Sunday, 30 October 2011

Week Ten

This week we are looking at trust. There has been no in class session this week.   

1) What is meant by the following statements?

Trust is not associative (non-symmetric)
This means that trust is not necessarily the same on both sides of the transaction or any other situation. Say for a simple example, I trust my wife to remember to pick up a birthday card for my mum. This does not mean my wife would trust me to remember to pick one up for her mum. In business an example of this would be that a seller may trust that the buyer will hold up their end of the deal and transfer the money for a product or service but the buyer may not have the same amount of trust that the seller will deliver what they have promised.

Trust is not transitive

I think that what is meant by this statement is that trust will not be transferred from one party to the next just through association. For example if a manufacturer trusts their wholesaler it doesn't mean that they will automatically trust the retailer that the wholesaler on sells their product to.

Trust is always between exactly 2 parties.

this statement means that the trust in any transaction is between the two parties that the transaction is between. for example in a situation where a manufacturer sells to a wholesaler and then the wholesaler sells to a retailer, the retailer only has to trust the wholesaler to provide the goods. the same retailer may not even know the manufacturer, the trust for the manufacturer lies between them and the wholesaler.

Trust will involve either direct trust or recommended trust

recommended trust is where one party recommends trust of a third party to someone. for example if a manufacturer trusts their wholesaler they may recommend them to another manufacturer, assuming that this manufacturer trusts the person making the recommendation then they will most likely take on the trust recommended.
2a) Have a look at the following websites. What are some of the elements that have been incorporated to increase your trust in the sites? If there are also some aspects which decrease your level of trust describe them as well.

After looking at all of these sites here is a list of elements I think have been put in to increase trust.
  • Contact us page
  • Sign in/log in pages, registration.
  • Customer support and help pages.
  • Legal agreements, Product disclosure statements, user agreements, terms of use pages, privacy policy's, security statements.
  • Safety advice pages.
  •  Feed back forums.
  • secure payment sites recognisable by the padlock symbol or the https as seen in the picture opposite.
  • Give out phone numbers.
  • Use pictures of people and families to evoke a feeling that other people use and run the site.
2b) Find a web site yourself that you think looks untrustworthy.
Here is a website that I think is untrustworthy, for a start look at the URL it is so long

Another reason I think of this site as untrustworthy is because the picture below is a screen shot of the link to it from another site it has said this every time I have visited the host site. Any site that miss leads people like that, I would consider untrustworthy. 

Wednesday, 19 October 2011

Week Nine

So this week we are looking at channel conflict. There have been no questions set for this week so I am just going to note some of the key issues of channel conflict. All of the points are taken from Ian Knox' week 9 write up and lecture slides on channel conflict.

  • Access to the Internet has given buyers opportunities that may affect what they purchase, when and where they take their business. 
  • Sellers can reach large numbers of any time of the day and reach beyond the geographical limits of their store.
  • Channel conflict occurs when manufactures or brand owners begin to sell direct to the consumer, cutting out their wholesalers and retailers. 
  • Channel conflict can be defined as any situation where two different marketing or distribution channels are competing for the same sale with the same brand. 
  • Channel conflict can occur between an off line bricks and mortar store and the same stores online store as retail employees feel threatened. 
  • Conflict can be direct, internal or external. 
  • Conflict can be found at any stage of the business process including pricing, order handling, delivery, service and repair,  customer service and resistance to change. 
  • If there is no strategies to manage conflict brands may 'cannibalise'.
  • Neither brands nor retailers can rely on customer loyalty. (Knox, 2011)
Unfortunately I think I missed the sale of the old car put on eBay. When I clicked on the link it just said the item was unavailable.


Knox, I (2011). Topic 9 Channel conflict. [PowerPoint slides]. BC501: eBusiness Fundamentals. UB, EG TAFE.

Thursday, 6 October 2011

Week Eight.

OK so this week we are looking at online auctions and in particular eBay.

Q1: eBay is one of the only major Internet "pure plays" to consistently make a profit from its inception. What is eBay's business model? Why has it been so successful?

eBay's business model is a broker. One of the major reasons for its success is eBay's diversity. Over the past decade it has branched out into all different facets of facilitating transactions. eBay now offers listings at a fixed price, it has become involved with payment processing with the acquisition of paypal, it facilitates person to person communication with the acquisition of Skye and is also moving into the classified market with a 25% share of Craigslist (Rapper, 2008). eBay has not allowed it's self to become stagnate and has moved and grown with the demand for its service.

Q2: Other major web sites, like and Yahoo!, have entered the auction marketplace with far less success than eBay. How has eBay been able to maintain its dominant position?

eBay was one of the few sites to be profitable right from the start. The company has managed to maintain its dominant position by using the Internet to bring large numbers of people together at a low cost. had to invest and invest before it became profitable and has to continue to invest constantly. Amazon has much higher overheads that eBay. These include huge inventory costs, warehousing, staff and dispatch costs. eBay on the other hand has very few overheads, it takes no possession of goods and simply charges a fee. I think eBay is also very clever in the way it makes its money, it charges you at every chance it gets, when you sell, when you buy and now with the acquisition of pay pal it charges you when you pay. Yet because the amounts are quite small this does not put people off. When you consider the fact that eBay has very little to do with each transaction and there are 68 million active users (Rapper, 2008), it is a very successful money making machine. 
Q3: What method does eBay use to reduce the potential for fraud among traders on its site? What kinds of fraud, if any, are eBay users most susceptible?

Through their security center eBay offers tutorials on safety procedures such as, identity safety, computer safety and how to avoid fraud. This center has a reporting tab where users can report fraud it also has a link that security software developers can click on and inform eBay if they have identified a security vulnerability.
Another method used is the Feed Back and rating system, this system allows users to leave comments and rate other users on their performance as a buyer of seller. This is a very useful tool and allows users to benefit from the past experiences of other users.  

Q4: eBay makes every effort to conceptualize its users as a community (as opposed to, say "customers" or "clients"). What is the purpose of this conceptual twist and does eBay gain something by doing it?

eBay promotes the community concept because for the site to be successful it needs it's customers (both buyers and sellers) to participate in a manner that recognises a shared interest. Rapper (2008) states that "both buyers and sellers must take a vested interest in the overall soundness of eBay as a broker." The reason that this is so important to eBay is because of the company's limited ability to grantee satisfaction. eBay's success is largely based on the overall success of it's community of users.   

Q5: eBay has long been a marketplace for used goods and collectibles. Today, it is increasingly a place where major businesses come to auction their wares. Why would a brand name vendor set-up shop on eBay?

The attraction of eBay for all types of sellers including brand name vendors include:
  • The ability to maximise prices and achieve the highest possible price.
  • The obvious benefits that come with the global exposure to 168 million registered users (Rapper, 2008).
  • The ability to reach a wider audience or market than that which is geographically possible.
  • The relative low overheads that are associated with any online  business, as opposed to a bricks and mortar outlet.
  • The fact that eBay has such sound and proven systems in place to handle the transaction, this is much easier than trying to reinvent the wheel.
Q6. I have a few businesses, and I have used eBay for about 12 years on and off. Currently I have about 600 books listed on eBay (seller name ozrural). I stopped selling on eBay for a few years but they changed the rules this July and it is viable again (for me). What do you think changed?

In July eBay changed the way it charges for listing books and music. From what I understand the fee system is now a fixed system that takes less from the seller and makes it more viable for a seller to sell items that are sold at a lower cost.

Additional (optional) task: If not already a member, join eBay and explore the functions of the site (optional). Consider making a purchase, or perhaps try your hand at selling. Auctions are impacting on all aspects of business so it is useful to understand how they work.

I have up until recently had nothing to do with eBay. But actually, after the lecture where Ian Knox came in and chatted to us about his son's online business I decided to give it a go. I remember thinking about what Ian said about not necessarily needing to come up with a new idea. I did some research on what people were selling on eBay and what I could buy from other sites such as Ali express. The thing I came up with that was selling well and that I could purchase at the right price was leather IPhone 4 cases. I purchased a package of 50 cases from China that worked out to cost $2 each. I have put them on eBay at a buy now price of $6.50 inc postage and I also have put some on auction (I have put in a screen shot of my sale page rather than a link to the sale as I figured it would not work once the sale finished). It has been an interesting experiment but hardly one that is going to make me rich. I have found it is a very difficult market to break into and that the margins are very low. It is difficult to get your product to come up high in the consumer search with out paying for the privilege, and if you do pay for it then you loose the majority of your profit. I am sure that the more you did this the better you would become at it and that you would learn the tricks that help maximise your profitability. For now I think I'll stick to my day job. and try to think of another use for a heap of leather IPhone cases, on that note if there was anyone who wanted a leather case for their IPhone, get in quick, I only have about 48 left and with the release of the IPhone 5 any day now these will be a collectors item in no time........ (yes, I am being sarcastic).


Rapper, M. (2008). CASE STUDY: EBAY. On Managing the digital enterprise [web audio]. North Carolina, USA: