The Unique Merchandising Strategy of Ebay

The Unique Merchandising Strategy of eBay

1) Any retailer could learn that having more than one market place is strategically the best way to drive up profits. For instance, eBay sold merchandise on three other sites similar to eBay.com. Also, they own Paypal, which is basically an online credit card that can be used to make purchases from these websites. Retailers could also learn from eBay by showing the willingness to use pricing as a means to bring more sellers on board, as well as providing incentives for sellers to enhance the user experience by engaging in safer, simpler transactions. To increase prices on items, eBay has decided to have a low "take rate" for the higher priced items, that way no one is selling merchandise too cheap.

2) eBay's overall merchandising strategy is online auction tactics. Which I think is positive on their end. They have a take rate for the merchandise sold on the site. There was a great increase of 2.4 Bil in 2007 sales and then in 2011 there was a $3.3 billion. This shows how eBay will continue to merchandise their products on line in the future. Plus they monitor the "listings-to-sales conversion rate" that ranges from 39 to 43 percent, these rates have sayed unchanged over the years. eBay, doesn't only use eBay to sell their merchandise, they also use, come from not only eBay, but its properties, including eBay.com, Half.com and Shopping.com.

3) Having such a huge product assortment can have many advantages and disadvantages. A few pros are advantages for customers buying on eBay. There are high profit margins. When you buy in bulk, you buy at a high discount. For eBay there is a huge customer loyalty, customer will see that they can find almost anything to purchase and lower prices on eBay than anywhere else. It's a broad market, high level of customer traffic, one-stop shop are few of the many other pros to having such a large product assortment. One con is that having so many different types of merchandise makes it harder to forecast than staples due to damand variations, style changes, also there's a big inventory commitment. Lastly, a few more disadvantages, is having a high inventory investment, they have a general image, and there are so many items that have such a low turnover.

4) Today, eBay uses two different ways to offer products. First, they have set prices, which eBay refers to this as setting a reverse price. By doing