ISM 3003 (Exam #3)--Week 11—- Definition of e-Commerceo E-commerce is commerce that is accelerated and enhanced through the use of IT, in particular the Internet.o E-commerce breaks down business barriers such as time, geography, language, currency, and culture- Keys to success in e-Commerceo You must understand your business, products, services, and customerso You must have a clear path-to-profitability (P2P)o You must identify your customers and determine how to reach them.o You must move money easily and securely- The major e-Commerce models o B2B Business to Business e-commerce occurs when a business sells products and services to customers who are primarily other businesses. An example of business to business e-commerce would be a rubber company selling belts and hoses to an automotive manufacturer. Business 2 business e-commerce is where all the money is right now in the e-commerce world. B2B commerce is mainly the behind the scenes interactions that businesses engage in ultimately to support interaction with you as the customer. B2B e-marketplaces are virtural market places in which businesses buy from and sell products to each other, share information and perform other important activities. B2B e-market places represent one of the fastest growing trends in the B2B e-commercemodel. Businesses are increasingly aware that they must create supply chain management systems, drive out costs, create information partnerships with other businesses and even collaborate with other businesses on new products and service offerings B2B e-marketplaces offer tremendous efficiencies to businesses for performing all of these tasks.o B2C Busisness to consumer e-commerce occurs when a business sells products and services to consumers who are primarily individuals. If you have ever ordered a book from amazon, or ordered a movie from Netflix you haveparticipated in B2C commerce. B2C e-commerce get most of the attention these days in popular media. B2C e-commerce is a very cut throat enviornent, no matter what the product or service is. The B2C e-commerce model is very different from the B2B e-commerce model. Consumers surf the web evaluating products and services at numerous e-commerce sites until they eventually choose one site from which to make a purchase. 1 While businesses prefer to enter into long term partnerships with other businesses in B2B e-commerce, consumers are fickle and purchase the same types of products and services from many different sites.o C2B Consumer to business e-commerce occurs when an individual sells products and services to a business. In a C2B e-commerce model the consumer drives supply and the business drives demand. A good example of C2B e-commerce is offered by fotolia. There an individual can post photos and videos for sale to a business. Businesses search through the archives and if they choose your photo or video they will pay you a royalty fee for use of your property. Affiliate programs are another good example of C2B e-commerce. Through an affiliate program you can post links on your personal website to products and services, and if a visitor uses that link and buys a product then a percentage of the sale will be paid to you. Currently the C2B e-commerce model represents only a fraction of the total revenues in the e-commerce world, but is expected to grow as businesses realize that individuals aremore than just consumers of products and services. Blogging can be another example of C2B e-commerce if you know what you are doing. o C2C Consumer to consumer e-commerce occurs when an individual sells products and services to other indiividuals C2C e-commerce usually takes place through an intermediary organization such as ebay. Many C2C websites don’t really support any sort of e-commerce, rather they facilitate the gathering of people with common interests and something to share. Blogs might also fall into the category of C2C, as they support people sharing and discussing common interests. Many of theses sites are as-supported, meaning they derive their revenue by selling advertising space, much like the concept of an affiliate program.o G2B Government to Business e-commerce occurs when a government entity sells products and services to a business. An example of G2B e-commerce is government surplus auctions. Another example of G2B e-commerce would be government branches selling information to companies who conduct research,o G2C Government to consumer e-commerce refers to electronic commerce activities performed between a government and its citizens or consumers including paying taxes, registering vehicles, and providing information and services.o G2G Government to Government e-commerce refers to the electronic commerce activities performed within a nations government. It can also refer to electronic commerce activities preformed between two or more nations governments such as providing foreign aid.2- What is easiest to sell in e-commerce? (B2C)o In B2C e-commerce, as a general rule, the best merchandise to sell is either commodity-like or digital or a combination of both. Commodity-like products- Commodity-like product companies compete on the basis of:o Priceo Ease and speed of deliveryo Ease of orderingo Your return policy- Easy to sell online Digital Products- Eliminate the need for shipping costs- Itunes is an example of a digital product- Types of products (B2B)o MRO vs. Direct MRO = Matinence, Repair, and Operations materials (Indirect materials)- Theses are materials that are necessary for running a modern corporation but do not relate to the company’s primary business activities. - B2B MRO materials are similar to convenience and commodity like items in the B2C e-commerce model Direct materials are materials that are used in a manufacturing company or are placed on the shelf for sale in a retail environment. - Direct materials relate to a company’s primary business activities.o Convenience vs. Specialty (B2C) In many respects you can differentiate between convenience and specialty merchandise on the basis of price and consumers frequency of purchase. Convenience merchandise is typically lower priced but something they often need, usually frequently.- Non-perishable food items are an example. Specialty merchandise items are typically ordered less frequently and priced higher than convenience items. Specialty
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