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ECT 250: Survey of ecommerce technology


Hard to make money delivering low-priced convenience store items. ... Bricks and clicks: Online distribution channels for company with 'physical' stores. ... – PowerPoint PPT presentation

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Title: ECT 250: Survey of ecommerce technology

ECT 250 Survey of e-commerce technology
  • Business models for e-commerce

  • Combine the convenience of a catalog with the
    immediate gratification of in-store shopping
  • Offering entertainment, food, and convenience
  • delivered within one hour by Kozmonauts on bikes
  • no minimum order required
  • no delivery charges.

  • Created a Web site that featured localized
    offerings based on customer zip code.
  • An order placed on the Web site would be
    transmitted directly to Kozmos distribution
    center, packed, and delivered.

  • 250 million in Venture capital
  • Rapid expansion and intensive spending to gain
    market share and brand recognition
  • No concern for short-term profitability

5 crashes
  • Painful lessons
  • Hard to make money delivering low-priced
    convenience store items.
  • Business model didnt work everywhere.
  • Company founders are not necessarily its best
  • Difficult for a new firm to establish a
    profitable e-commerce business in an entirely new
    market niche.

Ingredients for a business model
  • Why should the costumer buy from you?
  • How will you make money?
  • What market (size) will you serve?
  • Who are your competitors?
  • What is your competitive advantage?
  • What is your market strategy?
  • How is your firm structured?
  • What skills does you managerial team need?

Well-suited for e-commerce
  • In general, transactions that are well-suited for
    e-commerce involve commodity items, that is
    products or services that have become
  • Sale/purchase of new books, CDs
  • Online delivery of software
  • Travel services
  • Shipment tracking
  • Auctions

Not well-suited for e- commerce
  • In general, products that the customer prefer to
    touch, smell or closely examine, are not very
    well-suited for e-commerce.
  • Sale/purchase of high end fashion clothing
  • Sale/purchase of perishable foods
  • Sales of expensive jewelry and antiques
  • Small denomination transactions
  • The new trend of bricks and clicks is changing
    some of these issues.

E-commerce revenue models
  • How will the firm earn revenue, produce profits,
    and produce a superior return on invested
  • Advertising model
  • Subscription model
  • Transaction fee model
  • Sales model
  • Affiliate model

E-commerce revenue models
  • Advertising modela company provides a forum for
    advertisements and receives fees from advertisers
  • Subscription model a company offers its users
    content or services and charges a subscription
    fee for access to some or all of it offerings
    (Consumer Reports , Wall Street Journal, ESPN)

E-commerce revenue models
  • Transaction fee model a company receives a fee
    for enabling or executing a transaction (eBay,
    E-Trade, Autobytel)
  • Sales model a company derives revenue by selling
    goods, information, or services (Amazon, Lands
    End, Dell, DoubleClick)
  • Affiliate model a company steers business to an
    affiliate and receives a referral fee or
    percentage of the revenue from any resulting
    sales (MyPoints)

B2C Portals
  • Offers visitors a chance to find a variety of
    things news, sports, weather, search the web,
    online shopping
  • Horizontal portals aggregate information about a
    broad range of topics (search engines)
    Yahoo!, MSN, Altavista
  • Vertical portals offer services and products to
    specialized marketplaces

B2C E-tailers
  • Virtual Merchants Online version of retail
    store. mazon peapod cdnow
  • Bricks and clicks Online distribution channels
    for company with physical,
  • Catalog Merchant Online version of mail catalog., One Step Ahead

B2C E-tailers (cont.)
  • Online shopping malls Online version of mall.
    Consumers use the malls shopping cart to process
    purchases from many stores in a single
  • Manufacturer direct Online sales made directly
    by manufacturer. Dell

B2C Market Creators
  • Auctions Web-based businesses the use Internet
    technology to create markets that bring buyers
    and sellers together. ebay, amazon
  • Dynamic Pricing Allows customers to choose their
    price for products and services.
    priceline, imandi
  • Comparison Pricing allows customers to poll a
    variety of merchants and find a product at the
    lowest price mysimon

More B2C models
  • Content/service providers Sell and deliver news,
    services ..,, xDrive
  • Transaction Brokers Processors of online sales
    transactions, such as stock brokers and travel
    agents. EX,,Monster.c
  • Community Providers Sites where individuals with
    particular interests, hobbies can come together
    and compare notes.

B2B Hubs
  • Are electronic marketplaces where suppliers and
    commercial purchaser can conduct transactions,
    gather information, check out suppliers, collect
  • Vertical serve specific industries, such as
    steel , automobile, chemical, floral .EX
    Covisint (auto), Chemdex (science lab supplies)
  • Horizontal sell specific products and services
    to a wide range of companies in different
    industries.EX (auctions surplus
    equipment, excess inventory off the highest
    bidder in any industry) It was recently acquired

More B2B models
  • B2B E-distributors companies that supply
    products and services directly to many individual
    businesses. The more products and services are
    available on the site the more attractive it is
    to potential costumers. Grainger
  • B2B Service Providers Sell business services to
    other firms. Develop one complex product then
    sell it to many is an
    Application Service Provider, it sells access to
    Internet-based software applications for managing
    the sales force, for customer relation
    management etc

More B2B models
  • Matchmakers Companies that make money by linking
    other businesses and taking a cut of any business
    that occurs via a transaction or usage fee.
    Similar to transaction brokers in the B2C helps businesses find the cheapest
    shipper for their packages
  • Infomediaries Gather information and sell it to