Selling Products in EBay - Example

E-Commerce: Selling Products in EBay E-Commerce: Selling Products in EBay Introduction This paper outlines a plan for selling products in EBay. EBay is an internet corporation based in California, USA that was founded in 1995 as an online shopping and auction website. The company has grown in to a multibillion dollar multinational assisting individuals and businesses sell both second hand and new items to their targeted consumers across the globe. EBay is a major breakthrough for online-based businesses since it provides a quick solution to online sales and has a large audience from which startup businesses can benefit (Joseph, 2007). EBay accepts a wide range of products and services provided such products are legal. This essay will outline an online business plan for a new business Global Cosmetics Inc., which sells cosmetics to consumers around the world. Cosmetics are body enhancement products that improve one’s appearance, body odor and include items such as body lotion, makeup kits, body sprays and soaps among others. This new business has settled on these products because of the huge demand they have around the world due to their daily usage. Cosmetics have become part-and-parcel of human life in the modern world. The essay will analyze the market for cosmetic products with a special focus on the online market where this business will be based. The essay is divided in to two main parts. The first part will outline the business plan of the company while the second part will reflect on the impact of the business plan and assess whether the business was a success or a failure. Part One: The Business Plan Mission, Vision and objectives of Global Cosmetics Inc The Vision for this business is to provide its clients and customers with the best online shopping experience based on easy instructions, friendly website, and secure payment methods with a fast and quick delivery process. This vision statement shows the direction in which the business intends to work towards in the future as well as outlining important aspects of the company that will enable it achieve its objectives. The Mission of Global Cosmetics Inc is to position itself strategically in the market through string partnerships and offering quality products and services to consumers and maintain creativity and innovation in order to provide unique services that meet needs of customers. The company’s objectives include offering quality services, establishing the company’s brands across the internet, becoming a trusted authority in the cosmetics industry, attracting a huge client base and maintaining a positive reputation for the company through engaging in legal and ethical business practices. Market segmentation The cosmetics industry is very wide with many products and services offered to different clients based on their geographical location, socioeconomic status and other needs. While most of the companies and industries in the business are well established on the offline market, only a handful of them are well established on the internet (Rhonda & Rhonda, 2003). Global Cosmetics Inc hopes to fill in this void by stabling a huge presence on the online market and attracting clients from various parts of the world with highly specialized products. The company has settled on establishing itself on the internet because it is a startup firm with limited resources to establish itself offline. Online business presence involves minimal costs as compared to offline businesses. There are also prospects of business growth on the internet since it represents a huge portion of clients that remain untapped. Other avenues such as partnerships with established companies on the internet like eBay make online businesses attractive to investors. Cosmetic products are on high demand currently since they are consumed daily when people groom themselves. The cosmetics industry can be categorized based on the different kinds of products that serve different purposes for different people. This attests to the huge size of the cosmetics industry. There are six main categories of cosmetic products playing different roles such as cleansing, moisturizing, toning, and protecting the skin. Other cosmetics are used as exfoliants and masks. The cosmetics market can also be classified based on gender, religion, and culture. This is because different religions, cultures and genders have different opinions and preferences about cosmetic products. Some people prefer highly perfumed products while some prefer products with little perfume (Millikan, 2001). There are specialized products for both men and women, as well as transgender products. These different categories of products in the industry represent different market segments, which attract different companies and businesses. All cosmetic products can perform well in both offline and online markets depending on the marketing strategies implemented by different companies. Given this huge market in the industry, Global Cosmetics Inc will focus on offering cosmetic products for women around the globe (Millikan, 2001). These products will also be tailored for different markets around the world catering for different socioeconomic groups, cultures and religions. Sub-categories in this market segment will therefore include special products targeting celebrity figures and popular individuals, different religious groups and cultures. The company has settled on this market segment because statistics show that the number of women in most places of the world exceeds that of men. Women also form the biggest percentage of shoppers of different items. Finally, women are the most concerned with their appearance when compared to men (Steve, 2008). All these factors make this market segment more profitable as compared to others in the industry. Products The business will offer many cosmetic products including body sprays, soaps, and makeup kits with items such as lipsticks, lip-gloss, lip balm, concealers, face powder, and eyeliners among others (Millikan, 2001). These products will mostly appeal to women in different socioeconomic classes around the world. The company settled on selling these products after having an intensive market research in the industry and other industries that the investors wanted to invest (Winter, 2005). The market research involved a critical and detailed analysis of the market, both online and offline; the different products offered; competitors, suppliers, prices, and emerging trends in the industry (Marc, 2011). The analysis also focused on assessing profitability of the products and markets based on the resources and strategies that this business intends to apply (Marc, 2011). After going through the research process, the cosmetics industry proved to be the most profitable on the online market with a huge demand for women products. Online market Analysis (SLEPT Analysis) This online market analysis aims at analyzing the online market industry for cosmetic products to determine its profitability and suitability. This analysis will focus on assessing the external environment of the business on the internet based on the SLEPT model of analysis. SLEPT stands for for Social, Legal, Economic, Political and Technological environment within which a business functions (Marc, 2011). This analysis is important for formulation of business strategy, planning and identifying the challenges and opportunities that exist in a specific industry. A SLEPT analysis of the cosmetic industry is as outlined below; Social factors affecting an online business on the include people’s lifestyles, tastes and patterns of behavior (Mariampolski, 2001). The cosmetics industry is similar to the fashion industry in the sense that product are affected by changes in market trends which in turn affect consumer tastes and preferences. Consumers also change their tastes and preferences when they grow older and join different age groups or when they change their lifestyles due to health or economic reasons (Mariampolski, 2001). The internet is a very fast method of communication and a source of information. Consumers are able to discover latest trends in the industry very fast enough and adjust their tastes accordingly. Global Cosmetic Inc has to be up abreast with latest market trends in the industry in order to adjust to clients needs at different times. The legal environment refers to various laws enacted by governments to protect businesses and consumers alike. All businesses have to adhere to legislation on consumer health and safety, consumer protection, environmental conservation, and employment laws (Mariampolski, 2001). Online businesses are environmental friendly hence a good starting point. The cosmetics industry involves production and sale of very delicate products that can have many effects on safely and health o consumers. Global Cosmetic Inc will ensure that its products meet the requirements and standards established by laws I different countries. This will help to avoid conflicts with regulatory bodies and establish a good and trustworthy relationship with consumers. Online businesses do not receive special treatment in relation to the legal framework and have to adhere to the same laws as offline businesses (Mariampolski, 2001). There are, however other sets of laws that only target online businesses in order to improve security of online transactions. Such laws include privacy laws, information security laws, and computer or cyber crime prevention laws. Economic factors affecting online businesses include changes in inflation, interest rates, and foreign exchange rates. These factors affect profitability of businesses and have a huge impact on strategy formulation (Mariampolski, 2001). The economic factors are closely linked to the social factors because changes in the economy often trickle down to changes in lifestyles of people. If the inflation rate is high for instance, consumers will find it high to buy luxury items such as cosmetics thus leading to reduced profitability for the business. Political factors refer to the influence of government and politics on business operations through various policies. Political influence may be national, regional or worldwide. Policies such as taxation and employment have huge impacts on business development because businesses are expected to respond positively to political changes (Mariampolski, 2001). Finally, technological factors refer to changes or advancements in technology. Technology plays a major role on business development over the years by altering how people communicate, store, manage and share information (Mariampolski, 2001). Online businesses have to embrace technology in order to be successful because the internet is based on a digital framework that is compatible with most technological devices. Online business have to be up to date with rapid changes in technology and use the most efficient technology to offer services and products to clients. Technology in business includes both hardware and software applications that aim at improving business processes. Strategy Formulation Based on the SLEPT analysis of the online cosmetics industry above, Global Cosmetics Inc can formulate different strategies to boost chances of success in the industry. The first strategy is adopting technology. The business will adopt technology in all departments in order to foster easy communication and management. Among the elements of technology that the business will implement include E-commerce software and applications, management information systems, information security systems and the latest devices and channels for communication such as tablets and social media (Oksana, 2007). The other important strategy is forming partnership with other companies on the internet. Partnerships and collaborations are essential elements for business success on the internet, especially for startups (Oksana, 2007). This business will form strategic partnerships with likeminded organizations around the world to form a strong online product distribution channel that will link customers to the company. The biggest partner will be eBay, who will provide a great platform for marketing and selling products, especially in the formative years of the business before it establishes its own e-commerce system. Other partners will include delivery and logistics companies in various locations around the world who will help to deliver products to customers. Another key strategy for the business is to enhance its marketing operations across the internet in order to establish itself and its brands around the globe (Oksana, 2007). This strategy aims at attracting and retaining more customers through creating strong brands that customers can relate with, in their day-to-day activities. This strategy will involve internet marketing, search engine optimization, and improving communication with customers through great customer relations management technology. All these three strat6egies are interrelated and will be implemented simultaneously over the next several years as the business grows and develops. Online Value Proposition Global Cosmetics Inc will position its products and brands to reflect the needs of customers in different markets and socioeconomic status. The products are healthy and safe for human consumption and above all, they are environment friendly. The company will offer quality service and products to customer as fast as possible (Jay, 2007). The company takes feedback from its customer seriously and will respond to any concerns as soon as possible. Customers can easily communicate with the company via social media, email and telephone lines for any questions or concerns. Part Two: Reflection After establishing the business, there was a very exponential growth in terms of customers, revenue, online presence, and global reach among other metrics used to measure online business success. The company grew very fast and formed other great relationships with established companies within and without the industry. Within the first year of operation, visitors to the company’s website had reached an unprecedented figure of over thirty million. EBay sales for products of the company were well received, leading to a huge increase in sales and revenue within the first year of business. More clients from different regions of the earth sent in inquiries via email and social media, prompting the business to form strategic partnerships with other businesses in regions such as Asia, America and parts of Africa, with prospects of future expansion. Followers of the company on social media have also reached an all time high in recent weeks with many more still following the company. Despite this huge and unprecedented success in the first year of business, the company experienced both highs and lows in its operations. Success of the company owes a lot to strong partnerships between the company and other businesses such as eBay. The business plan and strategies also contributed to success because they provided a general guideline and pathway for decision making in the company (Randall, 2013). Challenges emerged in the business with regard to managing the high traffic on eBay and on the company’s website. The business did not have sufficient resources to meet all the demand and traffic especially during the first quarter of the year. There were limitations in terms of human resource, and technological challenges. In order to ensure progressive growth and success in the future, the business will implement many changes including establishing an e-commerce application on the company’s website. This will enable visitors to the website to make orders and purchases directly from the company’s website. The company will also increase its human resource by employing more people to help implement the new strategies of the company. References Jay N. (2007). The Complete Internet Marketer. US: Lulu. Joseph, T. S. (2007).EBay the Smart Way: Selling, Buying, and Profiting on the Web’s # 1 Auction Site. AMACOM Div American Mgmt Assn. Marc, A. (2011). The Pursuit of New Product Development: The Business Development process. Butterworth-Heinemann. Mariampolski, H. (2001). Qualitative Market Research: A Comprehensive Guide. Sage Publications. Millikan, L. E. (2001). "Cosmetology, cosmetics, cosmeceuticals: definitions and regulations." Clinics in dermatology 19(4): 371-374. Oksana, N. (2007). Online Business Sourcebook. Walter de Gruyter Randall C. (2013).The Everything Guide to Starting an Online Business: The latest Strategies and Advice on How to Start a Profitable Internet business. Everything Books Rhonda, A., Rhonda, M. A. (2003). The Successful Business Plan: Secrets & Strategies. The Planning Shop. Steve W. (2008). Selling on Ebay 101 for Part-time or Fulltime Income, beginner to Powerseller in 90 days. Stephen Weber. Winter, R. (2005). A Consumers Dictionary of Cosmetic Ingredients: Complete Information About the Harmful and Desirable Ingredients in Cosmetics. US: Three Rivers Press. Read More