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Analysis of an E-Bay Entrepreneurial Opportunity

E-Bay Inc. is one of the leading American multinational corporations that has created a commerce platform where people across the world can sell and buy products online. The founder of the business came up with the idea when the use of the internet increased significantly in the 90s. At the time, many companies with business models focused on the internet were established but only a few such as eBay have reached an international size with huge profits at the present day (eBay, 2022).

The company offers an international market place for thousands of individuals and businesses. As such, the organization has millions of both sellers and buyers that are active in the platform at any given time. E-bay is used in over 30 countries across the globe (eBay, 2022). A wide variety of goods and services are offered in the platform. Some of the services include sale services, advertising, and event ticket sales among others (eBay, 2022). On the other hand, some of the goods available on the platform include electronics such as smartphones, cameras, video games and consoles, and laptops among others (eBay, 2022). In addition, other products that are sold and bought on the platform include clothes and shoes, jewelry and watches, home furniture, motor equipment and accessories, industrial machines and equipment, art collections, musical instruments, and health and beauty products among others (eBay, 2022).

The platform generates revenues by charging a fee for products sold. However, buyers are not charged for using the platform. In addition, the platform also allows the buyers and sellers to conduct business through online payment methods such as PayPal among others. In this project paper, I will analyze the opportunity of entrepreneurship on eBay. As such, I will consider the business environment, the market, competition, legal and financial matters, and risks among others.

Entrepreneurship on eBay

An entrepreneurial opportunity refers to a situation in which new goods and services can be sold at a greater price than their cost of production (Masango & Lassalle, 2020). As such, the entrepreneur ends up making profits for the action taken. The entrepreneurial opportunity can be created or discovered. Accordingly, the methods of finding a new opportunity include developing a new market for an existing good or service, discovery of a new way of production that uses few resources, using a new technology to produce a good or using an old technology to produce a new product in the market (Masango & Lassalle, 2020). Businesses are put up for personal development, philanthropy, creation of employment, and independence among others (Frederick, et al., 2016)

Entrepreneurial opportunities also exist on e-commerce platforms such as eBay. Many entrepreneurs have flocked the platform because it offers a wide global market. Financial records for the organization indicate that over 150 million users on the platform conducted business on the platform amounting to over $ 20 billion of gross merchandise volume in 2018 (eBay, 2022). These are always increasing as more people join the platform to sell or buy products. Accordingly, in analysis of the opportunity of business available on eBay, entrepreneurs should consider the following factors.

Market Research

Market research involves synthesizing and gathering information to understand customer demand for products and services. As such, it helps the entrepreneur to discover the potential target market and the interest consumers (Baek & Lee, 2021). The entrepreneur is therefore able to make informed decisions about what products to offer in the market. The importance of market research is that it helps the entrepreneur to achieve customer satisfaction when providing goods and services (Baek & Lee, 2021). This is because the products will be designed to meet the needs and wants of the customer. In addition, market research is also important because it can be used to make forecasts and hence the entrepreneur can keep an optimum inventory stock for constant demand and supply.

Market research involves identify consumer segments on common characteristics such as age, gender, education, occupation, and whether they are concentrated in the country or oversees. Accordingly, the entrepreneur can use this information to have a market niche. In addition, the market research also helps in identifying the size of the market and hence the amount of investment and production the business will make.

The market on the eBay platform is expanding as time passes by. This is because internet users are increasing across the globe. The increase can be attributed to a higher number of people that can access the internet through smartphones, tablets and computers as well as better internet connectivity due to better technology. In addition, there is potential of growth of the market because not all users are registered users on eBay (eBay, 2022). The company covers only a small percentage of the global market. As such, as the popularity of the platform grows, the market potential will also grow. Accordingly, based on this analysis alone, there is need to consider an entrepreneurial opportunity on eBay.


Specialization in business involves focusing the sale of products on a limited scope of goods. The advantages in specialization includes an increase in efficiency and a competitive advantage in the industry. As such, eBay provides a platform in which an entrepreneur can provide a wide range of goods and services. However, it is important for the business person to specialize in a specific area as it will play an important role of establishing the brand of the business. In addition, specialization also helps the business to survive in the industry in the presence of other rival business. The eBay platform has competitive forces like any other market. Moreover, businesses on eBay also face the threat of entry of new businesses in the market as well as the threat of substitutes for products (Frederick, et al., 2016).

Accordingly, developing a specialty on eBay should be encouraged based on the availability of customers as well as the availability of a product (Frederick, et al., 2016). This are some of the factors that will lead to the growth of sales for the business. In addition, the entrepreneur will also avoid addressing questions about random products. Moreover, specialization will also allow the entrepreneur to seek products from other sellers on the platform and may be selling at a wholesale price. To this end, one can consider an entrepreneurial opportunity on eBay by choosing to specialize in the sale of specific goods and services for brand recognition and competitive advantage (Baek & Lee, 2021).

Customer Feedback

Setting a new business involves taking a path of making a lot of efforts as well as experiencing failures. This is because the business needs capital, compliance to policies and buyer satisfaction among others for success (Frederick, et al., 2016). For this reason, entrepreneurs hire consultants to provide expert opinion and advice on the steps to follow for success in running a business. Some of the information needed include legal requirements as well as business ethics to practice.

Entrepreneurs on eBay can seek assistance on eBay help files as well as on the eBay seller dashboard or the seller information center (eBay, 2022). The platform also has some legal and ethical practices that entrepreneur need to follow to operate successfully. Accordingly, the eBay seller dashboard is an essential tool that contains customer feedback, reviews and ratings of a business (Gupta & Chopra, 2018). As such, a businessperson can use the feedback to monitor the performance of the business as well as the areas that need improvement (Gupta & Chopra, 2018). An entrepreneur can encourage customers to provide positive feedback and reviews by responding to customers questions on matters such as terms of sales of products, payment terms, shipping, and returns among other common questions that customers ask on eBay. In addition, customers can leave positive feedback on the seller dashboard if the entrepreneur provides excellent customer service (eBay, 2022).

Investing in the Business

There are various sources of capital to invest into a business. Some of these sources include venture capital, loans, private placement, convertible debentures, and public offerings among others (Frederick, et al., 2016). These methods of investing in a business have different features as well as varied benefits. Accordingly, these forms of capital investment can also be considered when setting up a business on eBay. However, the platform requires a lower investment compared to a traditional business because there are no charges such for advertising and renting for premises among others. in addition, the platform provides features such as advanced design of the business, customer support, management and promotion of the business for free (eBay, 2022). To this end, an entrepreneur should take advantage of an entrepreneurial opportunity on eBay.

Developing a System

Having a defined way of operating a business is important because it increases efficiency and hence higher productivity. Having a business on eBay also requires the entrepreneur to develop a system that customers identify with and hence brand recognition. An entrepreneur can develop a system such as encouraging buyers to purchase multiple items by offering discounts on multiple items (Guo, et al., 2020). Such a system will help the business to make additional sales. In addition, having a routine of doing business helps customers to be accustomed to the business and hence fewer questions when they provide feedback.

Mode of Payment

Every business has an accepted mode of payment. Accordingly, when setting an online business, the entrepreneur should provide many options for payment of goods and services provided on the platform. Many options open up for more customers to consider the products offered and also helps to encourage loyal customer base. Some of the options available for online payment include banking cards, Google pay, PayPal, and mobile wallets among others. The most popular online mode of payment on eBay is PayPal. Accordingly, in considering an entrepreneurial opportunity n eBay, an entrepreneur should offer PayPal (eBay, 2022).

The Cost of Doing Business

Running a business venture attracts various costs. A traditional business attracts costs such as licensing and permit fees, legal and other professional fees, fixture and equipment, and adverting and promotion fees among others (Frederick, et al., 2016). Running a business on eBay also attracts some charges. These include listing of items charges as well as final value fees (eBay, 2022). As such, to make the business venture successful, an entrepreneur should include these costs on the price of the product as part of the cost of production. To this end, the entrepreneur can make profits on the sale of products and services on the online platform. However, the price decision of the products should also be strategically planned to attract more customers to the product as well as to attain a competitive advantage over the rivals on the platform (Baek & Lee, 2021).

Managing Customer Expectations

Customer expectations are behaviors and actions that individuals have when anticipating for a good or service. These expectations are based on the customers’ experiences and knowledge about products and services. The most common expectation of a customer is the satisfaction of needs and wants when consuming a product. Accordingly, the best method to manage customer expectations for a business including online business such as those on eBay is to under-promise and over-deliver. This helps to ensure that customers do not get disappointed when a product is not in the level of the customer’s expectations.

As such, if an entrepreneur observes all the above factors, then running a business on eBay will be successful. However, it should be noted that several factors can cause a business to fail. Some of these factors include lack of market research, inadequate understanding of technical requirements, poor financial understanding, lack of uniqueness, unclear business definition, ignoring legal issues, overreliance on one customer, inappropriate distribution strategies and undercapitalization among others (Frederick, et al., 2016).


Online businesses are growing because of an increase of the number of internet users. This has been possible because of an increase of smartphones and computers as well as better internet connectivity. Accordingly, this means that there is potential for online business to excel as the number of potential customers is high. To this end, for entrepreneurs to have successful businesses on eBay, they should consider factors such as market research to understand the customers and competitors in the market, develop a specialty to enhance the business brand and attract customers, seek help on the platform dashboard, specify the mode of payment such as PayPal, choose an appropriate source of funding, analyze the cost of running the business on the platform, and manage the customers’ expectations.


Baek, J., & Lee, J. (2021). A Conceptual Framework on Reconceptualizing Customer Share of Wallet (SOW): As a Perspective of Dynamic Process in the Hospitality Consumption Context. Sustainability, 13(3), 1423.

Ebayinc. (2022). Our Company – eBay Inc. Retrieved 15 February 2022, from

Frederick, H., Kuratko, D. F., & O’Connor, A. (2016). Entrepreneurship: Theory, process, practice (17th Ed.). Cengage Learning United States.

Guo, Y., Hu, X., Zou, Y., Li, S., Cheng, W., & Li, Z. (2020). Maximizing E-Tailers’ Sales Volume through the Shipping-Fee Discount and Product Recommendation System. Discrete Dynamics in Nature and Society, 2020, 14.

Gupta, V., & Chopra, M. (2018). Gauging the impact of knowledge management practices on organizational performance – a balanced scorecard perspective: Very Informal Newsletter on Library Automation. VINE Journal of Information and Knowledge Management Systems, 48(1), 21-46.

Masango, S. G., & Lassalle, P. (2020). What entrepreneurs do? Entrepreneurial action guided by entrepreneurial opportunities and entrepreneurial learning in early internationalizing firms. International Marketing Review, 37(6), 1083-1119.


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