Chapter 2

E-MARKETPLACES: STRUCTURES, MECHANISMS,

ECONOMICS, AND IMPACTS
Learning Objectives
1. Define e-marketplaces and list their components.
2. List the major types of e-marketplaces and describe
their features.
3. Describe the various types of EC intermediaries and
their roles.
4. Describe electronic catalogs, shopping carts, and
search engines.
5. Describe the major types of auctions and list their
characteristics.

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Learning Objectives
6. Discuss the benefits, limitations, and impacts of
auctions.
7. Describe bartering and negotiating online.
8. Define m-commerce and explain its role as a
market mechanism.
9. Discuss competition in the digital economy.
10. Describe the impact of e-marketplaces on
organizations and industries.

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E-Marketplaces
E-marketplace

An online market in which buyers and

sellers exchange goods or services;
There are two types of e-marketplaces: -
-private: such as dell.com (many buyers
and one seller)
- public
: such amazon.com (many buyers
and sellers).

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E-Marketplaces

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E-Marketplaces
Marketspace

A marketplace in which sellers and buyers

exchange goods and services for money (or
for other goods and services) but do so
electronically

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 E-Marketplaces
E-Marketplace Components and Participants
1 Customers
2 Sellers
3 Products and services
◦ Digital products
Goods that can be
transformed to digital format
and delivered over the
Internet
4 Infrastructure
5 Front end
6 Back end
7 Intermediaries: third parties
that operates between sellers
and buyers
8 Other business partners
9 Support services

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E-Marketplaces
front end
The portion of an e-seller’s business processes through which
customers interact through: the seller’s portal, electronic
catalogs, a shopping cart, a search engine, and a payment
gateway

back end

The activities that support : online order fulfillment, inventory

management, purchasing from suppliers, payment processing,
packaging, and delivery

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Types of E-Marketplaces:
From Storefronts to Portals

◦ Webstore (storefront)
A single company’s Web site where products or services are sold-its an E-
store

◦ E-mall (online mall)

An online shopping center where many online stores are located

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Types of E-Marketplaces:
From Storefronts to Portals
Types of Stores and Malls
◦ General stores/malls-sell all type of product Ex: Amazon.com
◦ Specialized stores/malls-sell only one or few type of product such
as flowers, cars, toys.
◦ Regional versus global stores malls
◦ Pure-play online organizations(do not have physical stores. versus
click-and-mortar stores( physical and online)

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Information portal

 with the growing use of internet ,many organization

encounter information overload.
Finding relevant and accurate information is often time-
consuming and requires access to multiple system. One
solution to this problem is to use portals
A Portal :
Is an information gateway. It attempts to address information
overload through an internet based environment to search
and access relevant information from separate IT system.

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Types of E-Marketplaces:
From Storefronts to Portals
Information portal Types of Portals
A single point of access through a ◦ Commercial (public)
Web browser to business ◦ Corporate
information inside and/or outside
an organization ◦ Publishing
◦ Personal
◦ Mobile
◦ Voice
◦ Knowledge

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Types of Portals
◦ Commercial (public): offer content for diverse community and the
most popular portal of the internet
◦ Corporate: coordinate rich content within the relatively narrow
corporate and partners communities .
◦ Publishing: intended for communities with specific interests
◦ Personal: target specific filtered information for individuals
◦ Mobile: are portals that are accessible from mobile devices
◦ Voice: are web sites with audio interface
◦ Knowledge: Knowledge portals enable easy access to knowledge by
knowledge workers and facilitate collaboration

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Transactions, Intermediation,
and Process in E-Commerce
Sellers, Buyers, and Transactions
◦ A seller (retailer, wholesaler, or manufacturer) sells to customers
◦ The seller buys from suppliers: either raw material (as a manufacturer) or
finished goods (as a retailer)

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Transactions, Intermediation,
and Process in E-Commerce

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Transactions, Intermediation,
and Process in E-Commerce
The Roles and Value of Intermediaries in E-marketplaces.

◦ Info mediaries
Electronic intermediaries that provide or control information flow in
cyberspace, often aggregating information and selling it to others

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Transactions, Intermediation,
and Process in E-Commerce
◦ A broker : is a company that facilitates transactions between buyers and
sellers.

◦ Types of brokers.
◦ Buy/sell fulfillment
◦ Virtual mall
◦ Search agent
◦ Shopping facilitator

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 Types of brokers
Buy/sell fulfilment: A corporation that helps consumers place buy and sell orders.

Virtual mall: A company that helps consumers buy from a variety of stores, e.g.
Yahoo! Stores.
Search agent: company that helps consumers compare different stores, e.g. Shopping.com

Shopping facilitator: A company that helps consumers use online shops more easily and
potentially in a user-customised interface, by providing currency conversion, language
translation and payment and delivery solutions..

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The Roles and Value of Intermediaries in
E-marketplaces
Intermediaries (roles and value }can
address the following five important
limitations of direct interaction:

1. Search costs: it may be expensive for providers and

customer to find each other.
2. Lack of privacy: buyer or seller may wish to remain
anonymous or protect some information relevant to a trade

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Intermediaries can address the following five important
limitations of direct interaction:

3. Incomplete information: the buyer may need more information

than the seller is able or willing to provide(quality, competing or
customer satisfaction product)

4. Contract risk: consumer may refuse to pay after receiving a

product or a producer may provide inferior product.

5. Pricing inefficiencies:
to secure a desirable price for product, providers and
consumers may miss opportunities for mutually desirable
trades

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Transactions, Intermediation,
and Process in E-Commerce
E-distributor

An e-commerce intermediary that connects

manufacturers with business buyers
(customers) by aggregating the catalogs of
many manufacturers in one place—the
intermediary’s Web site

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Transactions, Intermediation,
and Process in E-Commerce
Disintermediation

Elimination of intermediaries between sellers

and buyers
Reintermediation

Establishment of new intermediary roles for

traditional intermediaries that have been
disintermediated, or for newcomers

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Electronic Catalogs
and Other Market Mechanisms
Electronic catalogs
The presentation of product information in an
electronic form; the backbone of most e-selling
sites

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Electronic Catalogs
and Other Market Mechanisms

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