Business Models Content 1 Storefront Model 2 Auction

Business Models Content 1. Storefront Model 2. Auction Model 3. Portal Model 4. Dynamic Pricing Model 5. Online Trading Model 6. Other Types of e-Business Models

Introduction • In this chapter we explore the many business models currently being implemented on the Web. These models include: – – – The Storefront Model The Auction Model The Portal Model The Name-Your-Price Model The Comparison Pricing Model The Demand Sensitive Pricing model – The B 2 B Exchange Model

Introduction (cont. ) • An e-business can be defined as a company that has an online presence. • E-commerce businesses allow customers to sell, trade, barter over the Web • A companies policy, operations, technology and ideology define its business model

Storefront Model • Storefront model enables merchants to sell products on the Web – transaction processing, security, online payment, information storage • E-commerce allows companies to conduct business 24 -by-7, all day everyday, worldwide • An e-commerce storefront should include – online catalog of products, order processing, secure payment, timely order fulfillment.

Shopping Cart Technology • Shopping Cart – An order-processing technology allows customers to accumulate lists of items they wish to buy as they continue to shop. • The shopping cart is supported by – the product catalog, merchant server, database technology • Many companies combine a number of purchasing methods to give their customers a wide array of options.

Park’n Shop

Online Shopping Malls • Online Mall – A collection of online retailers that offer their products and services on a single site. • In an online mall, consumers can use the mall’s shopping cart technology to purchase items from many stores in a single transaction. • Online malls act as shopping portals directing traffic to the leading shopping retailers for a specific product. • Online malls offer speed and added convenience to a customers shopping experience.

Auction Model • Online auction sites act as forums through which Internet users can log-on and assume the role of either bidder or seller. • Sellers post items they wish to sell and wait for buyers to bid. • Reserve price – The minimum price a seller will accept in a given auction. • Reverse auctions – allow the buyer to set a price as sellers compete to match or even beat it. • Auction sites collect a commission on every successful auction.

Red-dots

Portal Model • Portal sites give visitors the chance to find almost everything they are looking for in one place. • horizontal portals – portals that aggregate information on a broad range of topics. – Yahoo!, Alta. Vista, Google • vertical portals – portals that offer more specific information within a single area of interest. – Web. MD, IMDB, First. Gov

Yahoo!

Dynamic Pricing Model • The Web has changed the way products are priced and purchased • Comparison pricing model – Comparison pricing Web sites using shopping bot technology to find the lowest price for a given item • Demand-sensitive pricing model – Group buying reduces price as volume sales increase • Name-your-price model – Name-your-price for products and services.

Dynamic Pricing Model (cont. ) • Bartering Model – Individuals and business trade unneeded items for items they desire. – Ubarter. com, isolve. com • Rebate Model – Sites offer rebates on product at leading online retailers in return for commission or advertising revenues. – e. Bates • Free offering model – Free products and services generate high traffic – Freemerchant, Start Sampling, Free. Samples. com

Online Trading Model • Online trading empowers the average investor to handle their own investments • Trading sites offer – Research – Investments analysis – Stock history – Simple buying and selling • Online Trading sites include: – E*TRADE – Ameritrade – Fidelity. com

E*TRADE Banking and Financial Services

E*TRADE via PDA

Getting a Loan Online • Find, research and apply for loans online. • Many online lenders offer lower rates to attract customers. • Online lending services include free quotes, calculators and tutorials for borrowers. • Examples: – E-LOAN – e. Credit. com – Mortagebot. com

Recruiting on the Web • Resume tutorials, cover letter help, and free job searching available on the Web • Employers can find new employees from a global pool of applicants • Earn rewards for refering new hires to recruiters • Examples: – – – Guru. com Dice. com Refer. com Sixfigurejobs. com Monster. com

Job. Asia

Online News Services • Internet and Web offer a 24 -by-7 news source • It is important to check the information source as rumors are often passed online • Independent and freelance content creators compete with large scale industry players – – CNN. com ESPN. com Drudge Report Boston. com

Ming. Pao News

Online Travel Services • Customers now have the power to bypass a travel agent • Discounts and low fares available online • Name-your-price for tickets, hotels and car rentals • “Last minute” fares often lower online • Examples: – Expedia. com – Travelocity. com – Cheaptickets. com

Online Entertainment • The Web is a form of entertainment • Interactive television will use the Internet to offer interactivity to the world • MP 3 and file-transfer technology threaten copyright law • Examples: – – IMDB Farmclub. com MP 3. com i. Cast. com

MP 3. com

Online Automotive Sites • Consumers access automobile information empowering them to make an informed buying decision • Dealers use the Web to showcase vehicles • Online auto auctions give buyers more options • Examples: – Auto. com – Autobytel. com – Autoparts. com

Energy Online • Energy exchange sites allow energy providers to trade excess energy commodities, buy on auction and sell materials. • 1000’s of energy commodities are sold online. • Efficiency increases as supply chains are simplified • Examples: – Houstonstreet. com – Altranet – Retailenergy. com

Selling Brainpower • Unused patents and trademarks can be sold online • Hiring outside contractors or companies to complete projects and offer consulting. • Contractors can find projects to match their needs on the Web • Examples: – Hellobrain – Yet 2. com – Question Exchange

Online Art Dealers • Artists have access to a global audience • The Web itself is a new medium for art • Virtual galleries give artists a chance to showcase their work • Shortfilms are finding new fans online • Examples: – – Art. com Guild. com Atom. Films Art. net

Education Online • E-learning is changing the way people learn. • Web-based training and education give the world access to continuing education form their home • Many colleges and universities offer distance learning and degree programs online • Examples: – – Click 2 learn Saba Smartforce Varsitybooks. com

Hong Kong Cyber. U

Main References • e-Business & e-Commerce : How to Program, H. M. Deitel, P. J. Deitel and T. R. Nieto, Prentice Hall, 2000. • e. Business Essentials: Technology and Network Requirements for Mobile and Online Markets, 2/e, by Mark Norris and Steve West, John Wiley & Sons. • http: //ecommerce. ncsu. edu/topics/models. html