In the online world of transactions, reputation systems play a vital role in the steps leading up to the actual buying and selling. With numerous people looking to buy and sell things online, how can one judge someone as honest and trustworthy? Especially since you have never met them face to face.

There are systems used by e-commerce websites that help in building a users online reputation which contributes to the level of trust with future customers, based on existing ones.

Looking at popular websites like Ebay & Amazon have you ever wondered what encourages you to become a buyer or a seller? It is the feedback systems that build reputations, ensuring your transaction is not fraudulent. Gone are the days when people used to hesitate to buy things online because of these reputation systems we are far more comfortable to deal with companies like Paypal, Ebay, Amazon etc.

An interesting term that used in relation to online feedback systems is ‘market for lemons’. It states the case that if there were no reputation system in place buyers would not want to pay high prices and sellers would not want to accept lower prices for their high quality products, ultimately driving out the high quality sellers leaving behind in the market only lower quality goods for low prices. This would be a big problem because the whole e-commerce model will not work for anything other than cheap small goods, this means that things like buying laptops or televisions online would not be possible!

With new technologies today like linking social media accounts such as Facebook & Twitter to e-commerce websites for feedback purposes provides even a better feedback system than anonymous ones due to its reliability and the names of

friends attached to it, people will be more inclined to purchase from them. We might not be continuously paying attention to details but feedback and reputation systems are an important part of an e-commerce business and any company that makes online transactions which is most likely to be all at some point.

Written By:
Shizra Saqib





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