After we understand the history and evolution of E-commerce, we also provide some information of an E-commerce success and its causes. There are several examples of E-commerce success such as Ebay, Dell corporation, Amazon etc.
Here we take Ebay to be example. Ebay begun in 1995 and by 1997 the site was attracting more shoppers than any other site on the web. The company began changing 6 percent commission on all items listed and by 1998 had grown to 20 employees.
In March 1998, ebay approached to whitman. For remaking a company, one of whitman's first tasks was to make the ebay site more professional and more profitable. In 1999 whitman negotiated the purchase of Butterfield & Butterfield, ebay moved into the business of auctioning fine art and expensive collectibles.
White trying to court the small buyers and sellers, whitman also pushed to expand the company's boundaries.She persuaded stores to sell on ebay, and began to offer specialty items under the ebay umbrella. On september 24, 1998, ebay went Public with the initial public offering selling at $18 a share. By day's end, ebay stock closed at $ 47, an increase of 163 percent.By the end of the third quarter 1999, ebay reported sales of more than $741 million, up from just $195 million the year before.
Whitman credited much of ebay's success to its basic model, which combined the elements of yard sales, newspaper classified ads and auctions. This approach appealed to a wide spectrum of customers such as movie studios that auction off memorabilia to dealers who specialize in items from books to electronic and office equipment to collectibles and antiques. Ebay carries no inventory nor does it ship items.
Ebay's success is based on its ability to transform many fragmented, primarily local markets into global ones at a relatively low cost to its users. People have always had a need and an interest in buying and selling used, surplus, and collectible items. Traditionally, they have done through garage sales, classified advertising in local newspapers, and flea markets. However, the number of people available to complete a transaction was limited because a face-to-face meeting was typically required.
Ebay makes money by charging listing fees and collecting a percentage of the selling price of items sold through the site. Ebay also owns paypal, which makes money through investing its clients'assets and from transaction fees.
Ebay appears to have significant growth potential. It has successfully introduced new markets, such as car sales, which many thought would not be adoptable to its business model. Also, only a small percentage of the world's population currently uses ebay. Fundamentally, it is so successful because it meets its customer's needs better than any competing service. No one else has accumulated such a large number of buyers and sellers in a single marketplace.
References:
E-Commerce times, from http://www.ecommercetimes.com/story/2127.htm
E-Commerce Blog, from
http://e-commerceassignment.blogspot.com/2008/06/example-of-e-commerce-success-and-its.html
Good discussion on the overall content
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