More and more people and companies are buying and offering their products online. The electronic markets and auctions are growing, but how do they keep their customers satisfied? We analyzed and compared Amazon and eBay and we provide them with some recommendations in order to improve their customer satisfaction.
Most people assume that both companies are very similar. They are globally active, sell products online well-known because of their websites and accumulate revenues of more than a couple of billion dollars. However, although their businesses might look like the same, there are huge differences in the way both companies operate.
eBay is an electronic auction in which buyers and retailers globally buy and sell products. The business of eBay consists of three main parts. Firstly, each individual that wants to sell a product on eBay has to pay a 10% fee on the final value. Furthermore, eBay upsells its fees by offering enhanced auction features in order to increase the visibility of the offers. Finally, eBay sells advertising every year, with a net worth of $2.8 billion. (McFarlane, 2015)
Amazon is an electronic marketplace and is the world’s-largest internet-based retailer. The business model of Amazon also consists of three main parts. Firstly, Amazon’s business consists of direct sales, so Amazon sells its own products. Secondly, Amazon provides a platform for third-party retailers to sell to buyers for a small fee, which makes up for almost 50% of all sales on Amazon.com. Finally, Amazon offers customers an additional service which provides shipment services and economies of scale, called Amazon Prime. (Bhasin, 2015)
To satisfy customers, eBay invests in great deals, security, safety, convenience and variety, while Amazon invests in fast delivery, quality assurance and customer service. However, when we look at customer satisfaction, according to the American Customer Satisfaction Index, Amazon scores better than eBay. Amazon has an index of 83, compared to an index of 75 for eBay, while the internet retail average is 80 (ACSI, 2016).
A specific example of the investments, is Amazon’s fulfilment centers, which helps customers scale their business (Amazon, 2016) An example for eBay is eBay Guarantee, which is used to arm their customers against fraudsters. As a weakness, Amazon spends a lot of money on their centers and eBay is unable to measure illegal activity.
When comparing data, we see that the bounce rates are equal, 75% of shoppers view more than one page. Secondly, the user base of Amazon equals 244 million, compared to an amount of 157 million for eBay. Thirdly, shoppers browse the marketplaces for astounding lengths, 11 minutes and 32 seconds Amazon and 13 minutes and 10 seconds on eBay. (Haselden, 2015)
To conclude, both of them are able to increase the customer satisfaction. First of all, they should build trust of their customers by giving reliable information. Secondly, they should give the customers benefits. Finally, an outstanding 24/7-hour customer service is essential.
Bibliography
ACSI. (2016). Benchmarks by Company. Retrieved from The ACSI: http://www.theacsi.org/?option=com_content&view=article&id=149&catid=&Itemid=214&c=Amazon
Amazon. (2016). Amazon. Retrieved from Fullfillment by Amazon: https://services.amazon.com/fulfillment-by-amazon/how-it-works.htm
Bhasin, H. (2015, April 18). SWOT analysis of Amazon . Retrieved from Marketing91: http://www.marketing91.com/swot-analysis-of-amazon/
Haselden, J. (2015, May 5). A Comparison of eBay vs Amazon Selling. Retrieved from Nchannel: https://www.nchannel.com/blog/ebay-vs-amazon-selling-comparison/#infographic
McFarlane, G. (2015, April 28). How eBay makes it money. Retrieved from Investopedia: http://www.investopedia.com/articles/markets/042815/how-ebay-makes-its-money-ebay.asp
Videolink: https://www.youtube.com/watch?v=Ak4H6Xvv3ys
Group 90
David Wiegel
Mathieu Romers
Michael Aarts
Ewoud de Ronde
