Online Price Behavior and eBay's Price Advantage

Justin Carriere


EBay is one of the world's most popular auction websites. Millions of buyers and sellers use eBay as a medium for e-commerce everyday. In this paper I will explain that one of the primary reasons for the success of this company is the perception that on average, eBay offers the best price between any two new like kind products. There are many factors that effect prices online and offline. Online purchasing and transaction behavior play a large roll in the actual prices that can be charged. Traditional retail establishments (retail establishments that have a physical location) have historically been the primary shopping location for all consumers.

With the proliferation of the Internet and the advancement of the technology that surround it there has been a rapid increase in the amount of purchases and transactions that are being conducted online. This paper will present the benefits that online purchasing and online transactions in general present to individual consumers and businesses. It will also discuss how these parties are taking advantage of online resources. There are also inherent disadvantages and in some cases dangers with regards to online transactions. All of these factors impact the prices that can be charged online and offline.

After presenting the differences in average prices between identical goods found on eBay compared to those same goods found in traditional online and offline retail establishments, information surrounding the current and future online consumer behavior will attempt to explain the reason for price discrepancies. Also same information should be able to provide insights about online price behavior in the future