E commerce the second wave fifth annual edition
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E-Commerce: The Second Wave Fifth Annual Edition. Chapter 6: Online Auctions, Virtual Communities, and Web Portals. Objectives. In this chapter, you will learn about: Origins and key characteristics of the seven major auction types

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E commerce the second wave fifth annual edition

E-Commerce: The Second WaveFifth Annual Edition

Chapter 6:

Online Auctions, Virtual Communities, and Web Portals


Objectives

Objectives

In this chapter, you will learn about:

  • Origins and key characteristics of the seven major auction types

  • Strategies for Web auction sites and auction-related businesses

  • Virtual communities and Web portals

E-Commerce: The Second Wave, Fifth Annual Edition


Origins of auctions

Origins of Auctions

  • In an auction

    • Seller offers an item for sale, but does not establish price

  • Bidders

    • Potential buyers

  • Bids

    • Prices bidders are willing to pay for an item

  • Shill bidders

    • Can artificially inflate the price of an item

E-Commerce: The Second Wave, Fifth Annual Edition


English auctions

English Auctions

  • Bidders publicly announce their successive higher bids until no higher bid is forthcoming

  • Open auction

    • Bids are publicly announced

  • Minimum bid

    • The price at which an auction begins

  • Reserve price

    • Minimum acceptable price

E-Commerce: The Second Wave, Fifth Annual Edition


English auctions continued

English Auctions (Continued)

  • Yankee auctions

    • English auctions that offer multiple units of an item for sale

  • Disadvantages

    • Winning bidders tend not to bid their full private valuations

    • Bidders risk becoming caught up in the excitement of competitive bidding

E-Commerce: The Second Wave, Fifth Annual Edition


Dutch auctions

Dutch Auctions

  • http://esurplusauction.com/IANAuction?ianac=cat&catid=12

  • Also called descending-price auctions

  • Form of open auction in which bidding starts at a high price and drops until bidder accepts price

  • Often better for the seller

  • Good for moving large numbers of commodity items quickly

E-Commerce: The Second Wave, Fifth Annual Edition


Coldwater creek dutch auction of closeout merchandise

Coldwater Creek Dutch Auction of Closeout Merchandise

E-Commerce: The Second Wave, Fifth Annual Edition


Other types of auctions

Other Types of Auctions

  • Sealed-bid auctions

    • Bidders submit their bids independently

  • Second-price sealed-bid auction

    • Highest bidder is awarded the item at the price bid by the second-highest bidder

  • Open-outcry double auctions

    • Buy and sell offers are shouted by traders standing in a small area on the exchange floor

E-Commerce: The Second Wave, Fifth Annual Edition


Other types of auctions continued

Other Types of Auctions (Continued)

  • Double auction

    • Buyers and sellers each submit combined price-quantity bids to an auctioneer

  • Reverse (Seller-Bid) Auctions

    • Multiple sellers submit price bids to an auctioneer who represents a single buyer

    • Bids are for a given amount of a specific item that the buyer wants to purchase

E-Commerce: The Second Wave, Fifth Annual Edition


Online auctions and related businesses

Online Auctions and Related Businesses

  • Three categories of auction Web sites

    • General consumer auctions

    • Specialty consumer auctions

    • Business-to-business auctions

  • Largest number of transactions

    • Occurs on general consumer auction sites

E-Commerce: The Second Wave, Fifth Annual Edition


General consumer auctions

General Consumer Auctions

  • Most common format used on eBay

    • Computerized version of the English auction

  • eBay English auction

    • Allows seller to set a reserve price

    • Bidders are listed

    • Bid amounts are not disclosed until after auction

    • Allows sellers to specify that an auction be made private

E-Commerce: The Second Wave, Fifth Annual Edition


Specialty consumer auctions

Specialty Consumer Auctions

  • Specialized Web auction sites

    • Meet the need of special interest market segments

  • Specialty consumer auction sites

    • Golf Club Exchange, Cigarbid.com, and Winebid, Diamond

    • Gain an advantage by identifying a strong market segment with readily identifiable products

E-Commerce: The Second Wave, Fifth Annual Edition


Consumer reverse auctions and group purchasing sites

Consumer Reverse Auctions and Group Purchasing Sites

  • Reverse bid

    • Buyer can accept lowest offer or the offer that best matches buyer’s criteria

  • Priceline.com

    • Completes many of its transactions from an inventory

    • Operates more as a liquidation broker

E-Commerce: The Second Wave, Fifth Annual Edition


Consumer reverse auctions and group purchasing sites continued

Consumer Reverse Auctions and Group Purchasing Sites (Continued)

  • Group purchasing site - LetsBuyIt

    • Seller posts an item with a price

    • As individual buyers enter bids, site can negotiate better price with the item’s provider

    • Posted price ultimately decreases as number of bids increases

E-Commerce: The Second Wave, Fifth Annual Edition


Business to business auctions

Business-to-Business Auctions

  • Liquidation brokers

    • Firms that find buyers for unusable inventory items - http://www.liquidation.com/http://www.murphyauction.com/

  • Online auctions

    • Logical extension of inventory liquidation activities to a new and more efficient channel, the Internet

E-Commerce: The Second Wave, Fifth Annual Edition


Business to business auctions continued

Business-to-Business Auctions (Continued)

  • Ingram Micro

    • Major distributor of computers and related equipment to value-added resellers

    • Often finds itself with outdated items turned over to liquidation brokers

    • Now auctions those items to its established customers

    • Auction prices received average about 60 percent of the items’ costs

E-Commerce: The Second Wave, Fifth Annual Edition


Compusa auctions home page

CompUSA Auctions Home Page

E-Commerce: The Second Wave, Fifth Annual Edition


Business to business reverse auctions

Business-to-Business Reverse Auctions

  • U.S. Navy and the federal government’s General Services Administration

    • Experimenting with reverse auctions

  • Need for trust and long-term strategic relationships with suppliers

    • Makes reverse auctions less attractive in some industries

  • Use of reverse auctions

    • Replaces trusting relationships with a bidding activity that pits suppliers against each other

E-Commerce: The Second Wave, Fifth Annual Edition


Supply chain characteristics and reverse auctions

Supply Chain Characteristics and Reverse Auctions

E-Commerce: The Second Wave, Fifth Annual Edition


Auction related services

Auction-Related Services

  • Auction escrow services - Escrow.com

    • An independent party that

      • Holds buyer’s payment until buyer receives purchased item and is satisfied with it

  • Auction directory and information services

    • Offer guidance for new auction participants

    • Offer helpful hints and tips for more experienced buyers and sellers along with directories of online auction sites – Auctionguide.com

E-Commerce: The Second Wave, Fifth Annual Edition


Auction related services continued

Auction-Related Services (Continued)

  • Auction software

    • For sellers Vendio

      • Software offer services that can help with or automate tasks such as image hosting

    • For buyers

      • Software observes auction progress and places a bid high enough to win the auction - Sniping

E-Commerce: The Second Wave, Fifth Annual Edition


Auction related services continued1

Auction-Related Services (Continued)

  • Auction consignment services

    • Create online auction for an item

    • Handle the transaction

    • Remit balance of proceeds

    • Picture it SOLD

E-Commerce: The Second Wave, Fifth Annual Edition


Portion of andale products page

Portion of Andale Products Page

E-Commerce: The Second Wave, Fifth Annual Edition


Virtual communities and web portals

Virtual Communities and Web Portals

  • Cellular-satellite communications technology

    • Can be packaged with

      • Notebook computers

      • Personal digital assistants (PDAs)

      • Mobile phones

  • Wireless Application Protocol (WAP)

    • Allows Web pages formatted in HTML to be displayed on devices with small screens

E-Commerce: The Second Wave, Fifth Annual Edition


Web page displayed on a pda

Web Page Displayed on a PDA

E-Commerce: The Second Wave, Fifth Annual Edition


Electronic marketplaces

Electronic Marketplaces

  • Marketplaces

    • Can serve people who want to buy and sell a wide range of products and services

  • AvantGo

    • Provide PDAs with downloads of Web site contents, news, restaurant reviews, and maps

E-Commerce: The Second Wave, Fifth Annual Edition


Avantgo channels subscription page

AvantGo Channels Subscription Page

E-Commerce: The Second Wave, Fifth Annual Edition


Intelligent software agents

Intelligent Software Agents

  • Programs that search the Web and find items for sale that meet a buyer’s specifications

  • Some software agents

    • Focused on a particular category of product

  • Simon

    • One of the best shopping agents currently available

E-Commerce: The Second Wave, Fifth Annual Edition


Virtual communities

Virtual Communities

  • Gathering place for people and businesses that does not have physical existence

  • Exist on the Internet in various forms

    • Usenet newsgroups

    • Chat rooms

    • Web sites

  • Offer people a way to connect with each other and discuss common issues and interests

E-Commerce: The Second Wave, Fifth Annual Edition


Virtual communities continued

Virtual Communities (Continued)

  • Virtual learning community

    • One form of virtual community

  • Can help companies, their customers, and their suppliers plan, collaborate, and transact business

  • Google Answers

    • Gives people a place to ask questions then answered by an expert for a fee

E-Commerce: The Second Wave, Fifth Annual Edition


Ja sig uportal home page

JA-SIG uPortal Home Page

E-Commerce: The Second Wave, Fifth Annual Edition


Google answers page

Google Answers Page

E-Commerce: The Second Wave, Fifth Annual Edition


Early web communities

Early Web Communities

  • The WELL ( “whole earth ’lectronic link”)

    • One of the first Web communities

    • Predates the Web

  • Tripod

    • Founded in 1995 in Massachusetts

    • Offered its participants free Web page space, chat rooms, news and weather updates, and health information pages

E-Commerce: The Second Wave, Fifth Annual Edition


Web community consolidation

Web Community Consolidation

  • Virtual communities for consumers

    • Can succeed as money-making propositions if

      • They offer something sufficiently valuable to justify a charge for membership

  • Web portal revenue models

    • Strategies that build on a combination of virtual communities and other activities

E-Commerce: The Second Wave, Fifth Annual Edition


Web portal revenue models

Web Portal Revenue Models

  • Advertising supported web portals

    • One rough measure of stickiness

      • How long each user spends at the site

    • Nielsen//NetRatings

      • Determines site popularity by measuring the number of unique visitors

E-Commerce: The Second Wave, Fifth Annual Edition


Web portal revenue models continued

Web Portal Revenue Models (Continued)

  • Web portals

    • High visitor counts can yield high advertising rates

    • Companies that run Web portals

      • Believe in the power of portals

      • Add sticky features such as chat rooms, e-mail, and calendar functions

E-Commerce: The Second Wave, Fifth Annual Edition


Stickiness of popular web sites

Stickiness of Popular Web Sites

E-Commerce: The Second Wave, Fifth Annual Edition


Mixed revenue portals

Mixed Revenue Portals

  • Time Warner’s AOL unit

    • One of the most successful Web portals

    • Charged a fee to users and has always run advertising on its site

  • Yahoo!

    • Now charges for the Internet phone service originally offered at no cost

E-Commerce: The Second Wave, Fifth Annual Edition


Internal web portals

Internal Web Portals

  • Run on intranets

  • Can save significant amounts of money by

    • Replacing the printing and distribution of paper memos, newsletters, and other correspondence

  • Can become a good way of creating virtual community among employees

E-Commerce: The Second Wave, Fifth Annual Edition


Summary

Summary

  • Companies are now using Web to

    • Operate auction sites, create virtual communities, and serve as Web portals

  • Consumer online auction business

    • Dominated by eBay

  • B2B auctions

    • Give companies a new and efficient way to dispose of excess inventory

  • B2B reverse auctions

    • Provide an effective procurement tool

E-Commerce: The Second Wave, Fifth Annual Edition


Summary1

Summary

  • New companies have formed that

    • Capitalize on Web’s ability to bring together geographically dispersed people and organizations

  • Organizations are using mobile commerce to

    • Sell goods and services to users of handheld devices

  • Companies are using internal Web portals to

    • Communicate with employees

E-Commerce: The Second Wave, Fifth Annual Edition


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