Amazon vs. Ebay

Introduction According to Heyes (2005), in recent years online shopping is becoming more popular. Two popular online shopping sites are Amazon and eBay. Therefore, in this report, I want to explore which site is more competitive and how each one will do in the future, in relation to the industry in which they compete. The industry of online shopping has a unique service. Online shopping is the process through which consumers directly buy goods or services from a seller in real-time, without an intermediary service, over the internet. Internet business began in1991.

It was not until 1994 that online shopping was being utilized, such as online banking. “During the same year, 1994, Netscape introduced SSL (Secure Sockets Layer) encryption of data transferred online, which has become essential for secure online shopping. Also in 1994 the German company Intershop introduced its first online shopping system. In 1995 Amazon launched its online shopping site, and in 1996 eBay appeared” (Wikipedia, 2011, page. 1). Company Backgrounds Amazon Jeff Bezos established Cadabra. com in 1994, and then in 1995, Bezos changed the name of the company to Amazon. om. The company marketing started in 1997; the company began with an online bookstore. In 1998, Amazon gradually expanded their products and domain. In 1999 Amazon cooperated with Sotheby’s companies to start an online auction. Amazon also cooperates with Toys’R’us. com to establish a co-branded toy and video game store. At the same time, Amazon added a French and Japanese language site. However, because of restructuring plans, Amazon decided to decrease 15% staff. In 1998, AOL became a marketing partnership. Amazon purchased some assets from Egghead. com.

In addition, in 2001, Amazon also made a deal with Borders in order to provide service, inventory, and fulfillment for Borders. com. Subsequently, Amazon launched its clothing sales which included hundreds of retailers such as Nordstrom, the Gap, and Land’s End in 2002. Amazon expanded its business territory to China in order to gain market share and improve profitability by purchasing Joyo. com in 2007. In the same year, Amazon launched its electronic book, and in order to provide varieties of products, Amazon launches Endless. com to sell shoes and accessories. Amazon also launched Askville. com to allow users to solicit answers from others ites, and the Amazon MP3 site to offer free copyrights restriction digital music (Hoover’s Inc. , 2011, P. 4 ). Amazon is continually growing through its quality customer service and IT technology. It is providing a new marketplace for customer to compare and shop with (Hoover’s, Inc. , 2011, P. 4). eBay eBay began in 1995, and was meant to be an online garage sale for people (Ben, 2011). It is the largest marketplace in the world, with about 147 million people using eBay worldwide and 430,000 people in the U. S. alone. eBay provides a person-to-person trading network for people locally, nationally and internationally.

Therefore, trust between individuals is very important and so eBay purchased a payment system called PayPal (Gopalkrishnan & Gupta, 2007). Moreover, eBay is not unlike traditional companies only aimed at single type customer, they applied the CRM (Customer relationship management) systems on their customers. This system really brings about a high return rate of customers. The application of the CRM system and how the systems can benefit eBay will be further discussed in this paper (Catalogs. com, 2007). This paper uses data from both companies that I compiled into graphs to carry out the comparative analysis.