Ebay the Online Auction

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Consumers want a way to sell their items online at the highest paying price possible, all the while doing it efficiently, safely, and quickly. EBay influenced the online consumer market by doing just that – creating the online auction. They discovered the value of creating the means to bring consumers to the average persons front door. Consumers value the ability to easily sell items online with little to no risk. By acting as the moderator, eBay is able to make sure the transactions are held on both ends. With the involvement of PayPal, transactions can be insured and held accountable. One of the issues that arise, are the inept ability to monitor transactions based on their content and/or legality (Brickley, Smith & Zimmerman, 2009, p. 334).

The contracting problem between buyer and seller would be fraudulency, misrepresentation and/or misinformation. From my knowledge, there have been reports of sellers selling visuals of items based on their descriptions rather than the actual items. These contracting problems can easily be avoided by researching buyer/seller feedback, enrolling in their insurance policies, and continuous buyer/seller communication in efforts to avoid any transactions from being upheld. There are many costs associated with fulfilling these obligations on eBay’s part. Content management, web administration, customer service, legal references, and many more; all have a helping hand and cost in providing this created value. Ebay is neither overinvesting nor underinvesting in contracting problems. With the amount of demand and resources that Ebay has at it’s calling, every aspect of the corporate business plan is carefully looked at. Online business is a very difficult business to keep current. Hackers, attackers and even the midnight crackers will always have their way in some form shape or another. It is very difficult to guard you assets from attacks such as those, but if you regulate a good monitoring system you can minimize the overall damage on profitability, consumer satisfaction, and every other party involved.


Brickley, J., Smith, C., & Zimmerman, J. (2009). Managerial Economics & Organizational Architecture. (5th ed., p. 38). New York: McGraw-Hill Irwin.