Analysis of online auction site ebid

EBid is an online auction website, which was cofounded by Mark Wilkinson and Gary Sewell in December 1998 in UK. They did not take the normal approach of putting huge amount of capital initially to establish the business, they built their site backwards by building a self sufficient auction site which would attract and retain customers. The initial version of EBid went on air in January 1999.

EBid now operates in more than 20 countries including UK, USA, Canada, Australia, Austria, Belgium, India Italy, France, Germany, Spain, Netherland, Denmark, Norway, New Zealand, Portugal, Sweden, Singapore and South Africa. It lists to buyers in other 100 countries as well.

EBid has its own online payment service PPPay, which deals in paying Euros and Pounds Shillings. But this is not restrictive as EBid also accepts payment through PayPal and Google Checkout. PPPay.com is simple and comparatively secure which makes EBid a safe marketplaces on the virtual world for everyone including individuals, small and big companies equally.

The closest competitor of EBid is Ebay, OnlineAuctions, Oztion etc. In a recent online auction review EBid stood second, closing behind EBay.

EBid is often termed as the best Ebay alternative.

EBid has numerous auction goods in more than 3,500 product categories, which includes music, collectibles, clothing, jewellery, electronics, games and antiques etc. EBid’s search capability lets its customers find items in their own region or check globally the choice of items they are interested in.

There is a “Wanted” feature which allows buyers to post a free advertisement and list the acceptable price. Sellers can then bid for the same with the given requirements.

Membership level

EBid offers three membership levels to their customers.

Buyers: There is no membership fee. It is free of cost to join EBid and buy there.

Seller: It is free to join and list on the auction. And if the product put on the auction is sold off, a minimal of 3% of the final value is charged. Sellers are required to give their credit or debit card verification for safety purposes.

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Seller Plus: It is the membership based on subscription which charges the seller with a recurring fee every 73090 days or 365 days. EBid also offers a lifetime membership which is a onetime charge of £49.99. Seller Plus members can open five shops for no charge. They can also list a free auction of which the final fee is none. And for gallery type auction 2% fee is charged.

Seller Plus+ members can use a type of software called the Bulk lister spread sheet which list many items at the same time, also there is software called as Ninja Lister in which you can use EBid’s cross-platform.

Registration and upgrading

A registration form is to be filled up by the users to register as buyers at EBid. For upgrading to SELLER or SELLER+ a security subscription is to be purchased.

Upgrade Fees

SELLER : Rs. 0.00

SELLER+ :

7 Day Rs. 59.00

30 Day Rs. 210.00

90 Day Rs. 510.00

365 Day Rs. 1800.00

Lifetime Rs. 2000.00

(Refer to appendix Figure 1)

Buddy programs and affiliations

An affiliate program is a system in which a customer advertise EBid at their emails or their websites etc, and then if someone joins EBid then it pays the introducer a amount of $2.00 / £1.00. The EBid Buddy Points program is a Loyalty Card system. The customer can earn and accumulate points during his bidding or selling, they can be used everywhere at the site. Once the invited people join 1 point per person is awarded to the customer. If they then upgrade to SELLER another point will be earned, and if they upgrade to Seller+ 2 points will be earned. The buddy points then can be later used in different buddy auctions.

Points are also available via the following trigger points [1] .

Referring a Buddy = 1 points

Buddy SELLER Upgrade = 2 points

Buddy SELLER+ Upgrade = 5 points

Making a Bid Meeting Reserve = 0.5% of reserve price (max 5 points)

Purchasing via Winning Bid = 1.0% of final bid (max 5 points)

Purchasing Using BuyNow = 1.0% of BuyNow price (max 5 points)

Receiving Positive Feedback = 0.5% of final bid OR BuyNow price (max 5 points)

Online Auction Business Model

There are several business models associated with online auction model namely business to consumer (B2C), consumer to consumer (C2C), business to business (B2B), business to government (B2G), and government to public (G2P).

EBid adopts a customer-to-customer business model, as it allows direct interaction of customers. A customer to customer interaction is defined as the interaction of n customers that affects the value, demand and credibility of a desired good. It avoids medalling of a business firm/company etc in between the two customers. In Customer-to-customer markets the website facilitates a platform where customers can sell goods to each other.

EBid has globalised and centralized customer-to-customer trade. The most primal such customer interaction were seen in flea markets, garage sales etc. Online auction sites have given it a new global edge to it. On one single platform buyers and sellers can find the items and transact for the best deal.

Listing an item on EBid is free of cost but they charge a nominal of 3% fee on the final sale price. At the end of an auction, EBid notifies the winning buyer through given e-mail that he has won the auction. It also contact the seller via email to report the winner and the final price of the auction. Then it is upto the buyer and seller how to complete the transaction independently. EBid doesn’t charge buyers any fee to shop and place bids, so it makes money by charging fees from sellers.

Advantages –

The middleman concept is removed. The customers are benefited more by the elimination.

Large number of bidders and sellers – As the online auctions are open to all, many people who have saleable product go online to sell, which increases the number of bidders too.

Time barrier – there is no time constraints as anyone can sell or purchase at any hour of the day.

Due to globalisation people from different countries interact with each other to transact. It offers wider range of products and services.

Price factor – prices at such sites are negotiable and the goods sold are cheaper.

In such business model there is a lot of cost cutting, inevitable cost such as inventory cost, distribution, sales etc are deleted.

Customer Value Proposition

EBid has not kept any buyers fee, this encourages more buyers to participate. Whereas in other auction site there is a minimum buyers fee too. There is no listing fee too, sellers can put the goods up on auction without any charges, and this strategy gets many sellers to get involved. There is a nominal 3% fee charge on final sale value, which is not comparatively much.

The buddy point system makes EBid more interactive and fun to use. EBid provides a lot of incentive such as special bidding by buddy points etc, this lets customer become more enthusiastic.

Revenue Model

As mentioned earlier EBid earns through final sale value that is 3 %. There is another way of EBid earning, it is through their subscription based membership called as SELLER Plus. Not all the auctions are opened for regular seller; there are some which are held only for seller plus members exclusively. EBid charges a fee based on membership validity.

There are some fee charged by EBid from customer who wants to highlight their or customise their bidding. A table of the list of charges have been given below.

Estimated market price of EBid.net is 1,366,632 USD. And its annual revenue for the last year was calculated as 683,316 USD.

(Refer to appendix Figure 2)

(Refer to appendix Figure 3)

(Refer to appendix Figure 4)

Competitors

EBid’s main competitor is online auction giant EBay. Then comes onlineauctions, OZtions, overstock etc.

Ebid is often termed as best ebay alternative.

It has better price options, free bidding, free joining and free shop to boot. It offers English as well as dutch auctions.

EBid has got buddy point system which let users invite more people.

Finding a item in EBid is also not a problem, they have excellent navigation system.

The photo gallery is also of good size and quality.

EBid has an excellent customer support. Their FAQs cover all the major problem faced by the user.

EBid has got easy payment options such as PPPay, PayPal, and google checkout.

EBid has been made google’s official product partner which gives it an edge.

Summary

Ebid is a well established online auction company which is growing at a fast rate. It offers some commendable features like; numerous auctions in over thousands of categories, very powerful search functioning, simple payment options, user friendliness, different range of auction types and no hidden cost.

There are some improvisations needed in the field of their promotional activities. EBid can generate better revenues if they start selling their web space for advertisements and it will help them grow their network. Their “wanted” section is still not well defined and should be made more visible to the customers by more promotions.

Figure : Account types

Figure : Traffic Rank and number of visitors.

Figure : Revenue system

Figure : Unique visitor count