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Comp2513 E-Commerce Business Models Daniel L. Silver, Ph.D.

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Presentation on theme: "Comp2513 E-Commerce Business Models Daniel L. Silver, Ph.D."— Presentation transcript:

1 Comp2513 E-Commerce Business Models Daniel L. Silver, Ph.D.

2 2002Daniel L. Silver2 Outline Three fundamental categories of E-Commerce business models Three fundamental categories of E-Commerce business models –B2C, B2B and C2C A B2C Scenario 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

3 2002Daniel L. Silver3 Three Fundamental Categories of E-Commerce Business Models B2C – Business to Consumer B2C – Business to Consumer –What most people typically think of when they think E-Commerce C2C – Consumer to Consumer C2C – Consumer to Consumer –Auctions, Bartering models B2B – Business to Business B2B – Business to Business –The original E-Commerce models – Why?

4 2002Daniel L. Silver4 B2C – Business to Consumer Storefront Model 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

5 2002Daniel L. Silver5 B2C – Business to Consumer Online Shopping Mall Model 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

6 2002Daniel L. Silver6 B2C – Business to Consumer Portal Models 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 –Help users collect information and purchase –Charge merchants for advertisememts

7 2002Daniel L. Silver7 B2C – Business to Consumer Innovative/Dynamic Pricing Models 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

8 2002Daniel L. Silver8 C2C – Consumer to Consumer Auction Model 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 Bartering Model –Offering one item in exchange for another –Ubarter.com

9 2002Daniel L. Silver9 B2B – Business to Business Businesses have long done E-Commerce with each other 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) 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) Moving to the Internet, Web technology and XML (upgrade of EDI)

10 2002Daniel L. Silver10 B2B – Business to Business B2B Internet exchanges provide standard methods of buying, selling, bartering and partnering B2B Internet exchanges provide standard methods of buying, selling, bartering and partnering 2003: US$403 B 2003: US$403 B 2004 projection: 2004 projection: –US$2.77 trillion »(eMarketer) –US$7.29 trillion »(Gardner Group) B2B auctions: B2B auctions: –US$52 billion 2002

11 2002Daniel L. Silver11 The Traditional B2C Commerce Scenario 1. Buyer and seller meet 2. Buyer chooses product and places order 3. Seller delivers product 4. Buyer pays for product

12 2002Daniel L. Silver12 The E-Commerce B2C Scenario Consumer Perspective Search the Internet Search the Internet Choose the right product Choose the right product Place the order and shipping info. Place the order and shipping info. Enter payment info. Enter payment info. Receive product via Internet or ground shipment Receive product via Internet or ground shipment Business Perspective Advertising Inventory (product) Management Order Processing (shopping cart) Payment Mgmt Fulfillment and Shipping Profile Management

13 2002Daniel L. Silver13 A B2C Scenario I would like to buy some hands-free technology to work with my cellular phone for my consulting business. I would like to buy some hands-free technology to work with my cellular phone for my consulting business. Criteria: Criteria: –It must be reliable –Inexpensive as possible –Light-weight –Small (able to fit into my pocket)

14 2002Daniel L. Silver14 Typical B2C Shopping Trip View HomepageRegistration Address Book Shopping Cart Product Advisor Search Receive Ack. Submit Order Enter Payment Info. Enter Shipping Info. Select Products Navigate

15 2002Daniel L. Silver15 A B2C Scenario Technology Questions How does a browser connect to a server? How does a browser connect to a server? How does a search engine work? How does a search engine work? What is a cookie? What is a cookie? How do those banner adds work? How do those banner adds work? Are there web pages for every item? Are there web pages for every item? What is all that gobbledygook in the page address? What is all that gobbledygook in the page address? What is a shopping cart? How long does it exist? What is a shopping cart? How long does it exist? How does a web sites know who I am on return? How does a web sites know who I am on return? Should I register? Should I register?

16 2002Daniel L. Silver16 A B2C Scenario Technology Questions How does it find my password? How does it find my password? How does it automatically send me s? How does it automatically send me s? What are the messages concerning insecure submissions all about? What are the messages concerning insecure submissions all about? What is authentication, certificate, encryption? What is authentication, certificate, encryption? How do they know my credit card is good? How do they know my credit card is good? How do they know there is credit left? How do they know there is credit left? How is software I have purchased downloaded? How is software I have purchased downloaded? How do they track my shipment? How do they track my shipment?

17 2002Daniel L. Silver17 B2C Levels of Automation Front-End Static Web content Static Web content Dynamic Web content Dynamic Web content Secure ordering Secure ordering Shopping cart Shopping cart Persistent customer Data Persistent customer Data Personalization of Content Personalization of Content Back-End Manual Non-integrated computer Automatic entry Total Web integration

18 2002Daniel L. Silver18 Business Evolution on the Web Publishing Time or Maturity Functionality Interactivity Transactions Processes Static web pages Dynamic web pages Web-enabled applicatons

19 THE END


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