EBay’s Impact On Economy And Prices
Some people believe that online operations are very different from traditional ones in both their impact on the economy and their prices. However, the evidence suggests that e-commerce operations management, or the way that e-commerce works, is basically no different than operations management in the traditional sector. It is handled virtually the same way, and it is also priced approximately the same. There are a few differences, however, such as the way that inventory is handled and the avoidance of the middleman (Lawrence, et al., n.d.). People who sell through places like eBay and Craigslist usually do not have a middleman involved, and they sell their own personal merchandise or merchandise that they bought specifically for resale. This is very different from what is done in a traditional, brick-and-mortar store where items are bought from someone else and then put in a store for people to browse through. EBay, though, does have many sellers who have stores where this same type of activity takes place.
One of the vast differences between places like eBay and more traditional stores is that people usually must pay shipping. Some sellers offer free shipping, and almost all of them will combine shipping if a person buys more than one item, but overall there are shipping charges that must be dealt with. Traditional stores do not have this kind of concern, and it can save people money to buy locally, depending on the price of the item vs. The cost of the shipping charges that the particular seller is charging. In general, though, there are many similarities between traditional operations and e-commerce operations. E-commerce can be considered very similar yet better in some ways because it allows many events to occur much more rapidly and helps avoid inventory issues that can be corrected with a just-in-time system. It is likely that many e-commerce businesses have their computers linked to their inventory so they will know exactly how much to order, and when, if they are big businesses (Wollan, n.d.). With the ease of use for computers today, it is quite likely that even a small-scale eBay seller keeps track of his or her inventory through the Internet.
E-commerce is also making a comeback in the retail world. For example, grocers are beginning to sell online again after a long absence. The difference this time is that they are going about it in the same way that they run their businesses. They are selling to select areas and towns, just like a store located there, instead of trying to sell everywhere. This keeps their operating costs low, and because of this, they can expand to other markets as their profits increase – just as they would with traditional stores (Lee, 2003). Customers that shop online for groceries often shop for other items as well, finding the computerized version of shopping faster and more convenient. Since this is becoming a trend, online sellers such as eBay and Amazon are capitalizing on it and branching out into more markets as they realize that people are listing more and more things.
The main reason that eBay does so well is because it helps to make buying things very convenient, similar to large retailers that have ‘superstores’ which provide many goods and services in one place (Hof, 2003). A lot of eBay sellers are creating stores today because they are easy to set up and actually not that expensive – at least when a person considers what the overhead would be on a traditional store with rent and utilities and insurance, etc. However, not everyone likes to sell or buy online, and one of the largest drawbacks comes in with shipping costs for oversized or heavy items. Many of these are sold for local pickup only, and that restricts these sellers basically to having only the client base that a traditional store would have without giving people the opportunity to come to the showroom and look. Because these retailers and many others are doing so well online, though, it is likely that they will be around for a long time to come, despite some price and shipping concerns for some buyers and sellers.
Lawrence, F. Barry, Zank, Gail M., Jennings, Daniel F., Stading, Gary L., Vokurka, Robert J., & Narayan, Ramasubramanian. “Alternative channels of distribution E-commerce strategies for industrial manufacturers.” Texas a&M University (n.d.): 34-45.
Lee, Louise. “Online grocers: finally delivering the lettuce.” Business Week 3830 (2003, April 28): 67.
Hof, Robert D. “EBay rules the online marketplace thrives in good times: and bad.” Business Week 3826A (2003, March 25): 172.
Wollan, Melody. “E-commerce operations management.” TUI. (n.d.) PowerPoint Presentation.
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