Select two ecommerce websites with totally different business models and describe their business models. Select one Australian and one International site. Electronic commerce is the term that refers to any type of business, or commercial transaction, that involves the transfer of information across the Internet (Le 2013). Ecommerce can include different types of businesses form consumer based retail sites such as asos. com, auction sites such as eBay or music sites such as iTunes or Pandora (What is ecommerce 2013). As a consumer I use ecommerce websites regularly including iTunes, Asos, Eastbay and Pandora.
Ecommerce is the largest retail growth area in the world, after getting off to a relatively slow start (What is an ecommerce website 2013). An ecommerce business model is an approach to conducting electronic business over the Internet (Baltzan et al. 2010, p. 123). Figure 1: e-Business models (Baltzan et al. 2010) Figure one details the major Ecommerce business models are used by organisations, business and consumers. EBay is an example of an International C2C model, because its site brings people together to buy sell and trade online.
This C2C Ecommerce business model has its origins from the previous newspaper classifieds such as the trading post. EBay was launched in 1995 by founder, Pierre Omidyar as a global commerce platform and payments leader connecting millions of buyers and sellers and eBay is now the world’s largest online marketplace EBay’s success has seen its expected 2013 first quarter net revenues to be in the range of $3,650-$3,750 million and full year in the range of $16, 000 – $16,500 million (Reports strong fourth quarter and full year 2012 results 2013).
EBay utilises the brokerage e-business model as it is a website that brings two parties together to conduct business. The brokerage model generally collects a fee for their service which in eBay’s case is called an insertion fee, when a user advertises an item on their site (Ecommerce Business Models for Your E-Business 2012). EBay is a website I purchase items off regularly including shoes, jumpers and cologne; I also have a family friend who makes a living from selling car parts through eBay and is now a certified power seller.
A B2C model represents the vast majority of ecommerce web sites online and is generally based in its real world counterpart, the local store. Any business that sells directly to its customers falls into the B2C business model (Ecommerce Business Models for Your E-Business 2012). An example of a B2C Australian ecommerce site is Kogan. Kogan is Australia’s largest online retailer and are 100% Australian owned. Kogan has become one of the fastest growing companies in Australia having delivered over 1, 000, 000 products (About Kogan 2013). The major bonus of an ecommerce site is that it generally can cut out the middle man, making prices cheaper.
For example Kogan can bring their customers such cheap prices because it cuts out all of the middlemen, please see figure 2. Figure 2: Kogan Supply Model (About Kogan 2013) Due to E-Business being relatively new, there is not a lot of historical data on which to base a model on. Organisations must take into account, barriers to entry, establishing the right fit with brand image, align with the company’s culture and consider the fit and mix with its existing channels (What are the ecommerce business models 2012). REFERENCES: About Kogan 2013, Kogan, viewed 14th April 2013, . About Kogan 2013, Kogan, digital image, viewed 14th April 2013, .
Baltzan, P, Phillips, A, Lynch, K & Blakey, P 2010, Business Driven Information Systems, 1st Edition, McGraw-Hill, Australia, viewed 14 April 2013, . Baltzan, P, Phillips, A, Lynch, K & Blakey, P 2010, Business Driven Information Systems, digital image, 1st Edition, McGraw-Hill, Australia, viewed 14 April 2013, . Ecommerce Business Models For Your E-Business 2012, Ecommerce Web Hosting Guide, viewed 14 April, . Le, V 2013, ‘Week 5: Business Models’, SLEB-111 Foundations of Business Systems and Ecommerce, Learning materials on Blackboard, Swinburne University of Technology, viewed 14 April 2013.
Rappa, M. A. 2004, ‘The utility business model and the future of computing services’, IBM Systems Journal, vol. 43, no. 1, pp. 35-36. Reports strong fourth quarter and full year 2012 results 2013, Ebay Inc, viewed 14 April 2013, < http://investor. ebayinc. com/releasedetail. cfm? ReleaseID=733959>. What are the ecommerce business models 2012, The Myndset, viewed 14 April 2013, . What is an ecommerce website 2013, Dot Agency, viewed 14 April 2013, . What is ecommerce 2013, Network Solutions, viewed 14 April 2013, .
