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uBID.COM
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Essay Subject:
Analysis of the retail auction and e-commerce site.... More...
4 Pages / 900 Words
3 sources, 10 Citations, APA Format
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Paper Abstract:
Analysis of the retail auction and e-commerce cite. Discusses operations of the e-tailer. Selling brand-name merchandise at up to 70 % off the retail price by live-auction bidding. Sixteen different product categories. How the bidding works. Founding of the company. Its infrastructure. Revenues. Customer base. Need to make company more profitable.

Paper Introduction:
Background uBid.com is a leading retail auction and e-commerce site which offers a wide range of brand-name merchandise at up to 70 percent off the retail price by live-action bidding (ubid, 2002). They offer a rotating selection of over 12,000 brand name products from companies such as Compaq, Hewlett Packard, Sony, and Toshiba, and complete 11,000 auctions a day (Tillett, 2001). uBid.com lists 16 different product categories: computers, computer peripherals, computer components, home office, housewares, sports and hobbies, jewelry and gifts, accessories, off-lease computers, consumer electronics, digital cameras and videos, apparel and linens, home improvement items, collectibles, travel and events, and an "everything else" category (uBid, 2002).

Text of the Paper:
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They often buy overstocks or refurbisheditems. The winning bid is determined byprice, quantity ordered, and time of bid. Instead, they could have themanufacturer hold it and ship it directly to the customer. This is a different strategy to other e-tailers who try to find low-priced products and then sell to customersonline, still at prices well below retail. Perhaps they should cut down on the number ofauctions, and maybe stop handling low-end price items, so that they couldget the same income from a smaller number of products. It is based in Elk GroveVillage, Illinois, and uses a sophisticated proprietary infrastructure tohandle the large volume of customers it services (Battey, 1999). The vice president, Alan Cohen, predicts revenues of$5 million within two years, and plans to expand sales by growth inexisting business lines, and a new business line introduced in 2 1 -customer's auctioning off products they own.Strategies Like most e-tailers, uBid.com is not profitable (Tillett, 2 1). Bidders are notified by email if they have a winningor losing bid. Theirstrategy has also been to work quietly, not spending huge amounts onadvertising as other e-tailers have. (2 1, June). This would allowtheir computer needs to fit in with current technology. For most of its auctions, uBid.comhandles all the logistics itself: buying and storing inventory, shipping,handling credit card transactions, and handling customer service, and soacts as an outsourcers for many services and small businesses. 59. Theybelieve the core business will grow. Background uBid.com is a leading retail auction and e-commerce site which offersa wide range of brand-name merchandise at up to 7 percent off the retailprice by live-action bidding (ubid, 2 2). They arealready doing so by instituting the customer-to-customer auctions. The bidding for each product starts with a setminimum and maximum price, a closing date and time, and the opportunity tobuy the product outright at uBuyitnow. uBid.com has Preferred Partnersarrangements with uBid.com's approved businesses which enable them to listproducts and take advantage of their user base. (1999). It has a huge customer base, and so must find away to take advantage of this opportunity for making money. uBid.com was listed onthe Nasdaq in December, 1998 (Tillett, 2 1. uBid.com was founded inApril, 1997, and is a unit of publicly traded CMGI. Traditionally, uBid.com has bought goods at much lowerprices than consumers ever could. Auctions of brand-name products bring in 8 percent of uBid.com'srevenues, with the other 2 percent coming from smaller producers. Internet Week,p. 57. Site profile: www.ubid.com. Registered uBid.com userscan also sell products with no listing fee through uBid's Consumer Exchangeprogram. All bids are final, and cannot be cancelled. Sales tax is only charged to Illinois andTennessee residents. They are a customer-friendlybusiness. It had$482. Tillett, S. UBid.com makes a bid on success - Auctionhouse braces for growth with content, scalability upgrades. uBid.com (2 2).http://www.ubid.com Online auctioncompany and commerce site. Inattempts to make it pay, uBid.com is trying several new strategies, alongwith the old. PreferredPartners of uBid.com could also use their broad customer base to fill jobvacancies.Recommendations One thing uBid.com could do to make it more profitable is to havegoods shipped to customers directly from companies it buys from, ratherthan buying them first and having to hold them in inventory until sold.This would also cut down on the staff needed to handle all the merchandiseduring storage, shipping etc. They put a starting price on most of those products at $9, whichdraws many people to the site. In this way,the manufacturer would still be paid for the full shipment at the time ofuBid.com's purchase of it, but uBid.com would not have to take delivery. Strategies for the future include providing more productinformation and comparison tools; streaming educational videos to the siteso consumers can learn about products up for auction; and personalizing theauction experience: letting a regular user look at just three or foursuppliers per category when browsing, as well as expanding the role of thenew customer-to-customer auctions. References Battey, J. uBid.com issues its own credit card, and businessescan set up corporate accounts, since the site caters to large businesses aswell as individuals. uBid.com hopes that by being able to buy products atlow prices and stimulate demand through online auctions which drive upprices, they can turn a profit. As the technologyexpands, they could then increase their number of auctions again. Theauctions are run like traditional auctions. Add-on items can be ordered along with winning merchandise, such asbatteries, ink cartridges, etc., and items are shipped by standard means(air or surface) (uBid, 2 2). million revenues in its first year, $131 million in 1999, and $313million in 2 (Tillett, 2 1). uBid.com is having a problem with the computer logistics of handlingso many auctions each day. The low price brings in the bidders, whostart trying to outbid each other, and eventually drive the price up toreasonable levels. Although its stock price rose to $1 ashare when the company went public in 1998, it was down to $28 when CMGIbought it in 2 . InfoWorld, 21, p. Bidderscannot rebid on an item at a lower price than their original bid. uBid.com lists 16 different product categories: computers, computerperipherals, computer components, home office, housewares, sports andhobbies, jewelry and gifts, accessories, off-lease computers, consumerelectronics, digital cameras and videos, apparel and linens, homeimprovement items, collectibles, travel and events, and an "everythingelse" category (uBid, 2 2).Format At uBid.com, customers name the price they are willing to pay for aproduct (uBid, 2 2). Sincethey have relationships with many companies, particularly small businesses,perhaps they could have them use the site to take bids on small contractssuch as printing jobs, mailing, shipping, or promotions. Sometimes a reserve price is seton an item, or the bidding is stopped if an item is bought at uBuyitnow.Customers can track the status of their bids at "My Page," or can have a"Bid Butler" do their bidding for them: they set the maximum price they arewilling to pay for an item, and the butler keeps track of the auction andplaces bids for them. They offer a rotating selectionof over 12, brand name products from companies such as Compaq, HewlettPackard, Sony, and Toshiba, and complete 11, auctions a day (Tillett,2 1). They could agree to buy a certain amount ofmerchandise, but not take delivery. uBid.com has over two million site visitors per month and 12 , registered users, and has earned a reputation as one of the most resilientpure-play dotcoms (Tillett, 2 1; Battey, 1999). uBid.com appears to be one of the more successful e-tailers, but isstill not making a profit. Ubid.com is approved by the Better Business Bureau formeeting their Online standards.

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