Ecormmerce

Revenue Model
https://www.thefulfillmentlab.com/blog/ecommerce-revenue-
models#:~:text=Sales%20Revenue%20Model,following%20the
%20sales%20revenue%20model.

https://www.altexsoft.com/blog/revenue-model-types/

Business Model
https://ncube.com/blog/types-of-ecommerce-business-and-
revenue-models
https://www.ecommerceceo.com/types-of-ecommerce-
business-models/

How to achieve global reach?

https://dynamicbusiness.com/topics/news/how-to-achieve-
global-reach-with-ecommerce.html

Electronic Business, Electronic Commerce, and the

Emerging Digital Firm
E-commerce refers to:
 The use of the Internet and the Web to transact
business
 Digitally enabled commercial transactions between
and among organizations and individuals.
Figure 10-1

FIGURE 10-1 THE GROWTH OF E-COMMERCE

Retail e-commerce revenues have grown exponentially
since 1995 and have only recently “slowed” to a very
rapid 25 percent annual increase, which is projected to
remain the same until 2008.
The rapid growth of e-commerce since 1995 is due to the
unique features of the Internet and the Web as a
commercial medium:
 Ubiquity: Internet/Web technology is everywhere,
at work, home, and elsewhere, and anytime,
providing a ubiquitous marketspace, a marketplace
 removed from a temporal and geographical
location.
 Global reach: The technology reaches across
national boundaries.
 Universal standards: There is one set of Internet
technology standards, which greatly lower market
entry costs (the costs to bring goods to market) and
reduce search costs (the effort to find products) for
the consumer.
 Richness: Information richness refers to the
complexity and content of a message. Internet
technology allows for rich video, audio, and text
messages to be delivered to large numbers of
people.
 Interactivity: The technology works through
interaction with the user.
 Information density: Information density is the
total amount and quality of information available to
all market participants. Internet technology reduces
information costs and raises quality of information,
enabling price transparency (the ease for
consumers of finding a variety of prices) and cost
transparency (the ability of consumers to determine
the actual costs of products). Information density
allows merchants to engage in price
 discrimination (selling goods to targeted groups at
different prices).
 Personalization/customization: E-commerce
technologies permit personalization (targeting
personal messages to consumers)
and customization (changing a product or service
based on consumer preference or history.
The Internet also shrinks information asymmetry, which
occurs when one party in a transaction has more
information with respect to the transactions than the
other party. For instance, the Web has reduced the
information asymmetries surrounding auto purchases.

Digital markets are very flexible and efficient because

they allow:
 Reduced search and transaction costs
 Lower menu costs (merchant's costs of changing
prices)
 Price discrimination
 Dynamic pricing (prices changing based on the
demand characteristics of the customer or the
seller's supply situation)
 Disintermediation: Elimination of intermediaries
such as distributors or retailers
Figure 10-2

FIGURE 10-2 THE BENEFITS OF DISINTERMEDIATION TO

THE CONSUMER
The typical distribution channel has several intermediary
layers, each of which adds to the final cost of a product,
such as a sweater. Removing layers lowers the final cost
to the consumer.
The Internet digital marketplace has also greatly
expanded sales of digital goods, goods that can be
delivered over a digital network. In comparison to
traditional goods, the marginal cost of producing another
unit of a digital good is about zero, delivery costs over
the Internet are low, while marketing costs are about the
same and pricing can be variable.

E-commerce technologies have revolutionized commerce

and enabled a variety of new business models. Some
are pure-play models, based purely on the Internet.
Others may be hybrid clicks-and-mortar models, using
Web sites as an extension of a traditional business, such
as LLBean.com. New business models include:
 Virtual storefronts: Such as Amazon.com
 Information broker: Such as Realtor.com
 Transaction broker: Such as E*Trade.com
 Online marketplace: Such as Ebay.com
 Content provider: Such as iTunes.com. The ability to
deliver digital goods and digital content over the
Web has created new alternatives to traditional
print and broadcast media. Popular digital content
includes online games, digital versions of print
newspapers, Internet radio, downloadable movies,
online television broadcasts, Podcasting (Internet
audio broadcasts).
 Online service provider: Such as Salesforce.com.
 Virtual community: Such as YouTube.com; Online
communities include social networking sites, online
communities used by individuals for expanding
business or social contacts, and social shopping
sites, in which users swap shopping ideas.
 Portal: Such as Yahoo.com. Some portals combine
content from various sources, using syndication as
 well providing additional value.
Online syndicators aggregate content or
applications from multiple sources, package them
for distribution, and resell them to third-party Web
sites
These new business models may have revenue generated
from:
 Sales of traditional or digital goods
 Selling advertising space for banner ads and pop-up
ads
 Transaction fees
 Sales of marketing information collected by users
 Directing buyers to sellers