E-COMMERCE

Retailing

Submitted by:

Avgerinos George

Bolovinos Stamos

Saridimitriou Alexios

Vomvas John

E-Commerce

O’ Connor and Galvin (1998) state the term e-commerce can be used to describe any trading activity that is carried out over an electronic network such as the Internet. The Internet can be a catalyst to e-commerce by providing the necessary infrastructure. Consumers are more and more expecting web sites to help them do their retail buying. There are advantages, as well as, disadvantages resulting from the operation of e-commerce, both for consumers and retailers. E-commerce is increasing in adoption by businesses that want to implement a multichannel approach to their sales. Moreover, the appropriate know-how is needed by the retailer in order to operate in an effective manner the e-commerce activities and keep his/her customers satisfied and his/her brand name high in reputation. The transactions can be business-to-business, consumer-to-consumer or business to consumer.

ASPs

Software and service providers that implement e-commerce systems are Application Service Providers (ASPs) that assemble the functions needed by enterprises and packages them with outsource development, operation, maintenance and other services (Turban et all, 2002).  Moreover, ASPs connect the company with any other company’s computers all over the world and with any pc via WANs. The advantage of WANs is that allow easy information sharing of documents, sending and receiving of emails, over long distances making global connectivity of businesses a real case (Nickerson, 2000). 

A further important element of an EC system is to provide a secure environment for the company and for all the parties involved. This is done by creating tunnels of secure data flow, by using cryptography and authorization; an extranet, which is known as a virtual private network VPN (Turban et all, 2002).

Presenting the Web’s Business Models

It is first essential to review the models, as they are outlines in Prof. M. Rappa’s website. He defines a business model, in its most simple form, as being the method that a company chooses to generate its revenues. The business model, which a company applies as a revenue-generating source, will also position it in the value chain. Because e-commerce is yet at its early stage of maturity, M. Rappa wants to specify that the models he presents are definitely not the only one, and several new models, or amended models, will emerge in the future, all depending on the maturity/growth curve of the e-commerce. In addition, an e-tailer may choose to apply one specific model, or a combination of two or models, depending on the product/service, the philosophy of the company, the consumers’ profile, and the competition. E-commerce business models are so essential to the e-tailers, and to those who developed them, that some models have even been granted a patent to ensure it is not copied by other e-tailers. Still the patent issue is an open debate, since no model is a static form, changes are constantly taking place, and a slight difference from a patented model may or not give rise to a court dispute between the creators of the patented model and those who altered it just enough to insure it cannot be disclaimed as a copy of the patented one.

The Brokerage Model

As in all other kinds of retailing, brokers are the intermediaries who bring together the buyers and the sellers, for a fee, in order to facilitate the transactions between the two. The buyers and sellers can be consumers and/or businesses; the brokerage principle remains the same. There are several types of brokerage models, such as the marketplace exchange, the buy/Sell fulfillment, and the auction brokers. When evaluating the cosmetics e-tailers, more emphasis will be placed on the kind of brokers there are.

Join now!

The Advertising model

On the Internet, this model takes the form of advertisement banners mixed on other web pages. The banners refer to e-companies selling products and services. The visitor can follow the link from the main page to the banner’s page, in order to find out more on the advertised company’s products/services. This kind of model is most efficient when the number of viewers is very large and/or highly specialized. Advertising models include portals, classifieds, query-based paid placement, and contextual advertising

The Infomediary Model

Infomediary companies have collected and analyzed large quantities of data about consumers, products ...

This is a preview of the whole essay