Comparison Of E-commerce Business Models Of Amazon Inc. And E-Bay Inc.

Why both these belong to the e-commerce business model

A. E-commerce business model

E-commerce business model is a broad category and it covers both the aspects i.e. business to business (B2B) and business to consumer (B2C) models. In B2C, company sells its products and services directly to its customers whereas B2B business model describe the transactions made between one business enterprises to another. For example: Manufacturer to wholesalers. This report will focus over B2C model and for the same; two large multinational corporations have been chosen i.e. Amazon Inc. and e-Bay Inc.

URL for Amazon Inc.: https://www.amazon.com/

                                                

B.Why both these belongs to e-commerce business model

Amazon Inc. provides various products and services to individuals across the globe. It acts as an online retailer for consumers and for businesses; it acts as mediator between consumers and businesses. Consumers have welcomed online business idea introduced by Amazon Inc. as this has reduced their efforts to go out for shopping. With one mouse click, consumers could purchase from books and music to furniture and clothing. Product offering have been enlarged by Amazon in recent years whereas in the initial periods, organization was dealing in only books. The business which is running virtually without making a physical presence for customers in relation with purchase and sell of goods are known as e-commerce businesses. Since 1994, Amazon is fulfilling demands of its consumers by providing varieties of products and services over internet (Amazon 2018).

Amazon crafted a new business model in 1990s for internet entrepreneurs by using Web as a platform for transacting. This helped the consumers to replace their physical presence with just a mouse click and Amazon created e-commerce business model for generating massive profits by selling varieties of products over internet. Amazon has adopted business to consumer (B2C) model as it directly deals with consumers. This made the Amazon behemoth in e-commerce industry. B2C model is an effective model because it avoids unnecessary intermediators’ such as wholesalers, retailers, etc. cost (Zott, Amit and Massa 2011, 1019-1042).

e-Bay is another giant player of online retailing industry. It was founded in 1995 just after one year of Amazon’s introduction in this industry. e-Bay facilitates both consumers as well as businesses on their website. It is operating in more than 30 countries across the globe (eBay 2018). e-Bay is direct competition to Amazon because they both have gained appropriate experience in online retail industry. e-Bay has adopted push strategy to expand its market share in the global online industry. Online shopping procedure is quite similar to the brick and mortar process except the physical presence. Consumers could choose products and services as per their requirement from the available products. Online shopping websites acts as the digital shopping mall or catalogue which attracts the consumers to purchase anytime from anywhere as online shopping websites never gets closed, time limit does not exists for shopping (Chiu, et. al. 2014, 85-114).

Principal goals

Any company dealing over internet is following e-commerce business model and e-Bay is also following this model and operating as B2B as well as B2C. e-Bay invites both consumers and businesses to purchase from their website and this has been done to expand the customer base, revenues, sales, market share, etc. Ultimately, it will lead the organization to gain desired outcomes such as sufficient profits along with the opportunities to acquire leading position in the e-commerce business industry (Turban, Sharda and Delen 2011).

C.Principal goals

Primary principal goals of Amazon Inc. is to fulfil its target audience’s demand as well as to make their experience unique and satisfied so that in future consumers give preference to online shopping over physical shopping. In relation with this, organization has expanded its product offerings. Initially, organization started its business in a garage and engaged in selling books and later on, the garage was converted into warehouse and product offering was enlarged by selling music CDs, etc. Amazon has adopted customer centric approach in order to enhance its market share in the online retailing industry as well as to enhance reliability amongst the target audience towards the organization. Developing customer relationships, expansion of products and services, enhance profitability, etc. are certain other primary goals and objectives of Amazon.com. Apart from this, major goals in relation with their website is to provide one stop for all consumer query resolution, provide loyalty benefits for regular customers and also offers customised deals and offers along with offering contemporary products (Barnes and Hunt 2013).

e-Bay deals in both fresh as well as used items and their mission is to be the favourite destination for its target audience for discovering the unique selection and great value. They promote small sellers and provide them a platform to grow their businesses. Primary goals of e-Bay website are to provide better experience to its customers in relevance with selection of the required product easily from the vast range of products and services. Apart from this, e-Baay’s primary goals in relation with their website is to provide enriched web experience to its customers, showcases the relevant products as per customer’s demand, providing customer support, etc. (Veit, et. al. 2014, 45-53). 

D.Five-point semantic differential scale

1	2	3	4	5
Very Poor	Poor	Inapplicable/Average	Good	Very Good

With the help of this table, services and products offered by Amazon and e-Bay will be scaled from 1 to 5 using 22 attributes.

Sr. No.	Attributes	Amazon Inc.	e-Bay Inc.	Comments
1.	How does the website URL relate to the business name?	5	5	Amazon’s and e-Bay’s URL are based on their company names, hence, both score the same in this criteria.
2.	How easily is the website found using general internet search engines (e.g. Google, Ask, AltaVista, Bing, Yahoo!)?	5	5	Both the companies are easily found on general search engines available in the market (Zhang, et. al. 2011, 192-200).
3.	Does the website give me all the organisational information a user could reasonably require?	5	4	Yes, both companies’ website is quite effective in order to provide all sort of information. e-bay’s website is bit complex but still it provides all information.
4.	Are requirements to provide a user’s (personal or sensitive) information appropriate?	5	5	Adequate measures have been adopted to provide appropriate information to its users (Rodríguez-Ardura and Meseguer-Artola 2010, 209-227).
5.	How well does the website reassure users about the security and use of their information?	5	5	Appropriate measures have been taken by both the companies to ensure the safety and security of customer’s data.
6.	How well does the website foster user trust in the organisation?	5	4	Amazon’s website clearly showcases the all the policies related to return and refund of the product which helps the users to trust over organization whereas e-Bay’s website is bit complex, hence, return and refund related policies are not clearly visible (Huang, et. al. 2010, 348-359).
7.	How well does the website address legal issues associated with use of the website or engagement in transactions?	5	5	In both the websites, it is clearly mentioned that if the transactions are being made for other purposes rather selling and consuming, then organization has full right to take strict as well as legal actions against the users (Hajli 2012, 77-97).
8.	How well does the website provide for the accessibility needs of users?	5	5	Before placing an order, both the websites asks for user id and password to ensure the originality of the customer.
9.	How well does the website address the language or cultural needs of users?	5	4	Amazon is operating in various parts of the globe and they have provided the language option on their website as per the consumer preferences. While, few language options are available on e-Bay’s websites.
10.	Does the website contain all the product information that a user could reasonably require?	5	3	Amazon’s website provide every relevant information about the product whereas e-bay’s website fails to do so every product and service.
11.	Does the website allow all the customisation (user-managed features) that a user could reasonably expect?	5	4	Amazon offers customisation option to its users in every product while e-Bay does not provide customisation option every time.
12.	How well does the website personalise the experience for users?	5	5	Both the websites welcomes their users by displaying their names and by showcasing exclusive deals and offers. This develops a personal touch with the customers.
13.	Does the website identify sufficient channels for user service/support?	5	4	Amazon provides call, chat as well as email option to contact the organization regarding any information while e-Bay provides 1-2 support channels.
14.	How easy is it to find any information on the website about the organisation, their products or services?	5	3	Amazon is quite convenient website to find products and services. They have provided various options to search the required products and services while e-Bay take bit longer time in order to display the search results for customer.
15.	How easy is the information on the website to read (i.e. is provided information in appropriate language and with sufficient detail for most users)?	5	5	Both the companies provide option to its users to change the language as per the country for better understanding. Information regarding products and services are also sufficient on both the sites.
16.	Is the website easy to navigate (i.e. move through the website to find information, products, or services, and engage in transactions with the organisation)?	5	5	Yes, new page can be accessed while transacting or searching over other page.
17.	How appropriate are the website aesthetics (e.g. use of layout, colours, imagery, fonts, etc) for the target audience?	5	4	Amazon uses the layout to attract its target audience and that layout changes time to time, country to country, occasion to occasion. E-Bay also does the same.
18.	How well does the website foster community among users?	5	5	There is an option available at both the sites in relevance with the reviews over products by community members. This influences buyer’s purchase decision.
19.	How quickly does the website load into your browser and do all website features, links and embedded objects (eg: media files or applets) work as intended?	5	3	Amazon’s website takes approximately 3 seconds to load the whole page while e-Bay takes bit longer time. (On the basis of average speed of internet).
20.	How well does the website support different web-browsers or platforms (e.g. mobile devices)?	5	3	e-Bay’s website take longer time to load over mobile devices while Amazon’s website could easily be operated over any of the browser with average internet speed.
21.	Does the website provide a sufficient range of payment options as could be reasonably expected?	5	3	Generally online retailing websites provides various payment options such as cash on delivery, debit card, credit card, wallet payment, net banking, etc. Amongst these options, e-Bay does not provide cash on delivery in some areas.
22.	Does the website provide a sufficient range of delivery options as could be reasonably expected?	5	3	Amazon has recently launched prime delivery option, fast delivery option along with general delivery options. While e-Bay only offers fast delivery option in some areas only along with general delivery options.

Five-point semantic differential scale

E.Comparison amongst eBay and Amazon

It can be said that Amazon is much bigger player in the e-commerce industry in comparison with the eBay. This can be evaluated by the market area covered by both the companies and on the basis of the product offerings. Amazon serves millions of products in more than 188 countries with number of registered offices in 12 countries across the globe. Though, eBay deals in both fresh as well as used products, but still, Amazon has acquired the leading position in the global e-commerce industry. Apart from this, Amazon’s website is more useful, authentic and reliable in terms of product quality, varieties of products offered to the consumers, etc. Whereas, eBay had also developed trust amongst the target audience but in some parts of the globe however, Amazon has developed its reliable image amongst the target audience in all markets in the overseas market where they operate.

Business to consumer is a business model and under this model, transactions take places between company and customers directly. In this model, customers purchase products from company for consumption purpose and they are the end user of purchased product or service. Apart from this, another business model exists i.e. business to business under which company sells its products to another company with the motive of producing finished goods, etc. (Teece 2010, 172-194). Under this report, comparison will be made between Amazon Inc. and eBay Inc. Both the companies are part of e-commerce business model and directly deal with consumers. There is no intermediator exists between these companies and consumers. They sell their products and services over internet which helps the customers to purchase products and services as per their requirement from anywhere anytime (Laudon and Traver 2013).

This report will discuss about the e-commerce business activities of Amazon Inc. and eBay Inc. and further, the report will focus over principal goals and objectives of these companies. The last part of the report will include comparison amongst these companies on the basis of rating and reviews provided by customers with regards to organizational services.

References:

Amazon. 2018. Sustainability. Amazon Inc. Accessed May 2, https://www.aboutamazon.com/?utm_source=gateway&utm_medium=footer.

Barnes, Stuart, and Brian Hunt, eds. E-commerce and v-business. Routledge, 2013.

Chiu, Chao?Min, Eric TG Wang, Yu?Hui Fang, and Hsin?Yi Huang. “Understanding customers’ repeat purchase intentions in B2C e?commerce: the roles of utilitarian value, hedonic value and perceived risk.” Information Systems Journal 24, no. 1 (2014): 85-114.

eBay. 2018. Our Company. eBay Inc. Accessed May 2, https://www.ebayinc.com/our-company/.

Hajli, Mahmood. “An integrated model for e-commerce adoption at the customer level with the impact of social commerce.” International Journal of Information Science and Management (IJISM) (2012): 77-97.

Huang, Chun-Che, Wen-Yau Liang, Yu-Hsin Lai, and Yin-Chen Lin. “The agent-based negotiation process for B2C e-commerce.” Expert Systems with Applications 37, no. 1 (2010): 348-359.

Laudon, Kenneth C., and Carol Guercio Traver. E-commerce. Pearson, 2013.

Rodríguez-Ardura, Inma, and Antoni Meseguer-Artola. “Toward a longitudinal model of e-commerce: Environmental, Technological, and Organizational Drivers of B2C Adoption.” The Information Society 26, no. 3 (2010): 209-227.

Teece, David J. “Business models, business strategy and innovation.” Long range planning 43, no. 2-3 (2010): 172-194.

Turban, Efraim, Ramesh Sharda, and Dursun Delen. Decision support and business intelligence systems. Pearson Education India, 2011.

Veit, Daniel, Eric Clemons, Alexander Benlian, Peter Buxmann, Thomas Hess, Dennis Kundisch, Jan Marco Leimeister, Peter Loos, and Martin Spann. “Business models.” Business & Information Systems Engineering 6, no. 1 (2014): 45-53.

Zhang, Yixiang, Yulin Fang, Kwok-Kee Wei, Elaine Ramsey, Patrick McCole, and Huaping Chen. “Repurchase intention in B2C e-commerce—A relationship quality perspective.” Information & Management 48, no. 6 (2011): 192-200.

Zott, Christoph, Raphael Amit, and Lorenzo Massa. “The business model: recent developments and future research.” Journal of management 37, no. 4 (2011): 1019-1042.