitable. You may have to come up with better ways of operating at reduced cost, and selling more, so that you can make good profit.
eBay was set out to be profitable from the beginning. Its business model is simple: to provide a platform for sellers and buyers to trade, and to collect a fee for the service. It is not involved in inventory management and distribution of items sold and bought. This makes its cost of operation low and controllable, and its business highly profitable.
Getting the Best Management Team
As soon as you can afford to, you should employ professional business managers to run your business, instead of trying to do it yourself without adequate business management skill and experience.
eBay’s growth and success is largely attributed to the strong management team that has led it. The company’s revenue in 1998 when Meg Whiteman took over as President and CEO was $4.7 million, and by 2008, ten years on the job, it had risen to $7.7 billion yearly, with hundreds of millions of registered users.
Understanding Your Industry’s Critical Success Factors
There are always certain things that determine business success in any industry. You should be mindful of those in your industry and work to eliminate or develop them as the case may be.
For eBay, building a huge community of users and gaining their trust are critical to success in the online auctioning industry. The more registered users you have, the more other prospective users perceive your platform as being credible for them to also join.
Also, the stronger you have built trust in your business, the freer people are to do business with you.
Realizing these critical factors earlier in business, eBay has continued to strive to build its community of users, and evolved strategies to gain their trust. This has made it difficult for competitors like Yahoo and Amazon to eat into its 80 percent market share.
Read eBay’s Success Story here.
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