Globalization and its Negative Impact on Selling Your Stuff

Essay by ahtramUniversity, Master'sA+, August 2007

download word file, 5 pages 3.0

Globalization refers to the worldwide phenomenon of technological, economic, political and cultural exchanges, brought about by modern communication, transportation and legal infrastructure as well as the political choice to consciously open cross-border links in international trade and finance. It is a term used to describe how human beings are becoming more intertwined with each other around the world economically, politically, and culturally. Although these links are not new, they are more pervasive than ever before. This widespread economic trend has, although minimally, impacted our e-commerce business.

Sell Your Stuff™ sells worldwide on eBay. In many ways it has benefited from the globalizing mode that has swept over America. Acceptance of American pop culture and interesting fashions and antiquities has helped increase international sales on eBay. However, because of American companies are now outsourcing entities such as manufacturing plants and labor, it is difficult to compete with the sale of brand new items on eBay and most e-commerce sites.

Globalization has negatively impacted SYS's attempt to expand their business with the sale of brand new items at fixed prices rather than an auction-style format. Their competitors are companies that have outsourced their manufacturing plants in countries like China and Ireland. These companies are now able to sell the same item for almost 60% less than SYS. The item goes directly from the manufacturing plant to eBay for sale-no middleman, or extra transportation costs (Chapter 1).

Comparative advantage was first described by Robert Torrens in 1815 in an essay on the corn trade. He concluded that it was to England's advantage to trade various goods with Poland in return for corn, even though it might be possible to produce that corn more cheaply in England than Poland. The theory of comparative advantage is perhaps the most important concept in international...