...Both Amazon and eBay are two most important competitors in the industry of online shopping. A short foreword and the background history of both companies will offer a base for the better understanding of how both the companies stand where they are today and in what manner they manage their respective companies. The financial synopsis will also be provided to provide an understanding of the better investing options in either of the two companies. Introduction When Amazon.com opened for business on July 16, 1995, it was nothing more than a few people packing and shipping boxes of books from a two-car garage in Bellevue, Wash. Jeff Bezos, Amazon founder and CEO, had left New York City for the Pacific Northwest, using some of his time on the road to write the company's business plan. Books were packed on a table made out of an extra door they found lying in the new home — a practice the company continues today in spirit by making many of the office's desks out of doors. Now, on its 15th anniversary, Amazon can raise a toast to being one of the largest online retailers in the world, selling everything from tubas and golf carts to dishwashers and diapers. On the other hand in September, 1995, 28-year-old software developer Pierre Omidyar, who had previously worked with Claris developing software for Apple computers, sat down to write the code that would eventually evolve into what we know as eBay today. Originally called AuctionWeb and hosted on the same server as Pierre's page...
Words: 3367 - Pages: 14
...amaxonCase Assignment for eBay and Amazon (Group 7 will present this case in class on November 7) Case Questions: 1. 2. 3. 4. What are the key drivers of profitability in eBay’s business model? What are the key drivers of profitability in Amazon’s retail business model? How does its retail business model interact with that of eBay? As it shifted to a retail and platform business model, how successful was Amazon in overcoming barriers to entry in the third-party seller market? What would you recommend eBay going forward, and why? Requirements: For Each Individual Student 1. 2. 3. 4. Read the case material carefully and briefly address the above questions in your case report. Limit your case report within TWO pages. Case report must be written in English. Submission deadline for case report is 2pm, November 6 (Tuesday) For Group 7 1. 2. Submission deadline for case presentation PowerPoint is 11pm, November 6 (Tuesday) – only one copy need to be submitted Limit your presentation to 20 minutes (including Q&A) Note: Each student in Group 7 still needs to submit his/her individual case report separately. Marking Criteria for Individual Case Report (total 2 points in your final grade): 1. 2. 3. 4. On-time submission with satisfactory quality – 1 point On-time submission with good discussions – 1.5 point On-time submission with excellent insights – 2 points Late submission without justifiable reason is not accepted Marking Criteria for Group Case Presentation (total 10 points...
Words: 307 - Pages: 2
...October 25, 2012 EBay and Amazon are two companies who offer online retail. EBay is an auction site; whereas, Amazon is a retail website with various prices set by the different sellers. When you compare the net revenue from the two companies you can see both companies have had positive growth in the net revenue from 2000-2008. Although, EBay has had a positive change in revenue each year, the change in net revenue has been decreasing since 2003. In 2003, EBay had 78.33 percent change in net revenue, but in 2008 it had declined to only 11.33 percent change. Amazon, on the other hand had a spike in annual change in net revenue from 2001 to 2002. Since this spike Amazon’s annual change in net revenue has been in the range of 25-35 percent each year on average. Comparing earnings per share, you see both companies followed a similar trend. EBay and Amazon both rose originally and reached a peak and then both had a huge decline, but then both started increasing again. Amazon went through this pattern before EBay would. Also, when Amazon went through this trend, after their decline, once they started increasing again, their EPS in 2008, was only slightly higher than it’s previous peak in 2004. In contrast, in 2008, EBay’s EPS was almost double from what the previous peak was in 2006. Next, when you compare the share price you will see Amazon is doing much better than EBay. EBay was originally doing well and increasing at a much fast rate than Amazon until 2004, when...
Words: 407 - Pages: 2
...Case study eBay, Inc. And Amazon.com Introduction The case that we present concerns two of the most famous companies in the world: Amazon.com and eBay,Inc.. They have become so ubiquitous that probably there is not a household with a computer and internet connection in the world that hasn’t purchased at least one item from them or visited their websites at least once . In the following paragraphs we endeavor to analyze how these two companies have achieved this worldwide success and how they are defined by all as online giants and colossus. But above all, we will focus on how they differ from each other, what are their strengths and weaknesses, what their business model is and how it has changed over the course of time. We will discuss briefly the history of these two giants and explain how they deal and cope with this ever-changing market and business environment. We will start with the background of these two companies, and then analyze the differences in terms of business models, focusing on financial data, services provided, overall stakeholder value and customers’ perception. Background of eBay EBay was launched by Pierre Omidyar in 1995, and referring to his own words, his purpose was giving “ the power of the market back to individuals, not just large corporations”...and his goal was “pioneer new communities around the world built on commerce, sustained by trust and inspired by opportunities”. It is important for us to underline the words of Omidyar because...
Words: 4922 - Pages: 20
...Amazon versus Ebay Amazon versus Ebay Analyze each company’s history, product / services, major customers, major suppliers, and leadership and provide a synopsis of each company. Seattle based Amazon.com was founded in July, 1994, but it was introduced to the world in June, 1995 by its CEO Jeff Bezos. Bezos who was a hedge fund manager in New York left to head west after coming across a finding that the usage of the internet is growing 2300 percent a month. He came up with a plan to get his own retail business online, and headed to Seattle to begin his dream. He started with only 3 employees working out of a garage. Jeff Bezos was able to get Kleiner Perkins Caulfied & Byers to fund Amazon. Some of Amazon.com products include a variety from books, to CDs, videos, and video games. Amazon product line also includes groceries, supplies for pets, greeting cards, and has auctions. A major supplier for Amazon is Ingram, a book distributor, who is still the provider for 60 percent of the books. Amazon is also allied with sites such as Yahoo, Excite, GeoCities, and Netscape. Amazon.com also has links that can be used for household purchases such as groceries and prescriptions. Bezos leadership is demonstrated by observing his comfortableness when he is around the people he addresses on a regular basis from customers, to investors, and the employees. Other leadership qualities of Bezos include his understanding of e-commerce, being focused, having an entrepreneurial team to back...
Words: 2941 - Pages: 12
...purchasing business. Both sites have their advantages and disadvantages regarding navigation, account set-up, ease of purchasing, and shipping. I have selected 10 books that are of interest to me, and searched for these books on both sites in order to compare the usefulness and buyer experience. Amazon and Ebay are both allow a consumer to sell and buy products using their sites. The main difference between these sites is that Ebay is an auction site, meaning that the seller places the item on auction at a starting price, and after seven days of bidding, the highest bidder “wins” the auction. Amazon’s sellers have a set price on the item. Both sites sell used and new products. Amazon also sells books directly through Amazon.com, and these are always new, but sold at a discounted rate. The following are a list of the books selected for searching on the chosen websites. The prices shown for Ebay were taken from the auctions that were ending the soonest so that the amount would most likely resemble the amount that the item would end up selling for. Most of these prices were taken a few hours or minutes before the auction was ended. Two prices are shown for Amazon: the lowest amount found that private sellers were offering and the list price shown for buying directly from Amazon.com. The prices reflect used and new items and can be found in the chart on the following page. As far as price, both sites are fairly comparable. Ebay’s...
Words: 1312 - Pages: 6
...In the battle of e-commerce with Amazon, eBay has to determine whether it should maintain the existing business model or transform its model and expand into new areas. By analyzing eBay with Porter’s Five Forces Model, I conclude that the most effective way for eBay would be to maintain the existing business model through strengthening its brand identity. The following analysis will provide reasons on why brand identity should be strengthened and how it can be used to improve eBay’s business. Threat of Entry This is an Internet driven service industry, which does not provide for many barriers to entry. The main barriers come from government regulation. The government will not permit some products to be sold in certain states or countries and so any online sites need to make sure they don’t violate those laws. It is also hard to enter a market where safety and brand recognition are this important. People will not purchase items or sell them if they do not think their transaction will be protected. For safety, eBay should ensure and establish sufficient blocks that can prevent someone from selling or buying an item that would violate his or her local government. Even though eBay does not directly buy or sell items, they facilitate the transactions, which could make them liable. Threat of Rivalry Because of low entry barriers, the market is full of competitors. Amazon is just one of the many up and coming competitors that are fighting eBay for a piece of the market. Brand identity...
Words: 746 - Pages: 3
... DVDs, toys, jewelry, beauty products and any other name brand product you can name ("Hoovers: A D&B Company"). Becoming on of the worlds largest online retailer, its best selling products are the Kindle, which is exclusively sold through Amazon ("Amazon.com"). Amazon.com is a great role model and sets unprecedented standards for the Internet industry. Using the SWOL analysis I will describe why Amazon.com has a variety of qualities as well as new goals and achievements that have been done. First beginning with strengths of the business Amazon.com, one of my personal favorites is the ease. I can order anything on my computer with a click of my finger, without having to bother with long lines or inconveniences in the stores. Shipping is fast and efficient also saving the consumer gas and time wasted had they have driven to the store. In addition, anything over $25 has a shipping cost of $0 ("Amazon"). Who can beat that, and most items that you buy will easily be over the $25 limit. Another benefit is you can search Amazon.com for practically any product with competitive prices and shipping companies thus giving the buyer many options for where they would like for their money to go. The biggest and most profitable strength is the Amazon Kindle, an electronic book reader now integrated with Internet and games. Book purchases and other online apps can be purchased through the...
Words: 1289 - Pages: 6
...these two companies ? Ebay With more than 100 million active users globally (as of Q4 2011), eBay is the «world's largest online marketplace», where practically anyone can buy and sell practically anything. Ebay activity is not limited to the sale of used goods. The site has become one of the biggest shopping sites online with a majority of products that are new. You have to be careful with fakes, even if one of theBay's goal is to step up efforts to eliminate these. Their collective impact on e-commerce is staggering: In 2011, the total value of goods sold on eBay was $68.6 billion -- more than $2,100 every second. Payment is typically made electronically through PayPal and then the merchandise is shipped to the buyer. Amazon Amazon.com is an American e-commerce company based in Seattle. Its most famous specialty is book sales, but it has diversified into other products: movies, games and music, electronics and other general merchandise categories, including apparel and accessories, auto parts, home furnishings, health and beauty aids, toys, and groceries... Shoppers can also download e-books, games, MP3s, and films to their computers or handheld devices, including Amazon's own portable e-reader, the Kindle. Amazon also offers products and services, such as self-publishing, online advertising, e-commerce platform, hosting, and a co-branded credit card. Describe eBay supply chain: who are the main stakeholders EBay is the “The world’s Online...
Words: 581 - Pages: 3
...Industry Amazon: Rivalry among competitors is high. Since Amazon offers such an extensive selection there are more companies competing with its products and services. They have direct competition from EBay and Barnes & Nobles. EBay: Just like Amazon, EBay faces high competitions. Like eBay number of companies offer the same service and products to the market. Threat of New entry Amazon: Threat of new entrants is low. It would be virtually impossible for a new company to reach the magnitude of inventory and status that Amazon maintains. Amazon has been in the market for over 15 years now and it would be extremely difficult for a startup company in the industry to raise enough capital to compete with Amazon even on a lower level. EBay: Compared to Amazon, the threat is relatively high because any company can act as a third party just like EBay to help people sell and buy the products. But when compared to other companies the threat is low because of the brand value or the trust people have when they buy or sell the product. Threat of Substitutes Amazon: One would expect substitutes to be high but, Amazon offers good products at low prices, provides fast shipping and excellent customer service. Given these advantages, I would believe that threat of substitutes is reduced from high to medium EBay: Faces threats from Amazon. But, due to strong brand value the threat from other companies is relatively medium. Bargaining power of Suppliers Amazon: Power...
Words: 560 - Pages: 3
...Amazon’s offices to tackle a question buzzing inside the company: Should Amazon bust open the doors of its most prized data warehouse, containing its myriad databases, and let an eager world of entrepreneurs scavenge through its data jewels? For several years, scores of outsiders had been knocking on Amazon’s door to gain access to the underlying data that powers the $7 billion retailer: product descriptions, prices, sales rankings, customer reviews, inventory figures, and countless other layers of content. In all, it was a data vault that Amazon had spent more than 10 years and a billion dollars to build, organize, and safeguard. So why on earth would Bezos suddenly hand over the keys? Because in the hands of top Web innovators, some at the meeting argued, Amazon’s data could be the dynamo of new websites and businesses that would expand the company’s already gigantic online footprint and ultimately drive more sales. Others worried about the risks. A free-forall, one manager warned, would “change our business in ways we don’t understand.” Bezos ended the debate with characteristic gusto. He leaped from his seat, aping a flasher opening a trench coat. “We’re going to aggressively expose ourselves!” he declared. Today, there’s considerable reason to cheer Bezos’ exhibitionist move. Since the company opened up its data vaults in 2002 under the auspices of a project first called Amazon Web Services, more than 65,000 developers, businesses, and other entrepreneurs...
Words: 770 - Pages: 4
...online business marketing competition there are two companies competing each eBay and Amazon. That’s why I choose those companies for financial analysis. Considering availability of information analyzing year 2013 Profitability Ratios Gross Margin eBay Amazon. $3081, 000/$4530, 000 $6781, 000/$25587, 000 = 0.68 or 68% 0.2650 or 26.50% Because it shows company retains after incurring the direct costs associated with producing the goods and services sold by a company. Considering that eBay’s gross margin shows they are more efficient than the Amazon. Amazon have larger the cost than the eBay. They sale more than eBay but because of cost their gross profit is less than eBay. If we consider gross margin for an investment it shows eBay is safer than the Amazon for an investment. Operating Margin eBay Amazon. $1022, 000/$4530, 000 $510, 000/$25587, 000 = .2256 or 22.56% 0.0199 or 1.9% After operating margin analysis we can say that eBay has a large proportion of a company's revenue is left over after paying for variable costs of production such as wages, raw materials, etc. in this case company is going to left some portion of revenue after pay for debt, interest or other payments Net Profit Margin eBay Amazon. $850, 000/$4530, 000 $240, 000/$25587, 000 = .01875 or 18...
Words: 887 - Pages: 4
...distribution to your colleagues, clients or customers, please click here or use the "Reprints" tool that appears next to any article. Visit www.nytreprints.com for samples and additional information. Order a reprint of this article now. » October 11, 2008 Amid the Gloom, an E-Commerce War By BRAD STONE WHEN the e-commerce giant eBay emerged from the last recession seven years ago with an aura of invincibility, its chief executive, Meg Whitman, boasted that “eBay is to some extent recession-proof.” As the online auctioneer’s revenues and stock price kept climbing, one of its primary rivals, Amazon.com, just limped along. How times have changed. Ms. Whitman, now co-chair of Senator John McCain’s presidential campaign, retired from eBay earlier this year as the company struggled with stagnation. Amazon, meanwhile, has emerged as one of the most vibrant and reliable retailers in the country. And in an unmistakable sign that Internet companies are indeed exposed to the gathering economic storm stemming from the credit crisis, Ms. Whitman’s successor, John J. Donahoe, laid off 10 percent of eBay’s 16,000 employees last Monday. Mr. Donahoe noted that eBay was already feeling the effects of the downturn. “This looks like it is going to be a more typical economic cycle that impacts consumer spending,” he said. “We are not immune.” That the economic crisis is washing up on Silicon Valley’s shores shouldn’t, perhaps, come as a surprise. Most tech companies are defenseless against waning...
Words: 4127 - Pages: 17
...Ebay vs Amazon (Porters 5 Force) Porters 5 Force Rivalry in the Industry Amazon: Rivalry among competitors is high. Since Amazon offers such an extensive selection there are more companies competing with its products and services. They have direct competition from EBay and Barnes & Nobles. EBay: Just like Amazon, EBay faces high competitions. Like eBay number of companies offer the same service and products to the market. Threat of New entry Amazon: Threat of new entrants is low. It would be virtually impossible for a new company to reach the magnitude of inventory and status that Amazon maintains. Amazon has been in the market for over 15 years now and it would be extremely difficult for a startup company in the industry to raise enough capital to compete with Amazon even on a lower level. EBay: Compared to Amazon, the threat is relatively high because any company can act as a third party just like EBay to help people sell and buy the products. But when compared to other companies the threat is low because of the brand value or the trust people have when they buy or sell the product. Threat of Substitutes Amazon: One would expect substitutes to be high but, Amazon offers good products at low prices, provides fast shipping and excellent customer service. Given these advantages, I would believe that threat of substitutes is reduced from high to medium EBay: Faces threats from Amazon. But, due to strong brand value the threat from other companies...
Words: 334 - Pages: 2
...business activities using either Amazon.com or eBay and by using social networking sites. Before I can go into helping Betty decide if Amazon.com or eBay is better suited for her needs, I need to get some background information on the two companies. Amazon.com is a “US-based multinational electronic commerce company and it’s the largest online retailer in the US, with nearly three times the Internet sales revenue of the runner up, Staples, Inc., as of January 2010” (Wikipedia, 2011, para. 1). Amazon.com was founded by Jeff Bezos in 1994 and he launched it online in 1995. Although they mainly are a retail store, the company launched Amazon.com Auctions, a web auction service, in March 1999. Amazon.com has two different price points for selling items on their site. One is called “Sell your Stuff”, which is for individual sellers who expect to sell less than 40 items a month, which cost $0.99 per sale plus a referral fee and a variable closing fee for each media product sold. The other option is called “Sell Professionally”, which is for professional sellers who expect to sell more the 40 items a month, and has a monthly cost of $39.99 plus referral fees and closing fees for each media product sold. eBay Inc. is an “American Internet company that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide” (Wikipedia, 2011, para. 1). eBay was founded in 1995 by Pierre Omidyar and Michael...
Words: 2047 - Pages: 9
