Lim Sei cK
eBay does not 'make' anything in the traditional sense - is it therefore a business? Justify your answer. (5 Marks)
eBay INC owns eBay.com It operates as an online auction and shopping website – people and businesses buy and sell a broad variety of goods and services worldwide. Consumer-to-consumer corporation Market: buyers & sellers
Using examples, explain what inputs eBay might use in conducting its business. What are eBay's outputs? (5 Marks)
INPUT: Computer, servers, webpage design OUTPUT: Electronic payment, physical transfer of goods
Explain how eBay makes a profit - use appropriate terminology in your answer. (4 Marks)
Sellers pay fees to list their goods/services Sellers pay a percentage when the item is sold Every transaction is charged
Using the figures in the evidence above, calculate the profit made by eBay in the first 3 months of Show all your workings and calculations clearly. (4 Marks)
2005 Revenue: $1.032 billion ($1,032,000,000) Cost: $186,000,000 + Overhead $509,000,000 Total cost: 695,000,000 Profit: Revenue – Total cost $337,000,000
What might a company like eBay use this profit for? (4 Marks)
Increasing international trade, expansion to China, India Acquiring companies: Paypal, Skype Increase supply of goods Better services
What other factors might help you in deciding whether eBay has been a success as a business? (Hint: think of other objectives the business might have - the mission is one example!) (8 Marks)
eBay is successful - It has achieved its mission to provide a global trading platform where practically anyone can trade practically anything. - Innovative business model - Get the customers the right product at the right time at the right place