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Comp2513 E-Commerce Business Models Daniel L. Silver, Ph.D. Outline Three fundamental categories of E-Commerce business models B2C, B2B and C2C A B2C Scenario Window Shopping Step into the store (registration) Filling the shopping cart On to the checkout Paying for the items

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comp2513 e commerce business models

Comp2513E-Commerce Business Models

Daniel L. Silver, Ph.D.

outline
Outline
  • Three fundamental categories of E-Commerce business models
    • B2C, B2B and C2C
  • A B2C Scenario
    • Window Shopping
    • Step into the store (registration)
    • Filling the shopping cart
    • On to the checkout
    • Paying for the items
    • Fulfillment and shipment tracking

Daniel L. Silver

three fundamental categories of e commerce business models
Three Fundamental Categories of E-Commerce Business Models
  • B2C – Business to Consumer
    • What most people typically think of when they think E-Commerce
  • C2C – Consumer to Consumer
    • Auctions, Bartering models
  • B2B – Business to Business
    • The original E-Commerce models – Why?

Daniel L. Silver

b2c business to consumer
B2C – Business to Consumer
  • Storefront Model
    • The best known form of E-Commerce
    • Displays products (catalogs), takes orders, accepts payment, fulfills order, manage customer data
    • Click and Mortar versus Internet Only
    • Amazon.com, eToys.com, CDnow.com, Chapters.ca

Daniel L. Silver

b2c business to consumer5
B2C – Business to Consumer
  • Online Shopping Mall Model
    • Present wider selection of products and services
    • Searching and shopping convenience
    • Common shopping cart, payment and shipping method
    • Takes advantage of economies of scale
    • Merchants are charged in various ways
    • Mall.com, Canadashop.com, Shoptheshops.com

Daniel L. Silver

b2c business to consumer6
B2C – Business to Consumer
  • Portal Models
    • Horizontal portals – general search engines
      • Broad range of topics, shallow depth
      • Links to various malls, stores, auctions, sources
      • Altavista.com, Hotbot.com, Yahoo.com, Google
    • Vertical portals – specialist
      • Narrow range of topics, in-depth information
      • See http://www.verticalportals.com/
    • Help users collect information and purchase
    • Charge merchants for advertisememts

Daniel L. Silver

b2c business to consumer7
B2C – Business to Consumer
  • Innovative/Dynamic Pricing Models
    • Name-your-price – Priceline.com
    • Comparison pricing – Bottomdollar.com
    • Bulk-buy pricing – mercata.com, mobshop.com
    • Rebating – eBates.com. eCentives.com
    • Free products and services – iWon.com, Freemerchant.com – free hosting, free store building, free traffic logs, free auction tools, etc

Most would not be possible without the Internet

Daniel L. Silver

c2c consumer to consumer
C2C – Consumer to Consumer
  • Auction Model
    • Internet forum for sellers and bidders
    • Various auctions (reserve-price, reverse, Dutch)
    • eBay.com (1995, Pez dispenser collector)
    • 4M simultaneous auctions, 450K new items/day
    • $3.8B spent in online auctions in 2000(Forrester)
  • Bartering Model
    • Offering one item in exchange for another
    • Ubarter.com

Daniel L. Silver

b2b business to business
B2B – Business to Business
  • Businesses have long done E-Commerce with each other
    • EFT – Electronic Funds Transfer (banks)
    • EDI – Electronic Data Interchange (suppliers)
  • Traditional EDI uses a VAN (value-added network)
    • Closed networks, manufactures and suppliers
    • Purchase orders and invoices exchanged daily
    • Standards vary, VANs are costly, closed nets
  • Moving to the Internet, Web technology and XML (upgrade of EDI)

Daniel L. Silver

b2b business to business10
B2B – Business to Business
  • B2B Internet exchanges provide standard methods of buying, selling, bartering and partnering
  • 2003: US$403 B
  • 2004 projection:
    • US$2.77 trillion
      • (eMarketer)
    • US$7.29 trillion
      • (Gardner Group)
  • B2B auctions:
    • US$52 billion 2002

Daniel L. Silver

the traditional b2c commerce scenario
The Traditional B2C Commerce Scenario
  • Buyer and seller meet
  • Buyer chooses product and places order
  • Seller delivers product
  • Buyer pays for product

Daniel L. Silver

the e commerce b2c scenario
Consumer Perspective

Search the Internet

Choose the right product

Place the order and shipping info.

Enter payment info.

Receive product via Internet or ground shipment

Business Perspective

Advertising

Inventory (product) Management

Order Processing (shopping cart)

Payment Mgmt

Fulfillment and Shipping

Profile Management

The E-Commerce B2C Scenario

Daniel L. Silver

a b2c scenario
A B2C Scenario
  • I would like to buy some hands-free technology to work with my cellular phone for my consulting business.
  • Criteria:
    • It must be reliable
    • Inexpensive as possible
    • Light-weight
    • Small (able to fit into my pocket)

Daniel L. Silver

typical b2c shopping trip
Typical B2C Shopping Trip

View Homepage

Registration

Navigate

Product Advisor

Search

Select Products

Shopping Cart

Enter Shipping Info.

Address Book

Enter Payment Info.

Submit Order

Receive Ack.

Daniel L. Silver

a b2c scenario technology questions
A B2C ScenarioTechnology Questions
  • How does a browser connect to a server?
  • How does a search engine work?
  • What is a cookie?
  • How do those banner adds work?
  • Are there web pages for every item?
  • What is all that gobbledygook in the page address?
  • What is a shopping cart? How long does it exist?
  • How does a web sites know who I am on return?
  • Should I register?

Daniel L. Silver

a b2c scenario technology questions16
A B2C ScenarioTechnology Questions
  • How does it find my password?
  • How does it automatically send me emails?
  • What are the messages concerning insecure submissions all about?
  • What is authentication, certificate, encryption?
  • How do they know my credit card is good?
  • How do they know there is credit left?
  • How is software I have purchased downloaded?
  • How do they track my shipment?

Daniel L. Silver

b2c levels of automation
Front-End

Static Web content

Dynamic Web content

Secure ordering

Shopping cart

Persistent customer Data

Personalization of Content

Back-End

Manual

Non-integrated computer

Automatic entry

Total Web integration

B2C Levels of Automation

Daniel L. Silver

business evolution on the web
Business Evolution on the Web

Processes

Functionality

Web-enabled

applicatons

Transactions

Interactivity

Dynamic web pages

Publishing

Static web pages

Time or Maturity

Daniel L. Silver