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How Much Is Apple Worth?

As of October 2019, Apple was worth over trillion dollars. Compared to other tech giants like Amazon, valued at over $869B, Google valued at 863B and Facebook valued at over $530 billion, Apple is primarily a product company, which made 63% of its revenues from the iPhone in 2018.

Part of the GAFA companies
[image error]GAFA is an acronym for Google, Apple, Facebook, and Amazon. Those companies emerged in the 2010s as the most powerful American tech companies.
Apple value proposition
[image error]Apple is a tech giant, and as such, it encompasses a set of value propositions that make Apple’s brand recognized, among consumers. The three fundamental value propositions of Apple’s brand leverages on the “Think Different” motto; reliable tech devices for mass markets; and in 2019, Apple also started to emphasize more and more about privacy to differentiate from other tech giants.
Apple mission and vision
[image error]Apple mission is “to bringing the best user experience to its customers through its innovative hardware, software, and services.” And in a manifesto dated 2009 Tim Cook set the vision specified as “We believe that we are on the face of the earth to make great products and that’s not changing.”
Apple evolution
[image error]In this infographic, you can appreciate the evolution of Apple by looking at how its central products sales evolved in the decade 2008-18.
Apple business strategy
[image error]When looking at the Apple Business Model, it is easy to assume that it is solely a product company, which sells devices that are beautifully crafted. However, there would have been no success for the Mac without its OS operating system. There would not have been iPod success without iTunes. And no success for iPhones without the Apple Store. What’s next for Apple’s success?
Apple distribution strategy

[image error]

References:

Source Data Market Caps: Yahoo Finance.
Source Data Revenues and Breakdowns: Apple Annual Reports 2017,2018.

Other business model analyses:

The Power of Google Business Model in a Nutshell
How Does Google Make Money? It’s Not Just Advertising!
How Does DuckDuckGo Make Money? DuckDuckGo Business Model Explained
How Amazon Makes Money: Amazon Business Model in a Nutshell
How Does Netflix Make Money? Netflix Business Model Explained
How Does Spotify Make Money? Spotify Business Model In A Nutshell
The Trillion Dollar Company: Apple Business Model In A Nutshell
DuckDuckGo: The [Former] Solopreneur That Is Beating Google at Its Game

How Does Facebook Make Money? Facebook Hidden Revenue Business Model Explained

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Published on October 20, 2019 14:20

Resurrecting Marketing Strategy In A World Driven By Metrics

A marketing strategy is the “what” and “how” to build a sustainable value chain framed for a target customer. A powerful marketing strategy needs to be able to manufacture desire, amplify the underlying value proposition, and build a brand that feels unique in the mind of its customers.

How has marketing changed in the digital era?

Marketing has changed over the years, and it has undergone a profound change in the last two decades due to forces that have changed the business world.

Some of those forces can be summarized as:

Digitalization.
Globalization.
Technological Innovation.
Moore’s Law.
Business Model Innovation.

As we’ll see those forces have changed the way we do marketing. However, the underlying psychological forces that shape our minds are still the foundation of a powerful and effective marketing strategy.

And we’ll see how they affect and need to be taken into account, especially in today’s marketing, where engineering trying to rationalize it might make it ineffective.

The impact of digitalization on marketing strategy
[image error]A digital business model might be defined as a model that leverages digital technology to improve several aspects of an organization. From how customers interact, to how the value proposition is derived, or how monetization happens.

Digital businesses have become critical players in the marketplace, which has also, in part, changed the logic of business itself.

Where in the past, a good marketing strategy might have meant developing a good product or service. Nowadays, with the rise of customer-centric platforms, having must-have products is really the baseline.

In the era of mass-media marketing (driven by TV and Radio) it was possible to manufacture desire, by creating cultural stereotypes to generate demand for products.

While a few companies like Nike have successfully transitioned through the digital age, by using strategies like influencer marketing to stimulate the demand of its products, by leveraging on cultural memes.

Digital platforms, with a customer-centric approach, have changed the way we conceive marketing. Thus, a platform to be successful has to push as much as possible on customer experience through engineering and product development. Thus, the common mantra today is that if you can build a product sticky enough, people will get back.

However, while digital platforms have changed the way we can interact with potential customers. Better customer experience is indeed the domain of manufacturing design, and aligning those design with your brand.

In short, a brand that drives growth by the sheer force of engineering might gain traction in the short-term, but it might not be strong enough to survive in the long-run

In consumers’ industries, while offering lower prices, comparisons, and options are the ways in which digital platforms are mostly breaking down the traditional trade-off between value (you charge more by offering more) and cost advantage (you charge less by offering a standardized service), what can be defined as a blue ocean strategy.

Today, digital platforms can also offer more at a lower cost. That’s because digital platforms usually don’t own the assets they sell (a classic example is how Airbnb doesn’t own the homes it rents).

In this era, marketing becomes integrated more and more in product development, and engineering processes (disciplines like Growth Hacking look at breaking down the silos in traditional department structures so that engineers and marketers can work together as a growth team).

But it’s important to highlight that marketers are also required to be able to deeply understand the customers they want to talk to.

And as new tools for audience segmentation become available those same marketers can deliver the message to specific intents and smaller and smaller segments. But those messages need to be framed to be understood by the target audience.

In other words, marketers have powerful weapons which if used sparingly can have a big impact on a company’s long-term value.

Globalization’s impact on marketing strategy

Globalization has might have accelerated in the last two decades as well. A marketing strategy that doesn’t take into account globalization might be short-sighted.

A media business that publishes an article, which is an instant has the potential to reach hundreds of countries across the world, it has also to be able to deliver that message to each of those locations.

At the same time, the potential access to a global community might give the impression that distribution has become an easy game in the digital era. That is just that, an impression. Building up a proper distribution strategy is just as hard as it has always been.

A message can get easily lost into the Facebook algorithm. A piece of content properly written can get easily lost into Google’s ranking algorithms. And a product distributed across an existing platform can become easily commoditized (think of how users can easily compare products on Amazon).

In short, Globalization works as a double-edged sword, where on the one hand requires a deeper (not provincial) understanding of your potential audience.

While on the other hand, it requires a powerful distribution strategy to get your message across and make sure that in the billions of users available on the web you reach those few hundreds to which your message can resonate.

In this era, it is also important how to frame a message to make it fit the platform desired format. For instance, in an era where platforms like Google, Instagram, TikTok, and others compete for snippets of our attention, understanding what formats work best for each platform is a critical element to give the message maximum amplification.

Technological innovation and consumer behavior

If you haven’t realized it yet, technologies affect our behaviors or more precisely certain behaviors can be amplified through technologies. As a thought experiment, what’s the first thing you do in the morning, as soon as you open your eyes?

Chances are you’ll probably pick up your smartphone, to either go on social media or engage with someone in a digital manner. That might sound trivial. Yet just a couple of decades ago that was unthinkable.

One of the effects of those technologies is to change our habits and the way we do things. If we used to consume most content on a TV screen, now for younger generations might feel normal to consume content on devices that are a few inches wide.

That makes the experience different and also its perception. Armed with that the marketer needs to know how to deliver a message in the format that fits the medium and thus its audience.

That is why among the most effective marketing strategies, that of creating several formats to spread a message might work. For instance, if you wrote an article for the blog, if that article has proved successful why not make an audio version for that or a video that might get more easily shared on social media.

By repurposing the same content on several formats you can also fit it into several media and make sure you give people options to consume content as they like.

For instance, I personally love reading.

But I also realize not anyone does like reading, or find reading efficiently. Therefore, I also launched my own podcast and an online business school that can help people consume content at their own pace, and in the formats, they like the most.

Again if you’re a marketer you might want to create options for your audience. The foundation is great content. And if that content can be delivered in several formats, and delivered across different channels without it losing its intrinsic quality that you’re also creating more options for your audience.

In short, technological innovation changes the way people behave and consume content, thus the way we might need to communicate. But it also creates for us more opportunities to reach our desired audience.

But once again, you need to make sure not to forget that as a marketer you need to make the message compelling, and unique, so that the story told by your brand resonates.

Moore’s Law impact on marketing strategy

Gordon Moore, co-founder of Intel, in a paper, back in 1965 foresee how in the coming decade the numbers of components would double every year. Just to confirm this prediction a decade later, but this time the doubling rate would be every two years.

This heuristic would prove quite powerful. And this is also one of the reasons why computers kept becoming more and more powerful in the digital age. And that also affected the rise of certain business models.

For instance, before Netflix would be able to roll out the on-demand content consumption model its founder had in mind, the company had to wait a decade before technology would pick up to that.

But once it did, Netflix became a streaming content company in a blink of an eye and outside its optimistic forecasts.

When new technologies become mature enough they also enable marketers new ways to communicate, which makes more and more options available. That availability of options might make markets lose focus and dilute their strategy.

However, a focused marketer can take advantage of those new media to spread the message effectively.

Business model innovation impact on marketing strategy

The web-enabled new ways of doing business. Business modeling once a sleepy beast, it woke up suddenly when the web became commercially viable. Companies like Google and Amazon proved that by building tech empires.

The most important takeaway for business model innovation is how it demands a new business playbook. The web wasn’t just a new distribution or marketing channel. It required a new mindset.

While using the same marketing strategy and bring it on several channels might amplify the message. Its impact on your business might be limited in the long-run.

As with a new business playbook, you would need also a fresh perspective when it comes to marketing strategy.

For instance, take the case of a platform business model, which relies on network effects to grow. A marketer to enable a successful strategy should execute that on top of the platform developed by the company’s engineering team.

While marketers need to know how to work with engineers to build growth tools that make the brand go viral. Those same marketers also need to make sure to preserve their discipline by keeping creativity at the center.

Creativity is about loosely held assumptions, tested quickly, and sometimes with what might seem to engineers as “clumsiness” and as counterintuitive, yet for that reason effective.

Marketing strategy vs. marketing plan

From a marketing strategy, a marketing plan can be derived. However, where the marketing strategy might be defined as the “what” of an organization, a marketing plan is the “how-to” get that marketing strategy into action.

Thus, a marketing plan takes the form of a document laying to the activities to undertake in the short, medium-term to implement and execute a marketing strategy.

Therefore, a marketing strategy will have a broader understanding and a long-term view compared to a marketing plan. The marketing strategy allows the creation of a value proposition and all the elements that characterize a brand, which by nature have a longer life span.

Indeed, while a company might change its essential elements and value proposition to adapt to market changes, those market changes depending on the industry might happen every few years to a decade.

Therefore, the primary difference between the marketing strategy and the marketing plan can be generalized to the broader difference between a strategy and a plan. The strategy informs the “what” and investigates the “why.” A plan is all about the “how-to” get there.

From the “what” and “how” the implementation and execution phase takes traction. Indeed, if you had the proper strategy and derived from it an adequate plan, this should make it way easier to take action.

Key forces behind an effective marketing strategy

A marketing strategy and a marketing plan might dissolve to the same primary functions. In my opinion, a marketing strategy is driven by a few key forces.

Focused but authentic

In many cases, the failure of a strategy might be due to a lack of focus. A marketing strategy informs a marketing plan that narrows down its focus to a target that can be hit with the maximum precision.

Rather than boil the ocean, a good marketing strategy will allow you to identify the small pond where you can be a big fish. Once you’ve dominated that small pond, you can move to a bigger one.

This kind of approach works for startups and companies with a minimum marketing budget. Once you scale, and you have a substantial marketing budget, that is when it becomes critical to manufacturing desire.

Being focused doesn’t mean you don’t have to work on your brand story. Quite the opposite. As you’re a small player you won’t need to spend huge marketing budgets for your story to be appreciated by your potential audience.

Large companies and tech giants need to spend billions on distribution and to make millions or billions of people “believe” their brand story.

Companies like Google and Amazon seemingly engineering-driven spent respectively $16.3 billion in sales and marketing and $13.8 billion in marketing alone for 2018.

As a niche player, you can be authentic, as your values, your organization values, and your customers’ values are aligned.

Specific but flexible

A marketing plan, derived from a focused marketing strategy should have specific goals and actions.

That is also why often marketing plans include situation analyses (like SWOT). Also, you want to be very specific in identifying a target market. And you want to make sure to set up clear objectives.

However, flexibility is essential, as actions identified might not work out in the real world, you want to allow tests, experiments, and actions that have a wide spectrum, as you might be surprised to find out that something completely counter-intuitive works.

Measurable but not metric-enslaved

Metrics are helpful to assess whether a strategy is working or not. However, it’s important not to fall into measuring vanity metrics (metrics that don’t have any impact on the business) or misleading metrics.

Indeed, each time you’re using a new metric you need to make sure it impacts the business. For that matter, two or three key metrics might do the job, rather than having dozens of useless metrics.

At the same time, even a simpler approach where you measure impact (a 10X approach on results for tests and experiments you perform) might solve any doubt on whether or not a strategy is working.

What other threats you might want to be aware of?

Beware of the “data scientist mindset” (do not try to make marketing too “SMART”)

In a digital world, where, so far engineering and programming are the protagonists, marketing becomes relegated to being S.M.A.R.T. (specific, measurable, attainable, relevant and timely), as marketers try to become data scientists.

Those approaches and methodologies try to reduce marketing to a linear process to follow. Yet human behavior, the pillar of any marketing activity, is not linear. It follows a logic that goes beyond logic itself.

In an interview for MarketingWeek, sports brand’s global media director, Simon Peel explained how Adidas overinvested in digital advertising channels, as those were easily to track in terms of performance.

In short, Adidas, like many other companies assumed that digital channels, as trackable would enable it to drive most of its sales.

Yet by looking at the data with a more holistic approach, Adidas found out that in reality was the brand activities that drove Adidas sales across wholesale, retail and e-commerce. As Simon Peel highlighted for MarketingWeek:

The reason for that is short-termism because we are trying to grow sales very quickly,

And he also added:

We had a problem that we were focusing on the wrong metrics, the short-term, because we have fiduciary responsibility to shareholders.

Adidas had used an attribution model borrowed from digital platforms (like Goole Ads, or Facebook Ads) which primarily tracked the last mile the consumer wen through, as this is the easiest to track, which led to short-termism.

That doesn’t mean digital channels can’t be used to build a brand, but when you focus on the wrong metrics (most of the metrics which are easily available to measurement) that is how your marketing becomes ineffective, irrelevant, and your brand gets diluted.

As such, the great marketer will need to treasure creativity as the most important asset. Where most marketers in the digital world convert in data scientists, those that keep an artistic profile will make a difference in the business world.

Marketers are persuaders

It might sound like an exaggeration, and after all, some digital marketing channels (take a technical marketing activity, like SEO) might not seem suited to generate dreams and drive action. However, you don’t need to lose focus on what marketing is.

On that Seth Godin can help us:

If you need to persuade someone to take action, you’re doing marketing.

Distribution is the volume of your message

In order for a message to be heard it needs to be amplified. Distribution is the volume. While in many cases you don’t need a higher volume to make your message resonate (sometimes whispered messages might work more effectively).

In a crowded space, you have two options to increase the volume or change the frequency. If you don’t have a choice you might want to increase the volume. If you do have a choice it’s important to find the distribution channel that can vehicle your message effectively.

The Context is the message

A marketing message to work has to be in fit with the context. A message that makes sense in a context, might not in another. Understanding the context in which your audience is when experiencing the message is critical.

That is why today’s technology is powerful. It enables marketers to feel the context of the audience. Where mass media required marketers to frame messages that could be compelling for all, but for such reason ineffective. Today’s marketers can frame a message to make it resonate.

Perspective and frame of mind

In life, perspective is all we got. The same event happening to different people, interpreted – thus framed in a different way, can bring wholly different outcomes. There might be a few things that are objectively bad.

For all the rest perspective and framing help us go through anything. As a marketer, you have the power of framing in your hands. If you know how to use it, you can help your customers frame their life for the better, that is how you become a source of inspiration for them. Framing though is a powerful weapon, and as a marketer, you must use it ethically!

Types of marketing strategies and channels

There are as many types of marketing strategies as businesses out there. However, we’ll focus here on a primary marketing strategy: digital marketing.

Digital marketing consists of taking actions and crafting a value proposition that gets delivered via digital devices (smartphones, computers, and any other digital device).

Within digital marketing, there are many other types of marketing channels to experiment. For instance, in the Bullseye framework, and in the book Traction, Gabriel Weinberg highlights 19 primary channels for creating a distribution, delivering your message and execute your marketing strategy.

In the book, these are the identified 19 channels for growth:

Targeting Blogs
Publicity
Unconventional PR
Search Engine Marketing
Social and Display Ads
Offline Ads
Search Engine Optimization
Content Marketing
Email Marketing
Viral Marketing
Engineering as Marketing
Business Development
Sales
Affiliate Programs
Existing Platforms
Trade Shows
Offline Events
Speaking Engagements
Community Building

Those are just some of the types of existing channels and I’m sure that we can find several classification methods, and lists.

Byt the key point here is about making sure to communicate properly your value proposition and in a way that gets through your desired audience.

Each of these types of marketing requires a specific strategy and execution. However, it is important not to get bogged down in details and focus on the types of marketing that can connect your business to its customers.

Business models as marketing strategies

On this blog, we discussed several business models. For instance, the TOMS one-for-one business model is also a marketing strategy. As its value proposition is delivered through its business model.

Also, Brunello Cucinelli Humanistic Enterprise isn’t only a business model but a marketing strategy. That shouldn’t surprise you, as among the critical elements of a business model there is its value proposition and how it gets delivered.

Also Amazon cash machine business model made it possible for the company to offer a wide variety of goods at a lower price, while still generating cash to sustain and quickly grow its operations.

And Apple reversed razor and blade allowed it to make its beautifully crafted devices, like the iPhone, not only perceived as luxury items but also extremely useful, with its iTunes and App Store.

Other companies, like Google hidden revenue generation, has made it possible to deliver a free search engine to billion of users while monetizing via advertising.

Key takeaway

Marketing is changing and it’s is getting shaped by forces such as digitalization, globalization and business model innovation. That also implies an understanding of the current landscape to anticipate how the business world might be changing as well.

For that matter, a proper marketing strategy has to be able to inform a marketing plan that helps a company to focus on a target market and conquer it, quickly.

However, marketing is primarily about understanding hidden psychological levers, to manufacture desires, and build a strong brand that is unique for your tribe.

Marketers that lose sight of that are leaving immense opportunities to build a valuable brand that drives change for its tribe.

Business resources:

What Is a Business Model? 30 Successful Types of Business Models You Need to Know
The Complete Guide To Business Development
Business Strategy: Definition, Examples, And Case Studies
What Is a Business Model Canvas? Business Model Canvas Explained
Blitzscaling Business Model Innovation Canvas In A Nutshell
What Is a Value Proposition? Value Proposition Canvas Explained
What Is a Lean Startup Canvas? Lean Startup Canvas Explained
What Is Market Segmentation? the Ultimate Guide to Market Segmentation
Marketing Strategy: Definition, Types, And Examples
Marketing vs. Sales: How to Use Sales Processes to Grow Your Business
How To Write A Mission Statement
What is Growth Hacking?
Growth Hacking Canvas: A Glance At The Tools To Generate Growth Ideas

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Published on October 19, 2019 15:02

How Big Is Google?

With 98,771 full-time employees in 2018, Google made over $136 billion in revenues. $116 came from advertising alone. Google also spent $110 billion in operating costs. Over $21 billion went toward R&D (15.7% of its revenues) and $16 billion in Sales and Marketing (%12 of its revenues).

What’s the Google (search engine) key monetization strategy?

A hidden revenue generation business model keeps users out of the equation, while it lets other parties finance – in part or entirely – the product or service offered. This kind of model works if the value proposition is appealing to several stakeholders.

For instance, Google has created a sustainable business model based on hidden revenue generation, by creating a compelling value proposition for businesses and publishers. The former can bid on keywords and generate sales through targeted ads. The latter can effectively monetize their content.

When Google went public in 2004, Larry Page and Sergey Brin put together a letter which clarified:

Sergey and I founded Google because we believed we could provide an important service to the world-instantly delivering relevant information on virtually any topic. Serving our end users is at the heart of what we do and remains our number one priority.

Our goal is to develop services that significantly improve the lives of as many people as possible. In pursuing this goal, we may do things that we believe have a positive impact on the world, even if the near term financial returns are not obvious. For example, we make our services as widely available as we can by supporting over 90 languages and by providing most services for free. Advertising is our principal source of revenue, and the ads we provide are relevant and useful rather than intrusive and annoying. We strive to provide users with great commercial information. (Source: abc.xyz)

You might think that since Google is the best search engine out there, that is why it makes 88% of its revenue from advertising. However, for how a marvelous Google search algorithm is, what makes Google the tech giant that is today; is its business model.

AdWords and AdSense together create a win-win-win. Companies can sponsor their products for much cheaper, and track their results with no effort.

Online publishers can easily monetize – something is better than nothing – their content. Users get relevant answers to any question they might have. A great product is a little part of the equation. The rest is about business modeling!

To make money Google has to spend money. That is why an important metric to look at to understand the efficiency of the Google business model is its TAC.

TAC stands for traffic acquisition costs, and that is the rate to which Google has to spend resources on the percentage of its revenues to acquire traffic.

Indeed, the TAC Rate shows Google’s percentage of revenues spent toward earning traffic toward its pages, and it points out the traffic Google acquires from its network members.

In 2017 Google recorded a TAC rate on Network Members of 71.9% while the Google Properties TAX Rate was 11.6%.

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Published on October 19, 2019 03:49

How Big Is The Digital Advertising Market

According to eMarketer, in the US alone, digital advertising spending will be around $129 billion in 2019. According to FourWeekMBA analyses, within this market, the most significant players are companies like Google, Facebook, Amazon, Twitter And Microsoft‘s Bing with a combined $190 billion revenue from advertising in 2018.

A glance at the digital advertising market and its key players

($116 billion in 2018 from search advertising), Facebook (over $55 billion in advertising revenues in 2018), Amazon (over $10 billion in 2018 from product advertising), Twitter (with $2.6 billion in advertising in 2018), and Microsoft‘s Bing (search advertising for about $7 billion in 2018)

Google
[image error]Google generated over $116 billion from advertising revenues in 2018, which represented 85% of its total revenues. Of those revenues over 70% came from traffic via Google main properties (Google search engine, YouTube, Gmail, and others). Google’s main properties are monetized primary via a cost-per-click mechanism. Network members sites are primarily monetized on a cost-per-impression basis. Google also spent over $26 billion in 2018 to sustain its traffic on both its properties and as a revenue-share mechanism with its network members (AdSense and AdMob).
Amazon
[image error]Amazon more than doubled its advertising revenues from the first nine months of 2017, compared to 2018. Indeed, the revenues went from $2.92 billion in 2018 to $6.72 billion in 2018.
Compared to Facebook $38.37 billion and Google $83.68 billion for the same period, Amazon is still a small player. However, if we take into account that Amazon runs a diversified business model, with several revenue streams, it also gives the company more space to experiment with advertising!
Facebook

[image error]

In 2018 Facebook revenues came mostly from advertising. And within its advertising revenues, most of it came from mobile. We can’t know for sure the breakdown of revenues between the several Facebook Inc. products (the two major products are Facebook and Instagram) but we can assume that a good chunk of this revenues is coming from Instangram.

Microsoft’s Bing
[image error]Microsoft has a diversified business model spanning across Office products, Windows, Gaming (Xbox), Search Advertising (Bing), Hardware, LinkedIn, Cloud and more. With its search engine, Bing, that Microsoft integrated also in its key products the company made around $7 billion in 2018.
Twitter
[image error]Twitter is a platform business model, monetizing the attention of its users in two ways: advertising and data licensing. In 2018, advertising represented 86% of its revenue at over $2.6 billion. And data licensing represented over $424 million primarily related to enterprise clients using data for their analyses.

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Published on October 19, 2019 03:08

Amazon SEO: 5 Tactics To Grow Your Business On Top Of Amazon

Generating sales on Amazon is the ultimate goal of every online merchant. Amazon stands as the unchallenged e-commerce behemoth, accounting for 13.7% of global e-commerce market share and 52% of the US.

Ecommerce market share. While every online vendor wishes to be a part of the rising star, selling on it comes with certain challenges that everyone may not be prepared for.

When it comes to selling on Amazon, there are but two key determinants towards the merchant’s online success, bringing traffic towards the site and then converting the traffic into sales.

In this article, we take the opportunity of sharing 5 key tips that every online merchant can use to increase sales on Amazon.

Create a Great Listing Page

Getting traffic from your listings is good, but converting them into sales is the next big task. Using attractive web copy build from persuasive text is a great tactic to engage your customers and stimulate purchase decisions.

Using compelling catchphrases, informative descriptions, and product details that highlight your product’s value proposition will help you convert your customer. Since today’s customers share a very short span of time on online sites, you need to make sure you get the most of it by showing the best of what you have to offer.

Good content helps in engaging customers, giving them reasons to stick around, and encouraging them to explore your products.

Similarly, visual content such as images, videos, infographics, animations, and other visual elements play a central role in supplementing that engagement. As a matter of fact, customers have been found to respond faster to good images than plain textual information.

To leverage this, make sure to use HD images with zoom options so customers can explore your product thoroughly. You can also use infographics to explain the benefits of using your products through statistical data and graphical representations.

Secure as Many Positive Reviews as You Can

Securing reviews are sadly the most neglected practices of improving listings on Amazon. Fortunately, they are the most effective as well. Getting reviews on your product listings has two major benefits.

It improves your rankings on Amazon search results, bringing.
They come with social proof which improves your conversion rate.

Since building reviews requires effort, you cannot rely entirely on the customer to get positive feedback on your listings.

To get the feedback your page needs to stimulate conversions, you must make follow-ups on your customers and offer them incentives to secure a maximum number of reviews. Doing this pro-actively will get a great review section that resonates with your product appeal.

To streamline this process, you can send emails to ask for reviews instead of doing it individually for each customer. although approaching your customers personally is the best way to go about, you cannot rely on it forever and you will at some point be forced to automate it.

Understand the users intent

To bring more traffic toward your product pages, you must pay attention to ranking your listings high on Amazon. Rankings directly compliment your conversions and sales rate.

Amazon listings play a deciding role in it by giving the right space, traffic, and exposure to your keyword to generate sales.

While rankings products, keywords play an imperative role in improving your website SEO and generating organic results. In order to make their worth, you must research your target niche and include relevant and purposeful keywords.

Popular keywords help in thrusting your rankings since they already share high search volume.

Using them strategically with your products can yield great results and effectively boost your Amazon listings. You can use Google’s Keyword Planner, Ahrefs Tool or SEM rush to vet your keywords.

Leverage from Customer Psychology

Amazon has always remained a great platform to learn about new markets and explore changing customer behaviors. This environment that Amazon promotes is greatly attributed to the abundance of social proof present in it.

Social proof is a major stimulant in the conversion process and deeply links with human psychology. In principle, customers will always seek the experience of other customers who have used the product before making a purchase decision.

This relates to the human tendency of seeking guidance from other members of the same society before starting a pursuit. Similarly, a customer will always prefer buying from a vendor whose products are being recommended by other customers.

This is so powerful that can triumph factors such as brand loyalty, product superiority, and even price comparison.

The simplest way to replicate this on Amazon is to add proof of your product success by mentioning the number of sales, reviews, commendations, or even shares in your listing’s copy. For example, you can design a catchphrase quoting,

“Join the 10+ million community of customers using this product” or add a statistical quote such as “over 7000 positive reviews.”

Improve Your Pricing Strategy

Product pricing is another key part of digital marketing that often gets overlooked. Showing your prices transparently not only helps customers get the measure of your brand, but also engenders trust and confidence in them.

Setting a price that covers your costs without slashing your profit margin is highly crucial. An overly low price is just as detrimental to your conversions as an inflated price.

Therefore, balancing your price based on factors on the ground is important not just for your sales, but also your brand image.

On Amazon this demand special focus since competition is high and new products can quickly get the shovel if they do not meet their mark.

To make sure your prices are on point, first explore your target segment, learn about their purchasing power, their preferences, and build a value-based pricing strategy that does not establish conflict with your sales strategy.

Once you get a clear perception of your customer, you can successfully set enticing pricing for your products on Amazon. Below is a standard formula Amazon merchants use to set their pricing

TEV (True Economic Value) = Cost of the best alternative + Value of performance differential

Business resources:

What Is a Business Model? 30 Successful Types of Business Models You Need to Know
The Complete Guide To Business Development
Business Strategy: Definition, Examples, And Case Studies
What Is a Business Model Canvas? Business Model Canvas Explained
Blitzscaling Business Model Innovation Canvas In A Nutshell
What Is a Value Proposition? Value Proposition Canvas Explained
What Is a Lean Startup Canvas? Lean Startup Canvas Explained
What Is Market Segmentation? the Ultimate Guide to Market Segmentation
Marketing Strategy: Definition, Types, And Examples
Marketing vs. Sales: How to Use Sales Processes to Grow Your Business
How To Write A Mission Statement
What is Growth Hacking?
Growth Hacking Canvas: A Glance At The Tools To Generate Growth Ideas

The post Amazon SEO: 5 Tactics To Grow Your Business On Top Of Amazon appeared first on FourWeekMBA.

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Published on October 18, 2019 12:02

Revealed Preference: What Do People Really Want?

Revealed preference, is a theory offered by the American economist Paul Samuelson in 1938. The theory asserts that consumers’ behavior – assuming a constant income and item’s price – is the best indicator of their hidden preferences. In short, that is how people reveal what they really want.

For the sake of this article, we’ll leave out the pure economics definition of revealed preferences to insert it into a new theory of rationality. Let’s start from Nassim Nicholas Taleb‘s view of revealed preferences.

Taleb’s view on revealed preferences

The axiom of revelation of preferencesstates the following: you will not have an idea about what people really think, what predicts people’s actions, merely by asking them –they themselves don’t know.

As highlighted in his article “How to be Rational about Rationality” revealed preferences move around three axioms:

Judging people on their beliefs is not scientific
There is no such thing as “rationality” of a belief, there is rationality of action
The rationality of an action can only be judged by evolutionary considerations

This theory of rationality moves around a few key points which can shift your perspective and make you a better business person.

Science and scientism

As science has been so successful in certain fields (take physics) over the centuries, we matured the belief that scientific principles developed by hard sciences could be applied to soft sciences, or to human nature in general. This beliefe brought to the rise of scientism, or the core belief that things could be stripped from their “irrational” part to make them rational.

Here rationality, though, is measured in terms of beliefs rather than the actions that come from those beliefs. And this is the primary fallacy scientism falls. A person imbued into scientism will criticize religion, yet she will believe in economic theories that narrow down reality to model that is not only far from it, but that from the collective standpoint might have negative consequences for society overall.

Domain dependence

Understanding that the scientific method can be used in certain fields, but it loses value in other domains, is critical. In the realm of human, messy affairs, it is essential to have a different mindset. While experimentation, it’s still the key, it will have a different meaning.

Experimentation won’t be tied to a narrow domain, but close to creativity and the ability to draw ideas from fields and domains that are far off from the one where you’re trying to apply a solution. Thus, it will require a broad range of creativity, a lot of experimentation, and the ability to have a broad spectrum of experiments.

Rationality based on survival of fit actions

Your eyes are not sensors aimed at getting the electromagnetic spectrum of reality. Their job description is not to produce the most accurate scientific representation of reality; rather the most useful one for survival.

Still, in his article “How to be Rational about Rationality,” Taleb highlights how eyes are wired to survival rather than giving an accurate or scientific representation of reality.

This view highlights how rationality is not about logical explanations. As many things in the real messy world can’t be explained, as there is a hidden meaning, which might not be revealed. We need to trust more the subconscious side, which calls up to look us for actions that survive time, rather than explanations and how those might fit the current context or prevailing intellectual view.

Skin in the game

What matters, in the end, is what they pay for goods, not what they say they “think” about them, or what are the reasons they give you or themselves for that. (Think about it: revelation of preferences is skin in the game).

Another core concept connected to this revealed preference view is that of skin in the game or the fact that in order to reveal what people really want, one way is to have them pay for something, as this implies an action, which isn’t frictionless, thus if performed might reveal strong subconscious preferences, hard to explain rationally, but work as a strong hidden signal.

Beliefs are cheap; actions do cost

For beliefs are … cheap talk. A foundational principle of decision theory (and one that is at the basis of neoclassical economics, rational choice, and similar disciplines) is that what goes on in the head of people isn’t the business of science. First, what they think may not be measurable enough to lend itself to some scientific investigation. Second, it is not testable. Finally, there may be some type of a translation mechanism too hard for us to understand, with distortions at the level of the process that are actually necessary for think to work.

For the sake of understanding this theory, it’s essential to look at actions!

Key takeaways

Revealed preferences can help us uncover what people really want.
Revealed preferences are about what people do when they are skin in the game.
It’s also about rationality meant as the survival of actions that gain us fit in the real-world.
It’s not about elegant theories or beliefs, but it’s about those beliefs that lead to actions that make the collective survive.
In short, that is about uncovering hidden cues from the subconscious mind, so that we avoid to attach rationality to things in hindsight.

Other business resources:

What Is a Business Model? 30 Successful Types of Business Models You Need to Know
The Complete Guide To Business Development
Business Strategy: Definition, Examples, And Case Studies
What Is a Business Model Canvas? Business Model Canvas Explained
Blitzscaling Business Model Innovation Canvas In A Nutshell
What Is a Value Proposition? Value Proposition Canvas Explained
What Is a Lean Startup Canvas? Lean Startup Canvas Explained
What Is Market Segmentation? the Ultimate Guide to Market Segmentation
Marketing Strategy: Definition, Types, And Examples
Marketing vs. Sales: How to Use Sales Processes to Grow Your Business
How To Write A Mission Statement
What is Growth Hacking?
Growth Hacking Canvas: A Glance At The Tools To Generate Growth Ideas

The post Revealed Preference: What Do People Really Want? appeared first on FourWeekMBA.

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Published on October 07, 2019 13:49

How Does IBM Make Money? IBM Business Model In A Nutshell

Started in 1911 as Computing-Tabulating-Recording Company (CTR), called then International Business Machines by 1924. IBM primarily makes money by five segments (cognitive solutions, global business services, technology services, and cloud platforms, systems, and global financing) with also innovative products such as IBM Watson and IBM Blockchain.

IBM history in a nutshell

While in the early 1920s, the company acquired the name that would stick up to these days, IBM operated already by the late 1800s as tabulating equipment for the US census, as reported by computerhistory.org.

Its founder, Herman Hollerith, was an inventor, who came up with the tabulating punched-card who enabled automated computations. Ever since IBM became a major player, who created computers for scientific research and business, during the 1960s.

While IBM would play catch up during the PC era, it pretty much kept its position as a solid business. In the 1990s, IBM risked being spun off in several units and shut its doors until it got turned around.

As reported by NYTimes in 1995:

The International Business Machines Corporation reported its first profitable year since 1990 yesterday, with fourth-quarter earnings more than tripling to a level well above Wall Street analysts’ estimates.

It is important to highlight those were very competitive years, as the same article from the NY Times reported:

After being roughly tied with Apple Computer Inc. in 1993 for the title of No. 1 seller of personal computers in the United States, I.B.M. slipped in 1994, falling behind the Compaq Computer Corporation, Apple and Packard Bell Inc. to fourth place.

According to the article, the fall of the company was due to a lack of focus, too many unsuccessful models, and a bad inventory management system. We might argue indeed that it’s not possible for a company to stay on top of its game for so long.

Yet IBM turned around, and it’s still a strong company as of today.

IBM business model in a nutshell

IBM is one of those companies which is interesting to look at, as it managed to survive wave after wave of IT innovation, and yet, as of today, while playing a role in the enterprise space, IBM is still an important tech player (although not many realize that).

How does IBM make money?

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IBM Annual Report 2018

IBM has five primary lines that make money for the company at very high gross margins:

Cognitive solutions.
Global business services.
Technology services and cloud platforms.
Systems.
And Global financing.

Cognitive solutions

Cognitive Solutions’ revenue of $18,481 in 2018 provides Solutions Software, led by the company’s analytics and security platforms. Within analytics, the company offers a set of products from the Db2 portfolio, including analytics appliances and IBM Cloud Private for Data.

Other services part of that are integrated security and services solutions, like Watson Health and Watson Media & Weather.

Global business services

Global Business Services revenue of $16,817 in 2018, which comprises consulting, led by key offerings in a digital and cloud application. New consulting offerings comprise the company’s digital strategy, like Digital Commerce and CRM offerings, and accelerated growth in next-generation enterprise applications, led by strong demand for consulting and implementation services.

Technology services & cloud platforms

Technology Services & Cloud Platforms revenue of $34,462 in 2018.

IBM innovations

IBM claims to be the enterprise AI leader. This claim is supported by solutions like IBM Watson, which is a key AI tool used by decision-maker in the business world, which comprises several key use cases:

AI for customer service.
Natural language processing.
Build a chatbot.
Explainable AI.
AI for enterprise search.
And AI for contract governance.

As explained on the IBM Watson website, with the AI assistant, you can do things like:

Build a full-service virtual assistant that responds to customers directly on the front end and provides employees and agents with information and resources they need on the back end. Seamlessly automate tasks – from addressing customer requests to guiding employees through internal processes – to allow your teams to focus on higher value work. This is AI customer service with Watson Assistant.

Or use Natural language processing capabilities to:

Natural language processing (NLP) is the parsing and semantic interpretation of text, which allows systems to learn, analyze, and understand human language. With Watson’s suite of NLP offerings, including Watson Natural Language Understanding (NLU), you can surface concepts, categories, sentiment, and emotion, and apply knowledge of unique entities in your industry to your data, no matter where it lives.

Or how the IBM Blockchain helps enterprise customers to build supply chains.

Key takeaways

Born around the 1920s, IBM was previously called Computing-Tabulating-Recording Company and it came to life thanks to the inventions of its founder, Herman Hollerith, who came up with tabulating machines for the US Census.
Later IBM would be able to revolutionize and dominate the IT space with its family of computers that helped foster scientific research and business.
At the same time, IBM lost traction during the 1990s when the PC industry was getting dominated by other key players.
The company turned around during the late 1990s and it managed to renew its business model.
While IBM still mostly operates in the enterprise space, it managed to innovate in several areas by offering enterprise tools (like IBM Watson and IBM Blockchain) that power up many businesses.

Business resources:

What Is a Business Model? 30 Successful Types of Business Models You Need to Know
The Complete Guide To Business Development
Business Strategy: Definition, Examples, And Case Studies
What Is a Business Model Canvas? Business Model Canvas Explained
Blitzscaling Business Model Innovation Canvas In A Nutshell
What Is a Value Proposition? Value Proposition Canvas Explained
What Is a Lean Startup Canvas? Lean Startup Canvas Explained
What Is Market Segmentation? the Ultimate Guide to Market Segmentation
Marketing Strategy: Definition, Types, And Examples
Marketing vs. Sales: How to Use Sales Processes to Grow Your Business
How To Write A Mission Statement
What is Growth Hacking?
Growth Hacking Canvas: A Glance At The Tools To Generate Growth Ideas

Other business model analyses:

Netflix Business Model
Starbucks Business Model
LinkedIn Business Model
Google Business Model
Uber Business Model
Lyft Business Model
Robinhood Business Model
Nike Business Model
DuckDuckGo Business Model
ALDI Business Model
Apple Business Model
TOMS Business Model
Slack Business Model
Fiverr Business model
Pinterest Business Model
Telegram Business Model
TripAdvisor Business Model
Booking Business Model

The post How Does IBM Make Money? IBM Business Model In A Nutshell appeared first on FourWeekMBA.

View more on Gennaro Cuofano's website »

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Published on October 07, 2019 10:55

How Does Intel Make Money? Intel Business Model In A Nutshell

Founded in 1968 by Gordon Moore, which would go on to formulate one of the most reliable laws in technology, Intel has been able to survive and thrive through several waves of technology. Intel is transitioning from becoming a PC-centric company to becoming a data-centric company.

Intel: from PC-centric to data-centric

Around 2013 Intel set a plan and strategy to transform itself from a PC-centric to a data-centric company. By 2018 this objective was almost accomplished at least from a revenues standpoint:

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The company generated around 37 billion dollars from PC-centric products. While it made nearly $34 billion from data-centric products.

Intel innovation strategy primarily moves around investments in advanced manufacturing processes and packaging, architecture, interconnects, and embedded security features, as part of Intel’s efforts to be the leading end-to-end platform provider.

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Intel Annual Report 2018

As of 2018, 32% of Intel revenues came from its essential data-centric products.

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Intel Annual Report 2018

While its PC-centric products represented around 52% of its revenues.

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Intel Annual Report 2018

Intel portfolio comprises products that span across platform products, to accelerators and memory and storage components.

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Intel Annual Report 2018

And Intel moves around an end-to-end strategy, where it can move across the whole integrated chain. And by offering products in several innovation areas such as cloud computing, 5G network, AI and analytics, edge computing, and more.

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Intel Annual Report 2018

While Intel is successfully transitioning its transformation to become a data-centric company, from a purely financial standpoint, the company is highly profitable. With over $70 billion revenues in 2018 and over $21 billion in net income in 2018.

Business resources:

What Is a Business Model? 30 Successful Types of Business Models You Need to Know
The Complete Guide To Business Development
Business Strategy: Definition, Examples, And Case Studies
What Is a Business Model Canvas? Business Model Canvas Explained
Blitzscaling Business Model Innovation Canvas In A Nutshell
What Is a Value Proposition? Value Proposition Canvas Explained
What Is a Lean Startup Canvas? Lean Startup Canvas Explained
What Is Market Segmentation? the Ultimate Guide to Market Segmentation
Marketing Strategy: Definition, Types, And Examples
Marketing vs. Sales: How to Use Sales Processes to Grow Your Business
How To Write A Mission Statement
What is Growth Hacking?
Growth Hacking Canvas: A Glance At The Tools To Generate Growth Ideas

Other business model analyses:

Netflix Business Model
Starbucks Business Model
LinkedIn Business Model
Google Business Model
Uber Business Model
Lyft Business Model
Robinhood Business Model
Nike Business Model
DuckDuckGo Business Model
ALDI Business Model
Apple Business Model
TOMS Business Model
Slack Business Model
Fiverr Business model
Pinterest Business Model
Telegram Business Model
TripAdvisor Business Model
Booking Business Model

The post How Does Intel Make Money? Intel Business Model In A Nutshell appeared first on FourWeekMBA.

View more on Gennaro Cuofano's website »

Like • 0 comments • flag

Published on October 06, 2019 15:44

How Does eBay Make Money? eBay Business Model In A Nutshell

eBay core business is a platform business model that makes money from transaction fees happening through its marketplaces (eBay and StubHub). eBay also makes money through advertising on its classifieds marketplace and other services. The company primarily makes money by charging fees on successfully closed transactions.

eBay origin story

As reported in its financial statements, in 2018, eBay had an active buyer base of 179 million, it drove $95 billion in Global Merchandise Volume (the volume of successful transactions happened on the platform and it generated over $2.5 billion in net income.

eBay Inc. was formed as a sole proprietorship in September 1995 by Pierre Omidyar. Before that, on Labor Day of 1995, eBay was called Electronic Bay, then Auction Web eBay, and it had no guarantees, no fees or any mechanism to moderate disputes on the platform, nor payments platforms integrate (eBay would, later on, purchase PayPal, that would be then spun-off in 2015).

As the story goes, cheques would start to pile up so much on Pierre Omidyar desk that he head to finally move those to a business account, and scale what would become one of the most valuable internet companies, which would IPO by September 1998 (about three years after its launch).

Back in 1998, that is how the company would get described in its financial prospectus:

eBay is the world’s largest and most popular person-to-person tradingcommunity on the Internet. eBay pioneered online person-to-person trading by developing a Web-based community in which buyers and sellers are brought together in an efficient and entertaining auction format to buy and sell personal items such as antiques, coins, collectibles, computers, memorabilia,stamps and toys.

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eBay Financial Prospectus of 1998

By 1998 the company passed over $14 in revenues.

eBay business overview

eBay Inc. is a global marketplace platforms including StubHub and Classifieds platforms (Kijiji, Gumtree, Marktplaats, etc.). It comprises three primary businesses:

The core Marketplace platforms: those include the online marketplace, like ebay.com, and its mobile apps.
StubHub platform: that includes the online ticket platform stubhub.com, and its mobile apps where users can buy or sell tickets to live sports, music, theater and other events.
Classifieds platform: that includes a collection of brands such as mobile.de, Kijiji, Gumtree, Marktplaats, eBay Kleinanzeigen, and others.
Other services offered on top of its platforms: those are services meant to support the activity of third-party sellers on the platform.

What’s eBay’s unique business advantage?

We are fiercely loyal in protecting eBay’s unique advantage as a true marketplace in service of small independent businesses, consumer sellers, and buyers, and working to dramatically simplify the buyer and seller experience.

As mentioned in the 2018 Shareholders’ Letter eBay highlights its key strength as that of empowering independent sellers and businesses. That is a key point to emphasize, as it enables us also to understand why eBay is at its core platform business model, and how it is different from other companies like Amazon.

What are the core value propositions of eBay?

As a platform business model eBay has two core players:

Buyers
And sellers

They both enable the platform to be successful. Indeed, to offer great value to the buyer the platform has offer great variety. And to be valuable to sellers it has to be able to attract a broad range of buyers willing to buy any sort of object on the platform.

The company is focusing in the coming years toward:

Evolving to a managed marketplace.
Building a foundational product catalog.
Managing the end-to-end payment process.
Offering great selection and value.

Great selection and value are at the core of the eBay business model, which includes “new, everyday items as well as rare and unique goods.”

What value does the platform drives for each of its key players?

eBay value propositions for buyers

For buyers eBay offers:

Wide inventory at a usually good value.
Multiple delivery options.
eBay’s 110% Best Price Guarantee (in the US for certain categories of products).
Offerings below $10.
Money-Back Guarantee and eBay Authenticate (a mechanism checking the authenticity of certain categories of products).

eBay value propositions for sellers

For sellers eBay offers:

The choice to list products and services through fixed-price listings or an auction-style format.
Ability to list items that are newly refurbished, used and rare.
Promoted Listings.
eBay’s Top-Rated Seller program.
Insights on optimal listing and pricing through the Seller Hub portal.

How is the eBay business model different from Amazon? A platform business model at its core

Unlike other digital commerce businesses, we don’t compete with our sellers and we refuse to compromise the shopping experience to push “house brands” and irrelevant posts. Millions of small businesses and consumers sell only on eBay. I believe it’s because of our purpose and policies — this matters to customers. We fundamentally object to unnaturally bundling services to overcome barriers to competition. At eBay, we empower third party sellers to thrive, which actually serves consumers seeking value and selection. We are a benchmark on this. We always have been.

In its 2018 Shareholders’ Letter, eBay emphasizes the fact that the platform doesn’t compete against its third-party sellers, as it happens instead on a platform like Amazon, which while enables third-party sellers to host their products on top of Amazon e-commerce, it still also features its own branded products.

This is a key difference between eBay and Amazon.

In addition, where Amazon takes the money from transactions, then paying a fee to third-party sellers. eBay instead, primarily takes a fee on a successful transaction.

In short, Amazon‘s key strength is on managing the cash generated through the platform. Where eBay primary strength is its ability to connect buyers and sellers on a wide variety of items not necessarily available elsewhere.

How does eBay really make money?

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eBay Annual Report 2019

eBay makes money in three ways:

Primarily through fees collected on successfully closed sales on eBay and StubHub.
On its classifieds platform, through advertising.
And other seller services offered on top of its marketplaces.

eBay made almost $8.5 billion in transaction revenues from marketplace fees. And over $2 billion from marketplace services and classifieds ads.

What are the key metrics to understand eBay business model?

Each company’s business model has its own logic, and as such, it measures its success through a set of metrics. For eBay those are:

Gross merchandise volume.
And transaction take rate.

Gross merchandise volume

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eBay Annual Report 2019

Gross Merchandise Volume (“GMV”) is defined as the volume of successfully closed transactions between users on eBay Marketplace and StubHub platforms.

This is a useful metric to understand the volume of transactions happening on the platform.

In 2018, the GMV was almost $89 billion.

Transaction take rate

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eBay Annual Report 2019

The transaction take rate is given by the Marketplace net transaction revenues divided by Marketplace GMV.

For instance, in the eBay marketplace, the transaction take rate was around 9%.

How does eBay primarily spend money to make money?

That might sound trivial but in order to make money, companies must spend money. Depending on the kind of business model you might be running also the key expenses to make the bottom line work out might change.

In eBay’s, those key expenses can be summarized as customer support, site operations, and payment processing, which amounted to over $2.3 billion, or over 22% of its total revenues in 2018.

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eBay Annual Report 2019

Other key expenses are related to sales and marketing (32% of total revenues in 2018) primarily consisting of advertising and marketing program costs (both online and offline), employee compensation, user coupons and rewards, contractor costs, facilities costs and depreciation on equipment.

Other key expenses related to product development and other general and administrative expenses.

eBay spin-off of PayPal

I covered in the PayPal business model how the company got at a certain point acquired by eBay in 2002 for $1.5 billion. At the time PayPal needed a strong payment processing system within its core platform.

As the years went by PayPal growth went far beyond eBay, which had worked as primarily growth driver for the company in the first years of operations. Until PayPal itself became more valuable than eBay.

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Indeed, by 2018 PayPal made over $15 billion in revenues and over $2 billion in net income. In October 2018, PayPal market cap passed $120 billion, compared to eBay $32 billion.

Key takeaways from eBay business model

eBay at its core is a platform business model, measuring its success based on the volume of successful transactions closed on its marketplaces.
As such it makes money primarily by transaction fees on its core platforms (eBay and StubHub).
The company also makes money with its Classifieds marketplaces (mobile.de, Kijiji, Gumtree, Marktplaats, eBay Kleinanzeigen, and others).
Where business models like Amazon are still a hybrid between e-commerce and platform business, where the company offers branded Amazon products, by de facto, in some circumstances operating in conflict with third-party sellers.
eBay’s strength is the fact that the company is aligned in making its independent sellers businesses.
eBay bought PayPal for $1.5 billion back in 2002, then it spun-it off in 2015.
In the first years of operations, eBay was the primary platform driving the growth of PayPal.
As PayPal scaled the company’s growth went far beyond eBay.
eBay remains a core e-commerce platform where the value of its operations is driven by its ability to empower third-party sellers by offering a wide variety of goods and merchandise.

Read next: PayPal Business Model In A Nutshell

Business resources:

What Is a Business Model? 30 Successful Types of Business Models You Need to Know
The Complete Guide To Business Development
Business Strategy: Definition, Examples, And Case Studies
What Is a Business Model Canvas? Business Model Canvas Explained
Blitzscaling Business Model Innovation Canvas In A Nutshell
What Is a Value Proposition? Value Proposition Canvas Explained
What Is a Lean Startup Canvas? Lean Startup Canvas Explained
What Is Market Segmentation? the Ultimate Guide to Market Segmentation
Marketing Strategy: Definition, Types, And Examples
Marketing vs. Sales: How to Use Sales Processes to Grow Your Business
How To Write A Mission Statement
What is Growth Hacking?
Growth Hacking Canvas: A Glance At The Tools To Generate Growth Ideas

Other business model analyses:

Netflix Business Model
Starbucks Business Model
LinkedIn Business Model
Google Business Model
Uber Business Model
Lyft Business Model
Robinhood Business Model
Nike Business Model
DuckDuckGo Business Model
ALDI Business Model
Apple Business Model
TOMS Business Model
Slack Business Model
Fiverr Business model
Pinterest Business Model
Telegram Business Model
TripAdvisor Business Model
Booking Business Model

The post How Does eBay Make Money? eBay Business Model In A Nutshell appeared first on FourWeekMBA.

View more on Gennaro Cuofano's website »

Like • 0 comments • flag

Published on October 06, 2019 14:19

Announcing The One-Minute Business Models Series

On FourWeekMBA we’re starting a new format where we dissect business models in less than a minute or so, by showing a few key highlights from those business models that really matter to have a quick glimpse at them.

This is not a simple fit, as explained over and over again, complex business models, like Amazon, Google, Apple, and Microsoft are giant with multiple business models within them. Therefore, the short-video format will simplify a bit in order to make it possible to cover an entire business model in a minute.

Why a video business model format?

Enable more people to appreciate the topic.
Allow a video-based format, for those who like video rather than text.
A quick introductory glance.

It is important to highlight that such a format is not meant as a substitute for in-depth business model analysis.

But a great way to be introduced to an otherwise complex topic. Thus, more people can get acquainted to how companies business models work, and therefore become better businesspeople!

Let’s start by looking at a few video business models.

LVMH Video Business Model