E-commerce websites

An overview of business models

Amazon.com
• Humble beginning as an online bookstore in „95 • Surpassed big-wigs like Barnes & Noble by „99 • Diversified to movies & music, home & garden tools, apparel, baby care products & even groceries • Frequent incentives like promo coupons, free shipping, price rebates • “Today‟s Special” link- hourly deals • New product prices too high- Check out used products at discount prices

• Core value proposition – Price – Convenience – Selection . but to offer low prices everyday and apply them broadly across our entire product range.• Objective Not to discount a small number of products for a limited period of time.

by spending money on brand awareness and getting new customers.Strategy : – To „get big fast‟ by investing aggressively in new product categories and new businesses. .

Kindle Fire (tablet computer) • Digital content: Amazon MP3 (downloads w/o DRM) • Amazon Prime: 1 day/ 2 day shipping at flat annual fee. provides access to Amazon Instant Video .Products & Services • Retail goods: including Amazon marketplace & AmazonFresh • Consumer electronics: Amazon kindle (e-book reader)> 850.000 titles.

Order cycle Find the product • Browse or search for the required item on the website • Choose if you want a new/ used product Add item to shopping cart • After finding the product. click on “More buying choices” Proceed to checkout • • • • Review the items in the shopping cart If you want to buy it later choose “Save to buy later” Add gift wrap/ note (optional) Click on “proceed to checkout” . click on “Add to Shopping cart” • If you want to buy from another seller.

Order cycle • Enter e-mail address for all future correspondence during the transaction & delivery period Sign in/ create new account • Enter shipping address. Delivery to PO Boxes available in the US Enter Shipping address Choose shipping method • Choose a shipping method (check separately if FREE Super saver shipping option is available) • Final estimated shipment date is displayed after order submission .

debit cards accepted.Order cycle Provide payment information • Enter payment information (All major credit. Amazon gift cards & store cards) • All orders are prepaid Review & Submit order • Review. check accuracy of all the orders • Click “Place Your Order”. confirmation e-mail is sent Check order status • Products can be reviewed & specifications can be changed prior to shipment through “Your Account” .

zShops (September „99) • 2000.Kindle Fire .Marketplace • 2007.Evolution of business model • 1995.Online book store • 1999.Auctions (March „99) • 1999.AmazonFresh • 2009.Kindle. Rental books included • 2010.

• From the start it was meant to be a marketplace for the sale of goods and services to individuals. • It is a global online trading facilitator where anyone can trade. • It has 534m users. • It is the oldest online trading portal that brought in the concept of internet buying. .eBay • An online auction platform that facilitates the transactions between buyers and sellers of goods and services. • eBay was founded by Pierre Omidyar and Linda Omidyar in September 1995.

• Acquired by eBay on October 3. .PayPal. 2002. In India: eBay has partnered with PaisaPay for secured online payments.The Payment Method of Choice • It is a global e-commerce business allowing payments and money transfers to be made through the Internet.

Consoles & Accessories Home & Kitchen Home Appliances Jewellery & Diamonds Laptops & Computer Peripherals • • • • • • • • • • • • • • • • LCD. Cosmetics & Health Services & Real Estate Shoes & Other Footwear Stamps Stationery & Office Supplies Tools & Hardware Toys.Product Categories at eBay • • • • • • • • • • • • • • • • Auto Accessories & Parts Books & Magazines Cameras & Optics Cars & Bikes Charity Clothing & Accessories Coins & Notes Collectibles Consumer Electronics Fitness & Sports Fun Stuff Games. Pen Drives & HDD Mobile Accessories Mobile Phones Movies & Music Musical Instruments Perfumes. Games & Baby Travel Watches Everything Else . LED & Plasma Televisions Memory Cards.

• Buyers and sellers are brought together in a manner where sellers are permitted to list items for sale. • The items are arranged by topics.Buy it Now or in Auction format • eBay has both streamlined and globalized trading. where each type of auction has its own category. . • Selling may be in fixed price format.Business model • eBay has built an online person-to-person trading community on the Internet. buyers to bid on items of interest.

Business model – contd. • Browsing and bidding on auctions is free of charge. but sellers are charged three kinds of charges: -Insertion Fee -Additional listing options fee -Final Percentage on Sale .

Auction format: • eBay notifies the buyer and seller via e-mail at the end of the auction if a bid exceeds the seller's minimum price. . • The binding contract of the auction is between the winning bidder and the seller only. Buy it Now format: • eBay notifies the seller via e-mail on order placement (payment) for a product from his listing.Business model – contd.

Payment: • Credit Cards. • Seller has to dispatch product within 7 days of payment. else payment is refunded to buyer by eBay.Business model – contd. online bank transfer. . • All transactions through PaisaPay in India. Debit Cards. cash cards and mobile payment.

Parameters for rating: • Time taken to dispatch • Shipping charges • Communication by Seller • Authenticity of the product • Resemblance of the actual product to seller‟s description . Feedback and Rating: • Buyer confirms receipt of product to eBay and leaves feedback for seller.Business model – contd.

• Highest bidder and seller then contact each other to make arrangements for shipment. Close of Auction • Sale ends at a pre determined time. Payment Product Dispatch • Buyer makes payment to eBay. Rating and Feedback • Buyer and seller then grade each other through feedback forums. seller sends goods.Business process flowchart of Auction Model: Listing of Product • Seller uploads photos and description. .

Advertising revenue.2% of TR Selling profit is approx 9% of TR Major money comes from listings and trading services – 89% of TR .Revenue model and profit • • • • Fees for the seller to post the item and sales commission.

Benefits • • - BUYER Massive Selection Convenient Saves time and money Value added SELLER Broadens Market Lower distribution costs Maximize selling price (auction) Repeat business .

• Ranks in the top 20 websites in India • Registered users – 3 million+ • Manpower – 4800+ • Items shipped per day – 30000 • Own delivery network – 37 cities • Subsidiaries .Flipkart • One of the leading e-commerce players in the country • Founded in 2007 by Sachin Bansal & Binny Bansal in Bangalore • Started with initial capital of INR 4 lakh. “Chakpak” and “Lets Buy” . “Mime 360”.“We Read”.

Products • 2007 .books • 2010 . health & beauty products . movies and games & mobile phone accessories • 2011 .including music.lifestyle.electronics • 2012 .

SEO. Brand Building. COD. e-gift voucher. UGC. Friends. • Provide selection • Makeing it easy to find & discover products. SEM. • Payment confirmation . WoM. • Provide details to evaluate a product • Description. • Provide convenient payment options • Online. prepaid wallet.Order Cycle • Attract users to the site • Family. Specifications. • Price well • Have to be competitive to the most obvious options.

• Packing the item • Tamper proof. breakage proof. • Tracking ID • Communicate to customer & Follow-up for timely delivery • Taking care of returns • Minimize returns . condition of the product. weather proof. • Selection of the courier • Hand over on the basis of courier performance. Planning] • Check for sanity • Pages missing. JIT] • Keep Inventory [Inventory Prediction. MRP printed.Order cycle – contd. • Get the item • Procure from Supplier [Supplier selection.

“No Kidding” ads. Customer satisfaction • SEO. . • Building the Suppliers base • Building Infrastructure for Operations • God of distribution .consignment model • Robust Logistics • Huge range of titles • UI.well-oiled warehousing and delivery system • Procurement .Success of the Business model • Discoverability. Inventory. WoM. Delivery. Payments.

Business Dealings • Dealing with suppliers:  Signing agreements with suppliers  getting them to share data feeds  getting them to fulfil your orders • Dealing with Payment Gateways • Setting up & operating large warehouses • Dealing with Couriers • People may not be as forthright & honest .

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