E-Commerce Lecture 4

Business Model Description of means and methods a firm employs to earn the revenue projected in its plans. » model.html#ixzz2Lyatrus9 A business model is nothing else than a representation of how an organization makes (or intends to make) money. » business-model.html

Business Models in E-Commerce There are many business models in e-commerce. The following list describes the most common or typical business models of e-commerce. 1.Online, direct marketing 2.Electronic Tendering System 3.Name your own price 4.Find the best price 5.Affiliated Marketing 6.Viral Marketing 7.Online Auctions 8.Supply Chain Improve

Business Models in E-Commerce Online, direct marketing – The most obvious model is that of selling online, from manufacturers to customers (eliminating intermediaries) or from retailers to consumers. – It is practiced in B2C and B2B types of EC.

Business Models in E-Commerce Electronic Tendering System – Large organizational buyers, private or public, usually make their purchases through a tendering (bidding) system. – It is also known as a reverse auction.

Business Models in E-Commerce Name your own price – Model in which a buyer sets the price he or she is willing to pay and invites sellers to supply the good or service at that price

Business Models in E-Commerce Find the best price – According to this model, a customer specifies a need and then an intermediate company matches the customer’s need against a database, locates the lowest price, and submits it to the consumer. – For example, consumers can go to E-LOAN (eloan.com) to find the best interest rate for auto or home loans.

Business Models in E-Commerce Affiliated Marketing – An arrangement whereby a marketing partner (a business, an organization, or even an individual) refers consumers to the selling company’s Web site.

Business Models in E-Commerce Viral Marketing – It is also known as Word-of-mouth marketing. – Customers promote a product or service to friends or other people. – According to the viral marketing model, one can increase brand awareness or even sales by inducing people to send messages to other people or to recruit friends to join certain programs.

Business Models in E-Commerce Online Auctions – In these auctions, online shoppers make consecutive bids for various goods and services, and the highest bidders get the auctioned items. Supply Chain Improve – One of the major contributions of EC is in the creation of new models that change or improve supply chain management.