ebay

Ebay Revenue Model

Ebay is an online auction and shopping website in which people and businesses buy and sell goods and services worldwide. Millions of collectibles, appliances, computers, furniture, equipment, vehicles, and other miscellaneous items are listed, bought, and sold daily.EBay generates revenue from a number of fees such as insertion fees, promotional fees, and final value fees.

Insertion fees: When an item listed on Ebay, this nonrefundable fee is charged.

Promotional fees: Fees that charged for additional listing options that help attract attention for an item, such as highlighted or bold listings.

Final value fees: Commission that charged to the seller at the end of the auction.

Furthermore, Ebay generate revenue by sales revenue model through its subsidiary, Half.com, offers fixed price, person-to-person selling of goods, including books, CDs, videos and games, charging a 15% commission on completed sales.

 

 

Additionally, a portion of Ebay’s revenue also comes from direct advertising on the site, as well as end to end service providers whose services increase the speed of transactions. The acquisition of PayPal, whose products allow the exchange of money over the Internet, brings additional transaction based fee revenue.

 

ebay

 

eBay does not have inventory like Amazon.com. It only provides technology platforms and tools for e-commerce. ebay has various revenue model, it earns transaction fee from owning paypal, an online paying service system for users to buy items online more conveniently. ebay also gains sales from the service of listing customer’s product to be sold to other users as well as some advertisement fee. ebay generated overall revenue around $6 billion from its three primary business: auctions, payments (PayPal) and communication (Skype).

 

	US $ (in thousand)	Percentage
REVENUE MODEL  Transaction fees        Marketplace        Payments        Communications	4,203,340 1,401,824 192,756	70.4% 23.5% 3.2%
Advertising and other	171,821	2.9%
Total Revenue	16,593,986	100%