Ebay: The Customer Marketplace

Case: eBay: The Customer Marketplace

The protagonist is Meg Whitman and her main objectives include: helping small sellers not feel intimidated by the presence of large companies, keeping the flea market feel despite the global expansion eBay has accomplished, and growing the company to increase share price for shareholders. Meg Whitman has to make several decisions to continue eBay's success into the future. First, Whitman must decide whether or not to limit the power of big companies to protect smaller sellers. Second, Whitman must decide whether or not to limit the number of companies that can join the eBay marketplace in order to keep the “small town” feel (Frei, 16). Third Whitman must decide the type of fee structure that will be the most fair for all sellers while still meeting profitability goals.

There are several problems that must be addressed. First, the problem of keeping small sellers like Barbara Smith content with the new growth initiatives at eBay. Smith is losing patience with eBay and the increasing fees for transactions and services. Users, like Smith, who have made eBay their full time job want eBay to continue to facilitate the selling of products rather than complicate the process with higher fees. The opportunity to raise revenues by increasing fees for transactions and services poses certain risks. For example, there exists the risk of losing sellers of collectible items due to high fees and heightened frustration with the selling process on eBay. Whitman must decide the best fee structure to implement to keep all sellers satisfied. Whitman can raise fees on everyone regardless of size or she can raise fees depending on the size and number of transactions. The latter may be fairer to individual sellers who are competing with large retail companies. Small sellers, who usually make far less revenue than big companies, would pay less in fees than bigger companies that sell more and make bigger transactions. Sellers, like Smith, would appreciate not having higher fees eat into their profits. Under this fee structure, the sellers that sell the most will pay more in fees compared to the sellers