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Chapter 10 Objectives
Understand how e-commerce Identify various e-commerce
has changed today’s revenue streams
business practices
Discuss the positive impact of Know how e-retailing works
e-commerce on global society
Differentiate between the Identify e-commerce
Chapter 10 various e-commerce market sectors
business models: Discuss issues associated
E-Commerce: business-to-consumer, with building an electronic
consumer-to-consumer, storefront, accepting
A Revolution in the business-to-business, and payment, managing product
Way We Do Business business-to-employee delivery, designing a site,
managing the site, and
promoting the site
Next
p.10.2
What Is E-Commerce? What Is E-Commerce?
What is electronic commerce How are e-commerce transactions conducted?
(e-commerce)?
Financial business Primarily through desktop
transaction that occurs over computers
an electronic network Wirelessly using handheld
Sometimes called Web-enabled devices
e-business
M-commerce
E-commerce that
takes place using
Next Next mobile devices
p.10.2 Fig. 10-1 p.10.3
What Is E-Commerce? What Is E-Commerce?
What is a bricks-and-mortar business? What is a clicks-and-mortar business?
Company with a Company with a bricks-and-mortar location
physical location, such as well as an online presence
as Wal-Mart or Kmart Some companies
have online
presence
without physical
locations
–E*Trade and
Amazon.com
Next Next
p.10.3 Fig. 10-2 p.10.3 Fig. 10-3
1
What Is E-Commerce? E-Commerce Business
Models
Howhas e-commerce grown? What is business-to-consumer
Estimates are that by 2005 worldwide e-commerce (B-to-C or B2C) e-commerce?
will exceed $5 trillion Sale of
products or
services from a
business to the
general public
Next Next
p.10.4 Fig. 10-4 p.10.5
E-Commerce Business E-Commerce Business
Models Models
How might a B2C e-commerce business What is disintermediation?
operate? Sell products to
1: Customers consumers without
buy products using traditional retail consumer benefits
and services INTERINTERNETNET channels of B2C
online INTERNET Access to variety of
2: Network Enables companies to products and services
contains Web maximize benefits by without constraints of
hosting, security, eliminating middleman time or distance
and backup
3: Warehouse business benefits
receives and of B2C
Next fulfills order Next personalize offerings to
p.10.5 Fig. 10-5 p.10.5 customer's profile
E-Commerce Business E-Commerce Business
Models Models
What is consumer-to-consumer (C- What is peer-to-peer (P2P) e-commerce?
to-C or C2C) e-commerce? Users connect to
Individuals each other’s hard
using Internet disks and exchange
to sell products files directly
to other Consumer
individuals can pay another
– Online auction, consumer to copy
such as eBay file
Next Next
p.10.6 Fig. 10-6 p.10.6
2
E-Commerce Business E-Commerce Business
Models Models
What is business-to-business What are four basic types of B2B e-commerce sites?
(B-to-B or B2B) e-commerce?
Sale and exchange of products and service vendor B2B brokering B2B
between businesses Product supplier allows purchasing Acts as middleman by
Many businesses engage in both B2B and B2C agents to use network to shop, negotiating contract of
submit request for quotes (RFQs), purchase and sale
Supply chain creates and distributes products and purchase items
infomediary B2B
Provides specialized
information about
service B2B suppliers and other
businesses
Uses network to provide
Next Next one or more services to
p.10.7 Fig. 10-7 p.10.7 business
E-Commerce Business E-Commerce Business
Models Models
What is vertical B2B e-commerce? What is business-to-employee (B-
E-commerce to-E or B2E) e-commerce?
site Use of intranet technology to
specializing in handle activities that take
a particular place within a business
industry
Increases profits by reducing Also called
expenses within intrabusiness
a company
Next Next
p.10.8 p.10.8
E-Commerce Business E-Commerce Revenue
Models Streams
What are some advantages of e-commerce? What is a revenue stream?
Global market 24/7 Method a direct sales of software
Businesses have access to 459 million people with Internet access business uses to a product or rentals
Customers can conduct price comparisons easily generate income service
Feedback can be immediate Single Web site advertising
Changing information can be available quickly may use more electronic
FAQ (frequently asked questions) pages can provide easy access than one method software
to customer support of generating distribution
Ability to gather customer information, analyze it, and react revenue Web hosting
New and traditional approaches to generating revenue subscriptions
Manufacturers can buy and sell directly, avoiding the cost of the
middleman online
Distribution costs for information reduced or eliminated storage Internet access
Next Options to create a paperless environment Next services
p.10.8 Fig. 10-8 p.10.8
3
E-Commerce Revenue E-Commerce Revenue
Streams Streams
What is electronic software distribution (ESD)? How is revenue generated with software
rental?
Sale of digital ASP charges a rental fee before you can
products such access and use Web application software
as software,
music, movies, Microsoft’s Web
books, and applications are
photographs called .NET
Purchase
entitles you to Web application
download one Software application
copy of item that exists on
a Web site
Next Next
p.10.8 Fig. 10-10 p.10.9
E-Commerce Revenue E-Commerce Revenue
Streams Streams
What is advertisement revenue? How is revenue generated with an informational Web
site? Subscribers Information
Sites earn Subscribers Information
Visitors are have access available to
commissions have access available to
to much more public at no
advertisement required to to much more public at no
from advertisement information cost
advertising subscribe to information cost
sponsor when service
visitors make Provides some
information at
purchases as a no cost, but
result of requires a
clicking subscription to
advertisement access content
on Web page of entire site
Next Next
p.10.10 Fig. 10-11 p.10.10 Fig. 10-12
E-Commerce Revenue E-Commerce Revenue
Streams Streams
What is a Web hosting service? How is revenue generated with Internet
Assists people and access?
companies in hosting their Some sites,
Web site such as MSN
Provides hardware, and AOL,
software, and Web server provide Internet
communications required access
for a Web server Computer that Many have
Some provide services delivers Web pages become portals
that include managing to users offering other
payments and tracking services
inventory
Next Next
p.10.10 p.10.11 Fig. 10-14
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