Credit crunch amazon vs ebay

With the economy at one of the lowest levels that it has seen in recent years many are wondering what is going to happen next. The credit crunch in regards to Amazon vs. EBay is something that has everyone around the world wondering who will be the king and whether or not they will survive the impact the economy is having on them as well.

EBay has had decrease in profits during the fourth sector due to the flailing economy. Normally this would be the time they make the most profit gains as this quarter includes the Christmas holiday shopping period. But with this decrease in profits, EBay did show some growth in two of its major areas. They showed a 26% increase in revenue from SKYPE and an 11% increase in the revenue from Paypal. They are also anticipating that Paypal's revenue will increase even more with online merchants wanting payments either through it or by credit card. With the economy the way it is now, more and more people will be seeing the need to use Paypal as they will be unable to secure a credit card and thus be unable to pay for their online purchases in any other way.

Amazon, on the other hand has been still showing a profit. During the same time period, the fourth quarter they showed an increase of 9% in profits, despite the state of the economy worldwide. They have shown a steady increase in their profits by providing products of quality and affordability to consumers at a time when that is a major factor in their buying practices. Even though they are in the forefront right now this all may change, as EBay is in the process of making changes to the way that they are doing things.

In efforts to regain the poser as "king" of the online super sellers, EBay has been making modifications to the way that they sell things. They have given incentives to sellers encouraging them to make set prices for items as opposed to the auction style of selling in the past. EBay feels that the "buy it now" pricing will bring back a lot of the consumers that they had lost to Amazon. EBay also has lowered the upfront costs that they previously had, one of the largest complaints that sellers were making known to them.They are hoping that with these changes that they will be able to recover to the point that were at, and rise ahead even further. The credit crunch in regards to Amazon vs. EBay has meant that the two powers are running fast and furious to see who will be "king" of the online retailers. This we can see will be a power struggle that continues for years to come.
Linus Orakles
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