PayPal Slows for EBay

EBay owns three general business services, which are the Marketplace (EBay platform), payment (PayPal) and GSI commerce system. In the past quarters, reports have shown that PayPal and GSI had been expanding quicker than EBay Marketplace. As a result, PayPal’s performance leaves a bigger impact on the general performance of eBay. Through these mediums, EBay’s profit increased by 19%, and revenue increased by 14%. They are also able to attract users from one of their biggest competitors- Amazon.com. However, PayPal’s growth slows down as more competitors appear in the market, such as Intuit Inc and Square Inc. EBay attempts to restructure their system by changing sellers’ price structure and “listing-fees for many items in favor of a flat sales fee based on an item’s category.” This format appears to be similar to Amazon’s structure.

EBay’s dependence on PayPal to drive its revenue may become a problem in the future.  Also, Amazon’s business structure serves as a threat to EBay even though the two websites are based off of different vending methods.

 

Written By: Melody Mark

Source:

Bensinger, Greg. “PayPal Slows for EBay.” Wall Street Journal. Dow Jones & Company, 17 Apr. 2013. Web. 18 Apr. 2013.

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