Analyzing Managerial Decisions: eBay.com 1. How does eBay Create value? eBay created value by ways of connecting businesses and individuals together to sell, trade, buy or trade their products. Many have witness a safe, quick and easy way to move products across the globe. This save on trying to reach buyers and sellers through local or community papers, which limits the amount of people reached. eBay also has the website structured where it is easy to locate what the seller or buyer is seeking. These different sites show many of the same items that you can choose from, negotiate, as well as compare. Anther value is that buyers are able to purchase below the market value. Buyers and sellers have the option to see tips that are offered. You may be a new-comer and need assistance, which can be provided through eBay. Sellers do have the option to set up and advertise several products at discounted prices. 2. What potential contracting problems exist on eBay?
There are many potential and actual problems that have exist on eBay. In order to sell or purchase, you will have to set up an eBay account, which a signed user agreement is part of the set. A possible contracting problem is if a buyer wins an action and doesn’t pay for the product in the time it should be paid then the seller is at a loss. Also, this could be the reverse, the buyer can purchase and the seller doesn’t deliver on time or the product may not turn out to be what the buyer thought if should be. Therefore, this is another problem that can come up when going through eBay. Paying through PayPal has its pros and cons. For example: I was set up to purchase and item through PayPal, the amount of the invoice was shown on the internet in the amount of $100.00, and coming from New York. However, once I click the purchase tab on PayPal, the bank called inquiring that the transaction was suspicious, therefore, the bank explained that the amount of $200.00 was being request and the PayPal payment routed to Hong Kong.

3. How dose eBay address these problems? eBay is set up like most of your retail or business industry would be. Therefore, rules and regulations are set up for the buyer, seller or anyone that has an account through eBay. As stated earlier, anyone who wishes to have an account must sign an agreed contract. Ebay has a dispute department that will handle any disputes. Also, eBay flags those potential buyers and sellers who have or on their fraud or dispute list. Therefore, issues are taken seriously, and customer satisfaction (buyer) by guaranteeing those damaged and or non-delivery products. Therefore, eBay has a fraud prevention and escrow service to avoid fraudulent activities. Also, it blocks those who do not uphold their end of the barging for doing business on their site.

4. What are the contracting costs at eBay?
There are a few fees that you will encounter by using eBay’s channel to sell. These 5 basic fees are listing, extra features, final value fees, PayPal transaction fees and store subscription fees. The fees will depend on purchasing or biding. The auction fee depends on how the auction price starts. These fees depend on the category in which the product is listed and what category the seller falls into. Some sellers will pay the same, and other will pay at a different price.

5. eBay claims that it has only a small problem with fraud and misuse of the system. Does this imply that it is overinvesting in addressing potential contracting problems? Underinvesting? Explain.
Not, at all. eBay should always protect its site and those who are serious about doing business over the web. eBay reputation is known to make new comers and web selling trustworthy or their structure is put in place that draw millions all over the world. Without put secure protection in place, it might detour millions. It could be that small facture of deception that cost ebay its reputation, very extreme high legal fees, and may lose millions of .clients. Therefore, anytime you are dealing with millions of unknown people, investing to cover the cost of others, is priceless.