E-business Model Based on Relationship of Transaction Parties

Business-to- consumer  .

The B2C model involves transactions between business organizations and consumers. It applies to any business organization that sells its products or services to consumers over the Internet. These sites display product information in an online catalog and store it in a database. The B2C model also includes services online banking, travel services, and health information and many more as shown in figure below.

Consumers are increasingly going online to shop for and purchase products, arrange financing, arrange shipment or take delivery of digital products such as software, and get service after the sale.

B2C e-business includes retail sales, often called e-retail (or e-tail), and other online purchases such as airline tickets, entertainment venue tickets, hotel rooms, and shares of stock.

Some B2C e-businesses provide high-value content to consumers for a subscription fee. Examples of e-business following this subscription model include the Wall Street Journal (financial news and articles), Consumer Reports (product reviews and evaluations), and ediels.com (nutritional counseling).

B2C e-business models include virtual malls, which are websites that host many online merchants. Virtual malls typically charge setup, listing, or transaction fees to online merchants, and may include transaction handling services and marketing options. Examples of virtual malls include excite.com, choice mall, women.com , networkweb.com , amazon.com, Zshops.com, and yahoo.com.

e business model based on the relationship of transaction parties

E-tailors that offer traditional or Web-specific products or services only over the Internet are sometimes called virtual merchants, and provide another variation on the B2C model. Examples of virtual merchants include amazon.com (books. electronics, toys, and music), eToys.com (children's books and toys), and ashford.com (personal accessories).

Some businesses supplement a successful traditional mail-order business with an online shopping site, or move completely to Web-based ordering. These businesses are sometimes called catalogue merchants. Examples include avan.com (cosmetics and fragrances), chefs (cookware and kitchen accessories), Omaha Steaks (premium steaks, meats, and other gourmet food), and Harry and David (gourmet food gifts).

Many people were very excited about the use of B2C on the Internet, because this new communication medium allowed businesses and consumers to get connected in entirely new ways. The opportunities and the challenges posed by the B2C e-commerce are enormous. A large amount of investment has gone into this and many sites have either come up or are coming up daily to tap this growing market.

Some of the reasons why one should opt for B2C are:

  • Inexpensive costs , big opportunities. Once on the Internet, opportunities are immense as companies can market their products to the whole world without much additional cost.
  • Even being in a small company, the Web can make you appear to be a big player which simply means that the playing field has been leveled by e- business. The Internet is accessed by: millions of people around the world, and definitely, they are all potential customers.
  • Reduced operational costs . Selling through the Web means cutting down on paper costs, customer support costs, advertising costs, and order processing costs.
  • Customer Searchable content, shopping carts. Promotions and interactive and user-friendly interfaces facilitate customer convenience. Thus, generating more business. Customers can also see order status, delivery status, and get their receipts online.
  • Knowledge management. Through database systems and information management, you can find out who visited your site, and how to create, better value for customers.

Processes in B2C (How Does B2C Work?)

B2C e-commerce is more than just an online store. It really is about managing the entire process, but just using technology as a tool for order processing and customer support.

Following figure depicts the processes in B2C.

e business model based on the relationship of transaction parties

The B2C process is now explained in greater details:

  • Visiting the virtual mall . The customer visits the mall by browsing the online catalogue—a very organized manner of displaying products and their related information such as price, description, and availability. Finding the right product becomes easy by using a keyword search engine. Virtual malls may include a basic to an advanced search engine, product rating system, content management, customer support systems, bulletin boards, newsletters and other components which make shopping convenient for shoppers.
  • Customer registers . The customer has to register to become part of the site's shopper This allows the customer to avail of the shop's complete services. The customer becomes a part of the company's growing database and can use the same for knowledge management and data mining.
  • Customer buys products . Through a shopping cart system, order details, shipping charges, taxes, additional charges and price totals are presented in an organized manner. The customer can even change the quantity of a certain product. Virtual malls have a very comprehensive shopping system, complete with check-out forms.
  • Merchant processes the order . The merchant then processes the order that is received from the previous stage and fills up the necessary forms.
  • Credit card is processed . The credit card of the customer is authenticated through a payment gateway or a bank. Other payment methods can be used as well, such as debit cards, prepaid cards, or bank-to-bank transfers.
  • Operations management . When the order is passed on to the logistics people, the traditional business operations will still be used. Things like inventory management. total quality management, warehousing, optimization and project management should still be incorporated even though it is an e-business. Getting the product to the customer is still the most important aspect of e-commerce.
  • Shipment and delivery . The product is then shipped to the customer. The customer can track the order/delivery as virtual malls have a delivery tracking module on the website which allows a customer to check the status of a particular order.
  • Customer receives . The product is received by the customer, and is verified. The system should then tell the firm that the order has been fulfilled.
  • After-sales service . After the sale has been made, the firm has to make sure that it maintains a good relationship with its This is done through customer relationship management or CRM.

The example of the www.amazon.com site also involves the B2C model in which the consumer searches for a book on their site and places an order, if required. This implies that a complete business solution might be an integration solution of more than one business model.

For example, www.amazon.com includes the B2B model in which the publishers transact with Amazon and the B2C model in which an individual consumer transact with the business organization.

The B2C model of e-commerce is more prone to the security threats because individual consumers provide their credit card and personal information n the site of a business organization. In addition, the consumer might doubt that his information is secured and used effectively by the business organization. This is the main reason why the B2C model is not very widely accepted. Therefore, it becomes very essential for the business organizations to provide robust security mechanisms that can guarantee a consumer for securing his/her information.

Business-to-Business

The B2B model involves electronic transactions for ordering, purchasing, as well as other administrative tasks between business houses. It includes trading goods, such as business subscriptions, professional services, manufacturing, and wholesale dealings. Sometimes in the B2B model, business may exist between virtual companies, neither of which may have any physical existence. In such cases, business is conducted only through the Internet.

Let us look at the example of www.amazon.com. As you know, www.amazon.com is an online bookstore that sells books from various publishers including Wrox, O’Reilly, Premier Press, and so on. In this case, the publishers have the option of either developing their own site or displaying their books on the Amazon site (www.amazon.com), or both.

The publishers mainly choose to display their books on www.amazon.com at it gives them a larger audience. Now, to do this, the publishers need to transact with Amazon, involving business houses on both the ends, is the B2B model as shown in figure below.

e business model based on the relationship of transaction parties

Thus, B2B is that model of e-commerce whereby a company conducts its trading and other commercial activity through the Internet and the customer is another business itself. This essentially means commercial activity between companies through the Internet as a medium.

This is supposed to be a huge opportunity area on the Web. Companies have by and large computerized all the operations worldwide and now they need to go into the next stage by linking their customers and vendors.

This is done by supply chain software, which is an integral part of your ERP application. Companies need to set up a backbone of B2B applications, which will support the customer requirements on the Web. Many B2B sites are company and industry specific, catering to a community of users, or are a combination of forward and backward integration. Companies have achieved huge savings in distribution- related costs due to their B2B applications.

Major Advantages of B2B

  • Direct interaction with customers . This is the greatest advantage of e-business.
  • Focused sales promotion . This information gives authentic data about the likes, dislikes and preferences of clients and thus helps the company bring out focused sales promotion drives which arc aimed at the right audience.
  • Building customer loyalty . It has been observed that online customers can be more loyal than other customers if they are made to feel special and their distinct identity is recognized and their concerns about privacy are respected. It has also been found that once the customers develop a binding relationship with a site and its product, they do not like to shift loyalties to another site or product.
  • Scalability . This means that the Web is open and offers round-the-clock access. This provides an access never known before, to the This access is across locations and time zones. Thus a company is able to handle many more customers on a much wider geographical spread if it uses an e-business model. The company can set up a generic parent site for all locations and make regional domains to suit such requirements. Microsoft is using this model very successfully.
  • Savings in distribution costs . A company can make huge savings in distribution, logistical and after-sales support costs by using e-business models. Typical examples are of computer companies, airlines, and telecom companies.

Processes for Business-to-Business Transactions and Models

B2B interactions involve much more complexity than B2C. For instance, typical B2B transactions include, among others, the following steps:

  • Review catalogues
  • Identify specifications
  • Define requirements
  • Post request for proposals (REP)
  • Review vendor reputation
  • Select vendor
  • Fill out purchase orders (PO)
  • Send PO to vendor
  • Prepare invoice
  • Make payment
  • Arrange shipment and
  • Organize product inspection and reception

Due to the large number of transactions involved, business-to-business operations can be too risky if e-business sites cannot guarantee adequate quality of service in terms of performance, availability and security.

Consumer-to-Consumer

The C2C model involves transaction between consumers. Here, a consumer sells directly to another consumer. eBay and www.bazee.com are common examples of online auction Web sites that provide a consumer to advertise and sell their products online to another consumer.

However, it is essential that both the seller and the buyer must register with the auction site. While the seller needs to pay a fixed fee to the online auction house to sell their products, the buyer can bid without paying any fee. The site brings the buyer and seller together to conduct deals as shown in figure below.

e business model based on the relationship of transaction parties

Let us now look at the previous figure with respect to eBay. When a customer plans to sell his products to other customers on the Web site of eBay, he first needs to interact with an eBay site, which in this case acts as a facilitator of the overall transaction.

Then, the seller can host his product on www.ebay.com, which in turn charges him for this. Any buyer can now browse the site of eBay to search for the product he interested in. If the buyer comes across such a product, he places an order for the same on the Web site of eBay. eBay now purchase the product from the seller and then, sells it to the buyer. In this way, though the transaction is between two customers, an organization acts as an interface between the two organizations.

There are also a number of new consumer-to-consumer expert information exchanges that are expected to generate $6 billion in revenue by 2005. Some of these exchanges, such as AskMe.com and abuzz, are free, and some allow their experts to negotiate fees with clients.

InfoRocket.com, one of the first question-and-answer marketplaces, is driven by a person-to- person auction format. The InfoRocket.com bidding system allows a person who submits a question to review the profiles of the "experts" who offer to answer the question. When the person asking the question accepts an "expert" offer, infoRocket.com bills the person's credit card, delivers the answer, and takes a 20 percent commission.

Consumer to Business

The C2B model involves a transaction that is conducted between a consumer and a business organization. It is similar to the B2C model, however, the difference is that in this case the consumer is the seller and the business organization is the buyer. In this kind of a transaction, the consumers decide the price of a particular product rather than the supplier. This category includes individuals who sell products and services to organizations. For example, www.monster.com is a Web site on which a consumer can post his bio-data for the services he can offer. Any business organization that is interested in deploying the services of the consumer can contact him and then employ him, if suitable as shown in figure.

e business model based on the relationship of transaction parties

C2B Business Model

Let us look at another example of the C2B model. William Ward needs to buy an airline ticket for his journey from New York to New Jersey. William needs to travel immediately. Therefore, he searches a Web site for a ticket. The Web site offers bidding facility to people who want to buy tickets immediately. On the Web site, William quotes the highest price and gets the ticket.

In addition to the models discussed so far, five new models are being worked on that involves transactions between the government and other entities, such as consumer, business organizations, and other governments. All these transactions that involve government as one entity are called e-governance. The various models in the e-governance scenario are:

e business model based on the relationship of transaction parties

  • Government-to-Government (G2G) model : This model involves transactions between 2 governments. For example, if the American government wants to by oil from the Arabian government, the transaction involved are categorized in the G2G model.
  • Government-to-Consumer (G2C) model : In this model, the government transacts with an individual consumer. For example, a government can enforce laws pertaining to tax payments on individual consumers over the Internet by using the G2C model.
  • Consumer-to-Government (C2G) model : In this model, an individual consumer interacts with the government. For example, a consumer can pay his income tax or house tax online. The transactions involved in this case are C2G transactions.
  • Government-to-Business (G2B) model : This model involves transactions between a government and business organizations. For example, the government plans to build a fly over. For this, the government requests for tenders from various Government can do this over the Internet by using the G2B model.
  • Business-to-Government (B2G) model : In this model, the business houses transact with the government over the For example, similar to an individual consumer, business houses can also pay their taxes on the Internet.

E-Business models based on the relationship of Transaction Types

Based on transaction type, different types of transactions can be identified as listed below:

  • Info-mediary
  • Value chain
  • Advertising

These transaction types take place in a variety of ways. Moreover, any given firm may combine one or two of these as part of its web business strategy.

1) Brokerage Model

Brokers are market-makers: they bring buyers and sellers together and facilitate transactions. Brokers play a frequent role in business-to-business (B2B), business-to-consumer (B2C), or consumer-to-consumer (C2C) markets. Usually a broker charges a fee or commission for each transaction it enables. The formula for fees can vary depending on context. Brokerage models include:

Marketplace Exchange : offers a full range of services covering the transaction process, from market assessment to negotiation and fulfillment. Some examples are [ Orbitz , ChemConnect ]

Buy/Sell Fulfillment : takes customer orders to buy or sell a product or service, including terms like price and delivery. Some examples are [ CarsDirect, Respond.com ]

Auction Broker : conducts auctions for sellers (individuals or merchants). Broker charges the seller a listing fee and commission scaled with the value of the transaction. Auctions vary widely in terms of the offering and bidding rules. Some examples are [ eBay ]

Transaction Broker : provides a third-party payment mechanism for buyers and sellers to settle a transaction. Some examples are [ PayPal, Escrow.com ]

Search Agent : a software agent or "robot" used to search-out the price and availability for a good or service specified by the buyer, or to locate hard to find information.

Virtual Marketplace or virtual mall : a hosting service for online merchants that charges setup, monthly listing, and/or transaction fees. It may also provide automated transaction and relationship marketing services. Some examples are [zShops and Merchant Services at Amazon.com ]

2) Aggregator Model  

Electronic commerce business model where a firm (that does not produce or warehouses any item) collects (aggregates) information on goods and/or services from several competing sources at its website. The firm's strength lies in its ability to create an 'environment' which draws visitors to its website, and in designing a system which allows easy matching of prices and specifications. Aggregator model includes:

Virtual Merchant : this is a business that operate only from the web and offers either traditional or web specific goods and services. The method of selling may be listing price or auction. Some example includes [Amazon, eToys]

Catalog Merchant : Catalog business is a migration of mail order to web-based order business.

Bit Vendor : This is the merchant that deals strictly in digital products and services in its purest form.

Subscription model : The users have to pay for the access of the site. High value added content should be essential for subscription model. Some examples are [Wall street journal, Consumer Reports]

3) Info-mediary Model

Data about consumers and their consumption habits are valuable, especially when that information is carefully analyzed and used to target marketing campaigns. Independently collected data about producers and their products are useful to consumers when considering a purchase. Some firms function as infomediaries (information intermediaries) assisting buyers and/or sellers understand a given market. Info-mediary model includes:

Advertising Networks : feed banner ads to a network of member sites, thereby enabling advertisers to deploy large marketing campaigns. Ad networks collect data about web users that can be used to analyze marketing effectiveness. [DoubleClick]

Audience Measurement Services : online audience market research agencies. [Nielsen//Netratings]

Incentive Marketing : customer loyalty program that provides incentives to customers such as redeemable points or coupons for making purchases from associated retailers. Data collected about users is sold for targeted advertising. [Coolsavings]

Metamediary : facilitates transactions between buyer and sellers by providing comprehensive information and ancillary services, without being involved in the actual exchange of goods or services between the parties. [Edmunds]

4) Community Model

The viability of the community model is based on user loyalty. Users have a high investment in both time and emotion. Revenue can be based on the sale of ancillary products and services or voluntary contributions; or revenue may be tied to contextual advertising and subscriptions for premium services. The Internet is inherently suited to community business models and today this is one of the more fertile areas of development, as seen in rise of social networking.

Open Source : software developed collaboratively by a global community of programmers who share code openly. Some examples are [Red Hat, Linux]

Open Content : openly accessible content developed collaboratively by a global community of contributors who work voluntarily. [Wikipedia]

Public Broadcasting : user-supported model used by not-for-profit radio and television broadcasting extended to the web. A community of users supports the site through voluntary donations. [The Classical Station (WCPE.org)]

Social Networking Services : sites that provide individuals with the ability to connect to other individuals along a defined common interest (professional, hobby, romance). Social networking services can provide opportunities for contextual advertising and subscriptions for premium services. [Facebook, Orkut]

5) Value Chain Model

Value chain selling is supported through two business models: demand chain and a supply chain; E-Commerce supports the transactions through both the demand chain business model and supply chain business model.

Products, goods, services, or information are delivered through the parties of the value chain from producers to end users. A value chain also has relationship and administrative aspects, that is, you can manage the relationship of the partners or enterprises in your value chain, as well as offer some administrative services to those parties.

As a result, value chain business models must manage the two sides of their businesses: their customers and direct sales, and their channel partners and suppliers. Each requires its own management channels and practices.

To sell directly to customers (direct sales), value chain models usually include a storefront, where customers can purchase their goods or services directly. To manage relationships with partners or suppliers, the demand chain and a supply chain models within the value chain include a hub.

6) Advertising Model

The web advertising model is an extension of the traditional media broadcast model. The broadcaster, in this case, a web site , provides content (usually, but not necessarily, for free) and services (like email, IM, blogs) mixed with advertising messages in the form of banner ads. The banner ads may be the major or sole source of revenue for the broadcaster. The advertising model works best when the volume of viewer traffic is large or highly specialized. Advertising model includes:

Portal : usually a search engine that may include varied content or services. A high volume of user traffic makes advertising profitable and permits further diversification of site services. Some common examples are [Google, Yahoo!]

Classifieds : list items for sale or wanted for purchase. Listing fees are common, but there also may be a membership fee. [Monster.com, Craigslist]

User Registration : content-based sites that are free to access but require users to register and provide demographic data. Registration allows inter-session tracking of user surfing habits and thereby generates data of potential value in targeted advertising campaigns. [NYTimes]

Contextual Advertising / Behavioral Marketing : For example, a browser extension that automates authentication and form fill-ins, also delivers advertising links or pop-ups as the user surfs the web. Contextual advertisers can sell targeted advertising based on an individual user's surfing activity.

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The Leading Source of Insights On Business Model Strategy & Tech Business Models

e-business-model

What is an E-business model?

E- business models utilize advanced communication technologies and digital information to streamline various business processes online. These processes include customer relationship management (CRM), supply chain management, payment processing, employee services and recruitment, and information sharing.

Table of Contents

Understanding E-business models

E- business models are used by companies to create value and become profitable online.

E- business models were developed in response to the increasing prevalence and technological capabilities of the internet.

Seemingly overnight, the internet removed geographical barriers and allowed businesses to operate wherever it was available.

Businesses can now enter new markets with ease and can be open 24 hours a day, 7 days a week for very little outlay.

This shift has resulted in four broad transformations:

  • Domestic business to multinational business.
  • An economy based on industrial manufacturing to one that characterized by knowledge-based services.
  • Enterprise resource management to enterprise network management, and
  • Manual, document-driven business processes to those that are electronic, automated, and paperless.

With e- business models developed to take advantage of these transformations, they have virtually rendered traditional models of organizational design obsolete.

The four components of E-business models

In general terms, E- business models should have four components:

Value proposition

value-proposition-canvas-business-model-canvas

Advances in IT and communications have enabled many E-businesses to create and deliver various forms of customer value.

For example, Dell uses the internet to sell customizable, direct-to-consumer PCs.

Other companies offer value in the form of reduced prices, fast delivery, or access to more diverse inventories.

Customer relationships

There is a limit to how much an offline business can interact with its customers.

For the e-business, however, customer relationships have benefitted from data collection, increased communication, order tracking, and personalized support.

Revenue streams

revenue-modeling

When clarifying revenue streams, it’s important to look beyond obvious sources of income such as eCommerce.

Other sources include advertising, licensing, sales commissions, syndication, subscription, and sponsorship.

Activities, capabilities, and resources

Like traditional business models, e- business models must define how the mission or vision of the company will be carried out and how much it will cost.

Some of these methods may be patented – such as Amazon’s 1-click checkout process – while others can be utilized for free.

E- business models also place more of an emphasis on less tangible resources such as intellectual property, software, customer data, and other IT infrastructure.

E-business model types

digital-business-models

Let’s conclude by taking a look at some common e- business model types categorized according to functionality and transaction type.

Functionality

  • Community model – a model used by Facebook, Wikipedia, and Flickr where communities share information, photos, or opinions. Revenue is earned via donations, advertising, and subscriptions.
  • Advertising model – where businesses such as newspapers and journals provide content to readers and serve ads to generate revenue.
  • Brokerage model – companies such as eBay and Amazon make money by bringing buyers and sellers together.

Transaction type

  • Business-to-consumer (B2C) – where merchants sell products and services to buyers who then purchase them online.
  • Business-to-business (B2B) – electronic transactions that occur between two businesses. Many SaaS companies follow this model.
  • Consumer-to-business (C2B) – the reverse of B2C where consumers sell to businesses. A freelance graphic designer may sell a logo to a company, for example.
  • Consumer-to-consumer (C2C) – this model is prevalent on online auction sites and other marketplaces for consumers.
  • Business-to-government (B2G) – where government procures products, services, or information from external contractors. For example, governments that require city and open space maintenance will solicit these services from private companies.

Case Studies

Functionality-Based E-business Models:

  • Facebook : A social media platform where users share information, photos, and opinions. Revenue is earned through advertising.
  • Wikipedia : An online encyclopedia where the community collaboratively creates and edits articles. It relies on donations for funding.
  • Google : Provides search engine services and earns revenue through targeted advertising.
  • YouTube : A video-sharing platform that generates income through advertising and premium subscriptions.
  • eBay : Connects buyers and sellers for online auctions and sales, earning fees from successful transactions.
  • Amazon : Facilitates online shopping by bringing together sellers and buyers while selling its own products.

Transaction-Based E-business Models:

  • Amazon : Sells a wide range of products directly to online consumers.
  • Netflix : Offers streaming services directly to individual subscribers.
  • Alibaba : Connects businesses with suppliers and manufacturers, facilitating wholesale transactions.
  • Salesforce : Provides cloud-based customer relationship management (CRM) solutions to businesses.
  • Upwork : A platform where freelancers offer their services to businesses or individuals looking to hire.
  • Fiverr : Allows individuals to offer various digital services and products to businesses.
  • eBay : Enables individuals to sell products to other individuals through online auctions and fixed-price listings.
  • Airbnb : Lets individuals rent their properties or accommodations to other individuals for short-term stays.
  • FedBid : Connects businesses with government agencies for procurement and contracting.
  • Grants.gov : Facilitates the application process for government grants and funding opportunities.

Key takeaways:

  • E- business models are used by companies to create value and become profitable online. These models have taken advantage of the proliferation and technological advancement of the internet, rendering offline models almost obsolete.
  • Most e- business models will incorporate four components: value proposition, customer relationships, revenue streams, and activities, capabilities, and resources.
  • Various e- business model types have been developed over the years. In terms of functionality, some examples include the community model, advertising model, and brokerage model. The ever-evolving and diverse transaction types include B2C, B2B, C2B, C2C, and C2G.

Key Highlights:

  • E-business Models Overview : E- business models utilize digital technologies and the internet to optimize various business processes, including customer relationship management, supply chain management, payment processing, employee services, and information sharing.
  • Evolving Due to the Internet : The development of e- business models is a response to the internet’s transformative capabilities, which have removed geographical barriers and allowed businesses to operate globally 24/7 with minimal overhead.
  • Four Transformations : E- business models have brought about four significant transformations: from domestic to multinational business, from industrial manufacturing to knowledge-based services, from enterprise resource management to enterprise network management, and from manual, document-driven processes to electronic, automated, and paperless operations.
  • Value Proposition : Focused on delivering customer value through various means such as customization, reduced prices, fast delivery, and more.
  • Customer Relationships : Enhanced through data collection, increased communication, order tracking, and personalized support.
  • Revenue Streams : Diverse revenue sources beyond e-commerce, including advertising, licensing, sales commissions, syndication, subscription, and sponsorship.
  • Activities, Capabilities, and Resources : Define how the company’s mission or vision will be executed, emphasizing intellectual property, software, customer data, and IT infrastructure.
  • Community Model : Examples include Facebook, Wikipedia, and Flickr, with revenue from donations, advertising, and subscriptions.
  • Advertising Model : Used by newspapers and journals, providing content to readers while generating revenue from ads.
  • Brokerage Model : Companies like eBay and Amazon profit by connecting buyers and sellers.
  • Business-to-Consumer (B2C) : Merchants sell products and services directly to online buyers.
  • Business-to-Business (B2B) : Electronic transactions occur between two businesses, commonly seen in SaaS companies.
  • Consumer-to-Business (C2B) : Consumers sell to businesses, such as freelance graphic designers offering services to companies.
  • Consumer-to-Consumer (C2C) : Found on online auction sites and marketplaces where consumers engage in transactions.
  • Business-to-Government (B2G) : Governments procure products, services, or information from external contractors, such as city maintenance services.

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Level of Digitalization

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Home » Information Systems Management » E-Business Model – Meaning, Elements and Types

E-Business Model – Meaning, Elements and Types

In this Globalization era the developed, undeveloped and developing countries are preparing their societies and communities for globalization. The globalization is possible only because of revolution in communication technology. The concept of global economy is emerging which is making e-business, an indivisible component of business strategy planning. Banking, tourism, shopping, hotel booking, airlines booking, auctioning and the list is non-ending. Millions of internet users just rely for their financial as well as other services on their online transactions. As more and more people have started using internet, more specifically e-business, for their day to day working, e-business has become more and more popular. The excitement of using e-services has grown and the potential for success of businesses increased.

As more and more companies have started using internet for their business growth , some problems have to be understood properly and the solutions to them have to be thought carefully. At one stage, all companies were rushing to build their e-commerce website, just to beat the competition. But these websites were just consumer sites which were only to help consumer to see the list of products and their pricings etc. Thus, if the company gets an order on internet, they have to manually prepare the order (on paper) and send the same to manufacturer. The manufacturers too had their own websites, but those were not connected to the supplier site. As these websites were not connected, customer could never be able to understand what’s their current order status is, the companies were duplicating lots of work which led to no complete utilization of power of internet.

But now a day, having an e-commerce website is not sufficient. It doesn’t differentiate you from all your competitors. Consumers expect a lot more than just a website and e-catalogue. They expect a lot from e-business more than just shopping, such as order tracking, various services (hardware or software), auctioning etc. from e-business. E.g. if an e-business website of some xyz organization gives better offer in terms of prices of the products, but doesn’t support any other e-business advantages such as order tracking, online payments etc. and other company website may charge higher prices, but supports all these e-business advantages; consumers may prefer the other website. Even though the prices of the products are towards higher side, they may feel it more convenient as well as reliable as they can track their order (and so the money..) at any time and may prefer to invest for the sake of comfort.

Thus, the emerging new e-businesses are not constrained to size, type, technology, assets or infrastructure. The competitors for the companies enter into e-business markets with very low constraints. Customers’ and suppliers’ expectations are also rising. This makes finally the organizations to start thinking about integrating business partners and processes for real time transaction processing. Organizations that could understand the power of e-business and started addressing the complete ‘ business cycle ‘ integration have actually understood the e-business importance and are working towards utilizing the power of internet technologies. Organizations thus need to architect a complete planning framework, which is nothing but an actual e-business model which enables the organization to implement the whole business cycle on internet. E-business is an ensemble of electronic technologies which integrate and empower the business entities and processes to deliver higher value to customers and other stakeholders .

E-business is thus the integration of e-commerce and other value chain processes over the internet. Value chain processes in e-business, extends the traditional concept of supply chain processes in e-commerce. In addition to supply chain, it also provides the functionalities such as planning, purchase management, Customer Relationship Management etc. online. To make an e-business successful, all of these processes have to be tightly integrated on the internet which gives the ability to the organizations to manufacture, sell and deliver the products / services, quickly and efficiently.

E-business Model

A business model is a framework with all business components to create value and meet business objectives. A business model is a set of business processes to achieve the business objectives. It’s a core architecture around which the whole business of the organization is woven. It gives the direction to implement various business processes. The business model is important as it gives structured approach to guide idea generation in early phase of the business. It also works as planning tool to define business plan and implement it. It performs as communication tool to communicate internally with various departments of the organizations as well as with partners, customers and other stake holders.

Even in e-commerce, there are many intermediate people / parties involved before the actual goods are delivered to the end customers. These intermediate people / suppliers are now integrated to a great extent with e-business. The evolution of information technology and business models has gone through various stages. The flow of information and data has replaced the intermediaries. The complexity of the overall business model has increased, but it has also resulted in improved usability. The recent complex e-business models are developed from the perspective of making them more efficient and user-friendly.

E-business model enables innovative deployment of its resources, to make the e-business objective successful. The various factors taken into consideration in this type of business model can be listed as – the offerings and value proposition, promises of the organizations, benefit or value which an organization promises to its customers, revenue model / cash flow, Market forces and available opportunities, competition, means and strategies of positioning of the product, marketing strategies of the company, the strategic use and positioning of information technology, organizational structure and development, management team, knowledge assets and the strategies for managing knowledge in an organization and so on. It should have a mention on all those aspects which help design an e-business and help make it successful.

For an e-business organization, the competition is not only from big sellers, but it’s evenly from every business on the same line. Hence, an e-business model has to plan to optimize the technology usage in e-business to develop business processes such that it will be able to achieve e-business objectives competitively. It thus represents the architecture for the products, services the organization offers and the flow of information among various departments. It can include a description of the various actors from the value chain management and their roles, revenues etc. An e-business model helps understand the relationship between and communicate among, various business partners taking part in the value chain management.

Understanding e-business has various advantages such as – an e-business model plans to optimize the technology usage to develop various processes to sustain e-business competition, it formulates the various elements in value chain management and explains the relationship among them, this further leads to proper communication among various partners of business chain management in an e-business organization, it gives a structured representation of overall business and business strategies, this helps to understand relevant measures to be applied in various e-business processes / domains to be applied in an e-business.

Elements of E-business Models

A typical e-business model helps an organization to structure its business processes, so that it will become more open and responsive to customer expectations. It also helps to foreseen the possible future state of affairs and attempts to keep ready to face them so that to remain competitive even then.

An e-business model is thus the organization along with a network of partners. A basic e-business model can then have five major elements.

1. Products / Services

The products / services company offer is nothing but a value proposition for which a customer is ready to pay. Due to information technology as well as communication technology, various ways are evolved to create and deliver value to the customers. One way to achieve it is by removing mediators between suppliers and customers. E.g. Dell, a biggest manufacturer of personal computers had started for the first time to sale their products direct to customers . Another way to improve value proposition is by customization . Because of this, a company can offer their products as per the specific requirement of the customer. E.g. Amazon.com can identify and put for the, other books the customer may choose as per their choice, by looking into the list of books the customer is currently trying to buy. This helps customers to select books from a wide range of books available with Amazon.com to fulfill their needs. Customization can also be applied to marketing activity of the business so that the products can be identified as per a specific geographical area or specific cultural, age group etc. and can be used better marketing schemes to focus on such customer groups.

Because of e-business evolution, companies can define different business strategies for different regions to achieve better customer satisfaction .

2. Customer Relationship

Customer satisfaction is the base of any business – traditional or e-business. In traditional businesses, there’s still a limit on satisfying the customer, whereas in e-businesses using IT and World Wide Web, it can offer a whole big range of opportunities to make customer feel satisfied, feel special! Customer relationship asset mainly emphasizes on the communication between the organization and the customers.

Organizations can collect and maintain information / knowledge about their customers and take advantage of it in order to discover new market segments, attract the existing customer groups and maintain the relationship with all types of customers. This can also help customize the product according to the demand. E.g. an e-business company can frequently collect feedback from its users and accordingly improve the products / services the company offers. This makes feel satisfied to the users and at the same time can attract new customers.

Providing additional services to the customers helps improve customer relationship e.g. Printer sellers can provide online free downloads of printer drivers, user manuals etc. Another example can be, real time information of a particular purchase can help customers to keep track of their orders and also gives a big relief to the customer call center. E.g. Courier services such as DHL or DTDC lets its customers to track their shipments any time on the internet.

3. Structural Resources

The structural resources element of the e-business model is essential element to improve on value proposition. An organization has to first invest in resources needed for an e-business establishment, which further generate value for the customers. The resources can be machinery, equipment’s or even human resources.

4. Virtual Network

An e-business form a virtual network of business partners to create value chain. This part of e-business model describes how value creation process is distributed among the partners of the virtual network. It helps in maintaining long term inter-organizational relationships as well as to reduce the transactional cost by improving more on virtual network relationships.

5. Financial Aspects

This part of e-business model helps to understand the costs to be invested in information technology infrastructure to create value out of e-business. Costs can also be needed to create the value, market it and finally deliver it to the end customer.

Types of E-Business Models

Following is a classification of e-business models based on different aspects.

E-business Models Based on Functionality

  • Merchant Model is a most common e-business model in which businesses sell their goods as well as services using information technology to the customers on internet. The example websites are of Amazon.com, Alibaba.com and so on.
  • Community model is another type of e-business model in which there are different user communities who share their data, opinions and photos etc. using these websites. The examples are Flickr.com, Wikipedia.com, Facebook.com etc. Such business models earn money through the advertising or voluntary donations. A Subscription model can be viewed as an e-business in which the e-business organization charges users for using their services. Example can be AOL, You telecom etc.
  • The e-business organizations which follows the advertising model , provides some contents for the readers which generates good web traffic, along with ads which generates revenue. Example businesses in this model type are newspaper websites which provides news as well as ads for the readers.
  • Another model of e-business can be called as brokerage model which brings buyer organization and seller organization together on the web. Example can be eBay, Sify shopping etc.

E-business Models Based on Transaction Types

The e-business transactions take place between different parties, using different means. One way of looking e-business models is based on parties taking part in e-business transactions and the means of the transactions.

1. B2B E-business Model

Over the last few years, the internet has brought the companies to a virtual marketplace and built what is known as “Digital economy”. Digital economy offers various opportunities for the companies to step into new markets, improve efficiency, benchmark with global companies, increase customer satisfaction, collaboration with new partners and above all to reduce cost. The use of internet in the Business-to-Business transaction is one such area where all these opportunities can be grabbed. It refers to electronic transactions of information among companies and their supply chain partners.

Business to business is the most common type of business transactions. Close to 75% to 80% of transactions are of this type. Providers, distributors, players and manufacturers and other ancillary organizations perform various business transactions among themselves. These all transactions are referred to as B2B.

Various logistics related transactions, distribution of material and storage or warehousing is one class of B2B transactions. Another major area of B2B e-business is the outsourcing of activities related to electronic transactions. There are various solutions those are outsourced that include project development, web-hosting, security services. In some cases there is a part of process outsourced. All Knowledge Process Outsourcing (KPOs) and Business Process Outsourcing (BPOs) use electronic means for transactions and are examples of B2B models. Other examples are companies involved in online bidding, web-service enhancers, On-line intra-company and inter-company marketing, the inter bank transfers, financial transactions among companies (for various reasons) and so on.

2. B2C E-business Model

B2C (Business-to-Consumer) e-business model is actually a concept of on-line distribution or on-line selling of services, products or information from companies to actual consumers. B2C model is ensemble of electronic technologies and business transactions used for the transactions between companies and consumers. This is second most popular e-business model after B2B. This includes different transactions between companies and consumers.

In B2C business environment, there is no need to maintain any physical store / warehouse to maintain product inventory or WIP. And as such no need of retailers to distribute the product. Customers can directly search through the product catalog on the company website, places the order and the product are delivered to the customer directly. Amazon.com is a perfect example of this kind of B2C business. The main things which are browsed and sell in B2C e-business include computer hardware and software (e.g. Dell), consumer electronics (e.g. digital cameras, printers, mobile phones etc.), sports goods, office supplies, books, music, toys, health and beauty, entertainment, apparel, cars, services etc.

The major activities involved in this type of e-business model can be information sharing, ordering products/services from the company, making payment against the order by various methods such as credit card, digital cash etc., fulfilling the consumer order by physically delivering the product/service to the end customer and finally providing after sales service and support.

3. C2C E-business Model

The introduction of e-business has helped to create a very individualistic and independent society. Consumers no more want to rely on corporations for business and looking for their own business transactions on the internet.

Consumer to Consumer e-business model refers to business transaction made by consumer with other group of consumer. E.g. the individuals interacting through some well-known portal or the auction site (e.g. eBay) or the individuals advertise their product through some site using classifieds or advertisement. The most well known example of Consumer to Consumer e-business is eBay.com. It’s the most famous and successful website for auctioning nearly all kinds of items. It allows customers to auction their owned items privately among other customers. The other examples of successful Consumer to Consumer e-businesses can be Monster.com, uBid.com etc. These websites provides valuable services to those consumers looking for jobs and auctioning of items respectively. Consumer to Consumer applications are growing in size every day and making more and more people involved in e-businesses.

4. B2G E-business Model

Internet has great potential to bring together people, businesses and facilitate the flow of information among them. Government organizations are also coming ahead to utilize this power of internet. Business to Government e-business model explores the switching of products / services / information from a business organization to a government agency and vice versa. B2G business model allows the businesses to bid on government request proposals or tenders. A website offering B2G business model can provide their customers a single place where they can easily locate tax forms for various levels of the government such as city, state or country. It can also provide the facility to send the filled forms along with relevant payments. It can also make a platform available where their customers can ask questions regarding government processes and get correct, quick answers. B2G can also include applications and databases designed to help functioning of government agencies. Thus it includes different transactions made between business organizations, citizens and government agencies.

To improve / increase the activities within an economy, government can facilitate and nurture e-business initiatives within the economy. This includes facilitation in terms of providing the relevant infrastructure, talent / skills development initiatives, favorable policies (e.g., taxation, rules and regulations) that support the growth of E-business.

To be able to face and sustain the pressure from competitive organizations, there’s a great need of tightly integrated e-business infrastructure. Governments are no exceptions to this. Government agencies are also responsible to quickly respond for queries and applications coming from various levels of customers such as local citizens to business organizations and satisfy them. Businesses need to go through various government rules and regulations, time to time. If both of them can bond with each other through one business integration architecture, it will improve the customer service, operation quality by a large extent. It can also help bring technology in government and government disciplinary rules, regulations in the businesses which will achieve overall superiority in business and government standards.

IT Infrastructure Requirements of E-business Models

Information technology infrastructure is the foundation to start any e-business. An e-business initiative needs to connect various suppliers, customers and other business partners. Investing in IT infrastructure is as critical as it was in place, plant, machineries and equipment’s in earlier traditional businesses. The new market leader will be companies those who can successfully move from traditional enterprise model to the virtual enterprise model where business partners are integrated to get e-business advantage. An initiate to integrate various business partners, information technology infrastructure investment etc. are the major factors which affect the successful transition to e-business.

Business integration brings all business partners together and remove the barriers in the supply chain, barriers to customer relationship, barriers to stakeholders and barriers in partners intercommunication. Examples of these kinds of business integration can be seen in the organizations such as Cisco, Ford etc. It makes the competitors very difficult to tumble and at the same time, make the integrated partners together far stronger than individual organizations finding / leading its place in the digital economy.

The perfect example of business integration is Cisco systems . The website of Cisco is completely integrated with its other business systems, such as Oracle ERP system and channel partners. “Cisco is completely integrated with our back-end systems, so if you press the submit [order] button on the web, within 15 minutes it drops into our order management system and you’ll be able to view that on the web. Then, usually within a few hours after that, it is literally sitting on the manufacturing floor. That happens without a human being ever having touch the order.”

Another major success factor in achieving successful e-business and competing in this internet world is speed. Things are becoming faster and faster and at the same time the expectation are increasing with higher rate. Faster marketing strategies, faster product delivery, customers expect faster response to their query, organization dying to respond faster to the changing markets and use faster new technology innovations! Companies need to introduce technology faster and faster to keep and maintain competitive edges. Once, amazon.com started a new tradition of giving instant response to customer’s orders by sending confirmation email. When customer used to place an order on Amazon.com, he / she receive instant confirmation within few seconds. Now, every e-business organization does the same. It is no more Amazon.com selling point, rather it is necessary for any organization doing business on the web.

To deliver business integration and speed requires an approach based on technology and IT infrastructure. The technology and infrastructure should enable an organization to quickly change to innovations. An organization’s infrastructure in Information Technology to establish an e-business can be defined as the total investment in computing as well as in communication technologies. Thus it may include various hardware, software devices to collect data, devices to represent that data, e-data, communication channel and the people who provide these and other IT services.

This IT infrastructure in turn can be linked to other external organizations’ infrastructures such as bank payment, credit card payment systems, public infrastructures such as internet, telecommunication network etc. Thus, combination of company’s internal and external infrastructure makes a complete infrastructure model of that company.

To maintain business relationship with the partners of the e-business and to change continuously in this internet time, organizations need a flexible and adaptable set of infrastructure services. These infrastructure services help to manage company identity, security and surrounding policies which define business relationships.

This service view of infrastructure is very powerful. It allows for better planning of e-business as well as integrating supply chain or value chain. The infrastructure services generally include large scale computing stations such as servers or mainframe computers. The management of these computing stations is also part of infrastructure services. In addition to this, various telecommunication services, management of shared customer databases, R & D investments to identify emerging useful technologies for businesses, company intranet etc. are also part of infrastructure services.

These services required by a firm need not be changed time to time. Once they are created for an e-business, those will be relatively stable over time. In contrast to these services, the Information Technology requirement for various business processes changes continuously. It can be on quarterly, monthly or even on daily basis. E.g. A construction company wants to start a new construction business and makes it web enabled. It may need to use Information Technology infrastructure services such as main database server or mainframe computer, customer databases, systems which will help provide security and local intranet and global internet. If these services are already in place, it reduces the time and cost to build e-business model for the construction company.

These common, shared infrastructure services help business processes to be consistently applied across the infrastructure. It helps deploy various applications across the virtual network which allows applications to share common databases and processes such as information about employees, customers, partners, files and print and messaging services etc. Apart from just business processes, these common, shared services help apply security and policy management strategies within and outside their organization, but within their e-business value chain partners.

In summary, World Wide Web is the foundation of Information Technology infrastructure needed to integrate one business to other business partners. This helps establish cross organizational processes such as customer relationship management, value chain management, knowledge management etc. It helps organizations to extend to unify across the business boundaries. The basic differentiation between Businesses to Business, Business to Consumers may disappear soon. Many feasible e-business models will serve a combination of various businesses, customers etc.

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E-Commerce C2C, C2B, B2C and B2B business models differences

-->The development of Information and Communication Technologies (ICT) and the growth of the Internet in recent years has changed the life and economy of society, and today, e-commerce business models are moving the world.

e business model based on the relationship of transaction parties

The major changes in sales and marketing models are a response to new needs and consumption habits, which year after year have been adapting to faster and easier for consumers.

According to Statista , by 2020, almost 90% of the world’s population will have made purchases on the Internet , reflecting the growing importance of technology for business, driving a significant change in the organization of companies and promoting their participation in the digital era.

The development of technologies such as process automation, cloud computing and the Internet of Things (IoT) brings significant benefits to companies such as cost reduction, optimization of operations and improved customer experience.

In this way, technological advancement drives greater operational efficiency in companies and enables experimentation with new eCommerce business models , here we will explore each of these.

Learn how to maximize eCommerce success via operations monitoring and support .

Table of Contents

What are e-commerce business models?

E-commerce business models explain the relationship between companies and their direct customers for the purchase and sale of products remotely over the Internet:

  • Mobile applications : Apps specifically designed for mobile devices to facilitate shopping. Examples include the Amazon shopping app, the eBay app, and brand-specific apps like the Nike or Adidas apps.
  • Online stores : Websites set up by businesses to sell products or services. Examples include BestBuy.com, Zara.com, and countless others.
  • Social networks : Platforms like Facebook, Instagram, and Pinterest where businesses can set up shops or run ads to direct users to their online stores.
  • Email Marketing : Businesses send promotional emails to subscribers or potential customers, often with links to purchase products or special offers.
  • Chatbots and Virtual Assistants : Automated systems or AI-driven helpers on websites and apps that assist users in shopping, answering queries, or directing them to purchase pages.

As eCommerce business models leverage the advantages of the Internet to boost sales beyond the physical limitations of traditional commerce, they also face the challenges associated with security and quality assurance.

Thus, the two major drivers of eCommerce businesses are trust and customer loyalty.

C2C Model: Consumer to Consumer

The C2C e-commerce model allows consumers to conduct buying and selling transactions directly with each other, without business intermediation, through digital platforms.

It has established itself as one of the most popular eCommerce business model s because it is simple and low-cost, and it allows for the sale of used products such as clothing, electronics, and furniture. This channel is also used for promoting services, exchanges, and product auctions.

In this business model, logistics and customer service are generally managed by the seller independently, which has driven the rise of some C2C platforms such as:

  • eBay : One of the most well-known online auction and shopping websites where individuals can buy and sell a variety of goods and services worldwide.
  • Craigslist : A classified advertisements website with sections dedicated to jobs, housing, for sale, items wanted, services, and more.
  • Etsy : A platform focused on handmade or vintage items and craft supplies. It’s a favorite among artisans and crafters.
  • Facebook Marketplace : A feature on Facebook that allows users to list items for sale, and potential buyers can browse these listings and contact sellers.
  • Poshmark : A social commerce platform where users can buy and sell new or used clothing, shoes, and accessories.
  • OfferUp : A mobile-first platform that allows users to buy and sell items locally.
  • Vinted : A platform dedicated to second-hand fashion, allowing users to sell, buy, or swap clothing items.
  • Depop : A social shopping app where individuals can buy and sell unique fashion items, often vintage or second-hand.

These platforms have made it easier for individuals to connect with potential buyers, facilitating peer-to-peer transactions and promoting a more circular economy.

C2C Advantages and disadvantages

eCommerce business models are most commonly used by retailers, entrepreneurs or for those who have limited merchandise and do not manage a brand.

Here are some advantages of C2C business:

  • Ability to sell products that are no longer needed or used.
  • Allows to generate extra income.
  • Lower prices.
  • Possibility of getting discontinued, old or unique products.
  • Can be started with little capital.
  • Direct communication and transactions.

Some disadvantages of C2C businesses are:

  • Credibility, since the customer may or may not have a guarantee or support during the transaction.
  • Increased competition.
  • It is a business model susceptible to scams.
  • Difficulty in resolving disputes.

Some valuable tools for e-commerce, learn how to boost your business with CommerceTools and ChatGPT .

C2B Model: Consumer to Business

Unlike the traditional B2C model, the C2B business model allows consumers to offer their products and services directly to companies . In this scheme, it is the consumers themselves who dictate the commercial conditions such as price, terms and form of payment.

A common modality is where professionals such as designers, illustrators, programmers or even influencers use C2B platforms to offer their services independently to support specific needs that companies may have.

Although it is not limiting, it is common for this business model to work through platforms that function as intermediaries. Some C2B platforms are:

  • Upwork : One of the most popular platforms where freelancers from all over the world, including designers, programmers, and writers, offer their services to companies and entrepreneurs.
  • Fiverr : Similar to Upwork, Fiverr allows professionals to offer their services in packages or “gigs”. It’s especially popular among graphic designers, musicians, and voice-over artists.
  • 99designs : Specifically for designers, where companies post their design needs and designers submit their proposals. In the end, the company chooses the design they like the most and pays the selected designer.
  • Influencity : A platform that connects influencers with brands. Influencers can register, showcase their stats, and be contacted by companies looking to promote their products or services.
  • C2B Solutions : A platform that focuses on connecting consumers who have innovative solutions with companies seeking those solutions.
  • Kickstarter : Although it’s better known as a crowdfunding platform, it allows inventors and creatives to present their projects to a global audience, and companies often back projects they find interesting or useful.

These platforms have revolutionized the way professionals and consumers interact with businesses. The C2B model has empowered individuals, allowing them to set their own terms and conditions, and has provided companies with a wide range of talents and solutions to their specific needs.

C2B Advantages and disadvantages

The C2B business model has gained popularity as the demand for remote work increases, making it an attractive model for small businesses and new professionals.

Before starting in the C2B business, its advantages and disadvantages should be known.

Advantages of the C2B model:

  • Viable option to generate extra income.
  • Possibility to trade products or services without forming a business.
  • Access to a global network of professionals and companies.
  • Improved value for money.
  • Savings in fixed contracting costs.

Disadvantages of the C2B model:

  • Risk of non-compliance.
  • Dependence on intermediary platforms.
  • No control over the process, deadlines and quality.
  • Greater competitiveness.
  • Problems for the integration and follow-up of tasks.

B2C Model: Business to Consumer

Of the e-commerce business models, B2C, from business to consumer, is the most common and is used by companies, from the smallest to giants like Amazon and Netflix.

Given its characteristics, the B2C business is usually focused on the mass consumer market . Therefore, the priority is to work based on new needs and ensure that the product purchase and delivery process is increasingly fast and effective.

According to Investopedia , there are 5 B2C business models:

  • Intermediaries : Where a company acts as an intermediary between consumers and product or service providers.
  • Community-based B2C : Here, companies use communities to build relationships with consumers who share interests, sharing relevant content, promoting interaction, and obtaining feedback.
  • Subscription : The company charges consumers a fee to access its products or services.
  • Direct : Where companies sell their products or services directly through their website.
  • Advertising-based B2C : This is a type of marketing where ads are used to direct traffic to the landing page. Its goal is to increase brand awareness, generate leads, and drive sales.

B2C Advantages and Disadvantages

For companies looking to reach a large number of consumers, the B2C model may be the right choice. However, factors such as audience, budget, and inventory must be considered.

Here are the advantages of B2C business models:

  • Convenience and speed for consumers.
  • Reach a wide audience.
  • Adaptation of products and marketing to consumer preferences.
  • The B2C model is efficient for achieving business growth.

Among the disadvantages of B2C business models are:

  • It may require significant costs and investment.
  • B2C companies are subject to regulations.
  • Consumer mistrust regarding data security and privacy measures.

Intelligent search and optimization technology can do a lot for your digital business. Here’s the basics on e-commerce search technology, AI, and ChatGPT. How can they benefit your business?

B2B Model: Business to Business

B2B e-commerce business models refer to commercial transactions that are conducted directly from business to business, without intermediaries.

Participants in B2B eCommerce typically include:

  • Wholesalers : Businesses that sell products in bulk to other businesses, which then resell to the end consumer.
  • Manufacturers : Companies that produce goods and sell them to retailers or other businesses.
  • Distributors : Entities that buy products from manufacturers or wholesalers and distribute them to retailers or other businesses.
  • Software and Technology Providers : Companies that offer software solutions, platforms, or tech services to other businesses.
  • Supply Chain Management Companies : Businesses that manage or provide logistics, transportation, and supply chain solutions for other businesses.
  • Bulk Raw Material Suppliers : Entities that provide raw materials, such as metals, chemicals, or agricultural products, to manufacturers or producers.
  • Industry-specific Equipment Providers : Companies that sell machinery or equipment tailored for specific industries, like construction or manufacturing.
  • B2B Marketplaces : Platforms like Alibaba or ThomasNet where businesses can list and sell their products to other businesses.
  • Consultancy and Business Services : Firms that offer expert advice or services in areas like management, finance, or marketing to other businesses.
  • Service Providers : As you mentioned, these are businesses that offer specialized services to other businesses, which can range from IT services to HR solutions.

Companies engaged in B2B e-commerce provide services or goods that other businesses use as inputs for their operations, such as: raw materials, logistics, software, human capital, and consultancy.

Transactions in B2B commerce do not involve consumers or the general public. Moreover, the companies that participate in this trade operate on a large scale, so B2B transactions tend to have higher value and complexity.

B2B Advantages and Disadvantages

According to Shopify , by 2030 the B2B e-commerce market is expected to grow by 20%, creating more opportunities for businesses worldwide. This growth will be driven by several factors, such as the adoption of digital technologies, globalization, and the increasing demand for specific products and services.

B2B e-commerce offers a number of advantages for businesses, including:

  • Long-term business relationships.
  • Greater efficiency by implementing automation in management and business processes.
  • Streamlining the purchasing and shipping process of products.
  • Higher transaction volume.

Disadvantages of B2B e-commerce:

  • Requires initial investment, personnel, and web development.
  • May involve multiple parties for the negotiation process.
  • Companies may need to use advanced technology and integrated systems.
  • Transactions are subject to regulations.

E-commerce Models: Understand the differences between C2C, C2B, B2C, and B2B

Each of the e-commerce business models has its own peculiarities. In the following comparative table, we will describe the main differences of the four most commonly used models today: C2C, C2B, B2C, and B2B.

Source : NULogic

Did you know that ChatGPT is impacting digital commerce? Here are the details.

E-commerce Business Models – Conclusion

E-commerce is transforming the way individuals and businesses exchange products and services. Its evolution is due to the integration of processes into the digital ecosystem through emerging technologies such as blockchain , artificial intelligence, machine learning, and virtual reality.

This evolution has given rise to a new industry with new types of jobs and disruptive ways of marketing. Although its importance is implicit, we list 3 reasons that have led eCommerce to transform the world :

  • It offers businesses a new way to reach consumers.
  • Consumers have greater convenience and flexibility during the purchasing process.
  • E-commerce helps businesses reduce costs and improve efficiency.

Given its growing global adoption, it is essential for companies to adopt technological solutions that put them at the forefront of digital transformation because the future of commerce is increasingly anchored to platforms, applications, and digitized business models.

At NULogic , we are committed to boosting the growth of your eCommerce. We have a multidisciplinary team that will guide you in implementing technological solutions for your business.

Reach out to us at NULogic , and let’s take your eCommerce to the next level together! -->

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E-business Models Based on the Relationship of Transaction Parties

e-commerce has a great deal of advantages over “brick and mortar” stores and mail order catalogs. Consumers can easily search through a large database of products and services. They can see actual prices, build an order over several days and email it as a “wish list” hoping that someone will pay for their selected goods. Customers can compare prices with a click of the mouse and buy the selected product at best prices.

Online vendors, in their turn, also get distinct advantages. The web and its search engines provide a way to be found by customers without expensive advertising campaign. Even small online shops can reach global markets. Web technology also allows to track customer preferences and to deliver individually-tailored marketing.

History of ecommerce is unthinkable without Amazon and Ebay which were among the first Internet companies to allow electronic transactions. Thanks to their founders we now have a handsome ecommerce sector and enjoy the buying and selling advantages of the Internet. Currently there are 5 largest and most famous worldwide Internet retailers: Amazon, Dell, Staples, Office Depot and Hewlett Packard. According to statistics, the most popular categories of products sold in the World Wide Web are music, books, computers, office supplies and other consumer electronics.

Amazon.com, Inc. is one of the most famous ecommerce companies and is located in Seattle, Washington (USA). It was founded in 1994 by Jeff Bezos and was one of the first American ecommerce companies to sell products over the Internet. After the dot-com collapse Amazon lost its position as a successful business model, however, in 2003 the company made its first annual profit which was the first step to the further development.

At the outset Amazon.com was considered as an online bookstore, but in time it extended a variety of goods by adding electronics, software, DVDs, video games, music CDs, MP3s, apparel, footwear, health products, etc. The original name of the company was Cadabra.com, but shortly after it become popular in the Internet Bezos decided to rename his business “Amazon” after the world’s most voluminous river. In 1999 Jeff Bezos was entitled as the Person of the Year by Time Magazine in recognition of the company’s success. Although the company’s main headquarters is located in the USA, WA, Amazon has set up separate websites in other economically developed countries such as the United Kingdom, Canada, France, Germany, Japan, and China. The company supports and operates retail web sites for many famous businesses, including Marks & Spencer, Lacoste, the NBA, Bebe Stores, Target, etc.

Amazon is one of the first ecommerce businesses to establish an affiliate marketing program, and nowadays the company gets about 40% of its sales from affiliates and third party sellers who list and sell goods on the web site. In 2008 Amazon penetrated into the cinema and is currently sponsoring the film “The Stolen Child” with 20th Century Fox.

Evolution of E-Commerce

E-Commerce was introduced 40 years ago and, to this day, continues to grow with new technologies, innovations, and thousands of businesses entering the on-line market each year. The convenience, safety, and user experience of E-Commerce has improved exponentially since its inception in the 1970’s.

Paving the way for electric commerce was the development of the Electronic Data Interchange(EDI). EDI replaced traditional mailing and faxing of documents with a digital transfer of data from one computer to another.

It was apparent from the beginning that B2B online shopping would be commercially lucrative but B2C would not be successful until the later widespread use of PC’s and the World Wide Web, also known as, the Internet. In 1982, France launched the precursor to the Internet called, Minitel.

90’s to Present

In 1990 Tim Berners Lee, along with his friend Robert Cailliau, published a proposal to build a “Hypertext project” called, “WorldWideWeb.

 Netscape arrived. Providing users a simple browser to surf the Internet and a safe online transaction technology called Secure Sockets Layer.

Since 1995, many innovative applications, ranging from direct online sales to e-learning experiences had been developed. Almost every organization in the world has a Web site. Two of the biggest names in e-commerce are launched:Amazon.com and eBay.com.

DSL, or Digital Subscriber Line, provides fast, always-on Internet service to subscribers across California. This prompts people to spend more time, and money, online.

  • In 1999, the emphasis of e-commerce shifted from B2C to B2B.
  • In 2001, from B2B to B2E, e-government, e-learning, and m-commerce.
  • In 2005, social networks started to rise and so did E-Commerce and wireless applications.

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The case for a modern transaction banking platform

Principal, Corporate, Commercial and SME Banking Consulting, Ernst & Young LLP

Transaction banking industry personnel turned consultant. Proud father of two. Avid traveler. Lover of Acadia and Alaska.

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The evolution of corporate treasury management needs presents an opportunity to offer more comprehensive and sophisticated services..

Co-authored by Ani Majumder, Head of Strategic Liquidity Solutions, Transaction Banking, Goldman Sachs

  • The COVID-19 pandemic accelerated the transition to global, digital-centric business models.
  • Treasurers now have greater focus on liquidity optimization, cash deployment strategies, efficiency gains and real-time insights to drive business decisions.
  • Transaction banking providers are considering the design and principles around their transaction banking platforms to meet the needs of end users.

T he global COVID-19 pandemic drove two major trends in the corporate treasury space. First, corporates accelerated the transition to a digital-centric business model by using technology and agile methodologies to optimize workflows and operational processes. Second, corporates accelerated the transition to a globally connected treasury by consolidating and centralizing treasury functions across regions to a single office under the global treasurer. Given this context, EY research shows that post-COVID-19, large corporates to mid-market banking clients expect intuitive digital channels to be their primary method for interacting with their banking partners. The research also demonstrates how corporate clients are looking for banks to provide new capabilities and services, sometimes enabled through partnerships and ecosystems, that address their evolving needs.

Corporate treasury landscape and treasurer needs are quickly evolving

The current macroeconomic environment has heightened the focus on working capital metrics as key indicators of organizational health, pushing corporates to progressively focus on liquidity optimization and cash deployment strategies. Treasurers are also now influencing critical organizational and business development decisions and have become highly focused on efficiency gains, cost reduction, supporting revenue streams and seeking access to real-time insights to drive business decisions. This changing treasury landscape, coupled with the transition to digital, has meant that corporates are increasingly looking at scalable and flexible treasury setups that enable real-time visibility, efficient funds control, cash positioning functionalities and business support through constant change.

Leading with a modern, best-in-class transaction banking platform

The evolution of the needs of corporates’ treasury management presents an opportunity for banks to differentiate themselves by offering new, more comprehensive and sophisticated services. Enabling these new offerings requires a modern platform that can deliver a consistent client experience, while being flexible and capable of delivering tailored solutions. Key characteristics of such a platform include:

  • Global integration that establishes the ability to provide clients with a unified global experience through integrated tools and capabilities and helps address unique problems while enabling scale to meet clients’ business objectives
  • Expedited and smooth onboarding that is accessible on different systems and is interoperable, has the ability to produce data-driven insights and cumulatively enables features to give users the benefit of enhanced decision-making and improved operations
  • A modern architecture that allows clients to optimize working capital and funding, integrate payments seamlessly into their respective value chains, benefit from tailored reporting and implement decisions based on data-driven insights more easily

How EY can help

Corporate, commercial and sme banking services.

Rapid technology advances are reshaping the entire banking ecosystem, and Corporate, Commercial and SME (CCSB) banking sectors are not immune. EY is helping banks shift their focus back to growth, placing an increased emphasis on client experience, new technology and operational efficiency.

The evolution of the needs of corporates’ treasury management presents an opportunity for banks to differentiate themselves by offering new, more comprehensive and sophisticated services.

Industry approach: a client-centric global transaction banking model

Goldman Sachs’ recent entry in the global transaction banking space has enabled the company to carefully consider the design, deployment and principles around the platform from the very early stages of development. This provided the opportunity to deploy an agile, robust transaction banking platform that can readily adapt to changing market demands and serve as a cost-effective solution for the end user. Creating a single user experience for customers and offering consistency and an extremely nimble interface provide insight into the future of treasury.

To address market and client needs, Goldman Sachs built a modern technology stack and a global, cloud-based platform complete with modularized services accessible via multiple channels. The focus was on simplifying internal processes by emphasizing consistency: one place where data gets stored and reported across all channels, one ledger and one instance of the platform using the same connectivity channels across regions.

As a result of a client-centric design that included enhancements based on customer feedback, the platform is highly compatible with client infrastructure as well as third-party partners. This means that it was designed in response to market demand and customer needs. Furthermore, it is not constrained by old, legacy technology, nor is it hampered by the need to layer new functionality onto multiple disparate systems, which is time consuming and costly. Setting up an infrastructure that allows for customization is a differentiator in the market that enables greater flexibility and responsiveness.

Preparing to meet changing market demands

Goldman Sachs has built a modern, robust transaction banking platform and is committed to maintaining its pace of expansion and innovation while listening to and addressing client needs. As treasury continues to witness innovation across all areas, Goldman Sachs’ nimble, responsive approach means it continues to offer a wide variety of innovative services that are easily integrated into a client’s treasury system.

Recent trends illustrate how corporate clients are gravitating toward digitalization, real-time insights, and real-time cash management and cash positioning. At the same time, treasurers seek greater customization and control over treasury solutions. The time is right for banks to examine and assess the case for a modern, cloud-based transaction banking platform that is equipped with capabilities and technologies that position treasurers at the forefront of treasury transformation, now and in the future.

Download the article on The case for a modern transaction banking platform

To meet the needs of corporate treasurers, banks are considering the development of state-of-the-art platforms that support growth, flexibility and innovation. Near-term adaptation will allow providers to remain competitive today while laying a foundation for continued evolution and support of changing needs long into the future.

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E Business

What is E-Business? Definition, Features, History, Models, and Importance

Page Contents

What is E-Business (Electronic Business)?

E-business (electronic business) refers to the carrying out business activities online with the help of basic tools internet, intranet, and extranet. E-business also called online business which includes activities such as buying, selling, business deals, procurements, monetary transactions over the internet, customer relationship management, collaboration with suppliers, and other stakeholders.

In simple words, electronic business means the transactions of business activities that take place online with the help of the internet. It is the modern way of doing business, handling customers, fulfilling their expectations, and uplifting companies’ profits.

Electronic business has changed the way the traditional businesses used to be where physical presence is vital for buyers’ and sellers’ interactions and for the delivery of goods and services. But, in e-business physical presence is not required. Buying and selling , order processing, and buyers and sellers interactions are done electronically using telecommunication networks.

An E-business system uses a number of information technology-based business practices to enhance the relationship between business and customers. It includes changes in marketing communication , distribution systems, and business models.

What is E-Commerce (Electronic Commerce)?

The terms e-commerce and e-business are often used interchangeably but they differ. E-commerce means buying and selling goods and services online with the help of the internet and making monetary transactions at the same time. E-commerce remains at this.

But, e-business goes beyond just buying and selling over the internet and making payments as mentioned above it also includes managing customers, CRM, ERP, managing production control, processing payments, e-recruiting, e-collaboration, and many more.

In fact, electronic commerce is the part of the electronic business – it can be best convinced as electronic commerce is the subset of electronic business whereas e-business is the superset of e-commerce.

Important definitions of electronic business:

  • Philip Kotler – Electronic business is the general term for buying and selling process that is supported by electronic means.
  • International Fiscal Association – E-business means commercial transactions in which an order is placed electronically and goods and services are delivered in tangible or electronic form.
  • European Union Website – E-business is a general concept covering any form of business transactions or information exchange that is made by using information and communication technology.

Key points to remember about e-business:

  • Electronic business is the conducting of business on the Internet, not only buying and selling but also servicing customers and collaborating with business.
  • The processes and tools that allow an organization to use Internet-based technologies and infrastructure, both internally and externally, to conduct day-to-day business process operations.
  • Stands for electronic business and refers to any kind of sales, services, purchasing, or commerce on the Internet.
  • A new-tech jargon word is used more for marketing than for technical description. Most commonly it broadly refers to conducting business over the internet (email and web) by communicating and perhaps transacting (buying and selling) with customers, suppliers, and business partners.

Characteristics of E-Business?

Thanks to the electronic business we do not have to go to visit shops and stores physically. The buying and selling, payments, delivering process, contracting, dealing, etc. are possible without a physical presence.

Some of the salient features/characteristics of the electronic business are mentioned below:

24×7 Service

It is electronic business/commerce that helped to achieve to give 24×7 service availability. It has automated the way business enterprises give services to customers. As such customers can use services at any time from anywhere.

Non-Cash Payments

In traditional commerce, the transactions – buying and selling of products were done in cash – in fact, this was the only way to do it. But today to do such transactions there is no need of carrying cash electronic business has enabled the use of credit cards, debit cards, smart cards, electronic fund transfers via the bank’s website, and other modes of electronic payment.

Improved Advertising/Marketing

E-commerce makes advertising and marketing activities of enterprises global reach. Better marketing management of goods and services is achieved. Online businesses can provide value to their clients and appeal to their requirements through individualized online experiences by using written articles, and visual, and video content.

Improved Sales

Using e-commerce, orders for the products can be generated anytime, anywhere without any human intervention. It gives a big boost to existing sales volumes.

E-commerce provides various ways to provide pre-sales and post-sales assistance to provide better services to customers. After buying or before buying customers can easily interact with the vendors about the products they want to buy or have bought from companies’ websites.

Inventory Management

E-commerce automates inventory management. Reports get generated instantly when required. Product inventory management becomes very efficient and easy to maintain.

Communication Improvement

E-commerce provides ways for faster, more efficient, and reliable communication with customers and partners. Since physical presence is not required as in traditional commerce customers and other stakeholders are welcome to make contact with the enterprise, and vendors from anywhere.

History of eBusiness/eCommerce

The development of eCommerce took place in 1969 when the first eCommerce company CompuServe was established. A brief development period can be presented below:

  • 1960’s: CompuServe Founded/EDI was Discovered
  • 1972: Computers Facilitate the First Online Sale
  • 1976: Online Transaction Processing Introduced
  • 1979: Electronic Shopping Invented
  • 1983: Electronic Commerce Acknowledged
  • 1984: CompuServe Opens the Electronic Mall
  • 1989: World Wide Web Launches
  • 1994: The First Secure Online Transaction is Made
  • 1995: Amazon, eBay, and the Online Marketplace Boom
  • 1996: Electronic Business (e-business) Was Coined
  • 1998: PayPal Launches
  • 1999: Global eCommerce reaches $150 Billion
  • 2000: The Dotcom Burst and Online Advertising
  • 2005: eCommerce Made a Comeback
  • 2006: Online Shopping Platforms Increase
  • 2012: Food Shopping Goes Virtual
  • 2017: E-commerce Remains Unstoppable
  • 2020: The COVID-19 Boost

Since the Covid-19 pandemic has arrived, the trend of e-business/eCommerce growing tremendously.

Models of E-Business

The e-business or e-commerce model, like any business model, entails how an enterprise functions, how it provides a product or services, how it generates revenue, and how it will create and adapt to new markets and technologies.

The main models/types of e-business are mentioned below:

Business-to-Business (B2B)

The B2B business model involves a website selling its items to an intermediary buyer, who then sells the product to the ultimate client. A wholesaler, for example, makes an order on a company’s website and, after receiving the shipment, sells the finished product to the ultimate client who visits one of the company’s retail locations.

Business-to-Consumer (B2C)

A website that follows the B2C business model sells its items to customers directly. Customers can look at the products that are shown on the website. The customer can select a product and place an order for it. The website will then send an email message to the business organization, which will then ship the merchandise to the customer.

Consumer-to-Consumer (C2C)

By putting their information on a website that follows the C2C business model, consumers can sell their assets such as residential property, vehicles, motorcycles, and so on, or rent a room. The consumer may or may not be charged for the website’s services. By viewing the post/advertisement on the internet, another consumer may decide to purchase the initial customer’s offering.

Consumer-to-Business (C2B)

In this e-commerce concept, a customer visits a website that lists numerous business groups that provide a specific service. The customer enters an estimate of how much he or she wants to pay for a specific service.

For example, websites can be used to compare interest rates on personal loans and auto loans offered by multiple institutions. A company contacts a customer and offers its services after meeting the customer’s needs within the budget constraints.

Business-to-Government (B2G)

The B2G model is a subset of the B2B model. Governments utilize such websites to trade and exchange information with a variety of corporate entities. These websites have been approved by the government and provide a means for businesses to submit government application forms.

Government-to-Business (G2B)

Governments use G2B model websites to approach business organizations. Such websites support auctions, tenders, and application submission functionalities.

Government-to-Citizen (G2C)

Governments use G2C model websites to approach citizens in general. Such websites support auctions of vehicles, machinery, or any other material. Such website also provides services like registration for birth, marriage, or death certificates. The main objective of G2C websites is to reduce the average time for fulfilling citizens’ requests for various government services.

Advantages of E-Business

The advantages/importance of e-business/commerce can be better studied by categorizing into customers, organizations, and society.

Advantages to Organization:

  • E-commerce helps organizations to expand their market to national and international markets with minimum capital investment.
  • E-commerce helps organizations to reduce the cost to create processes, distribute, retrieve and manage paper-based information by digitizing the information.
  • E-commerce improves the brand image of the company.
  • E-commerce helps organizations to provide better customer services.
  • E-commerce helps to simplify the business processes and makes them faster and more efficient.
  • E-commerce reduces the paperwork.
  • E-commerce increases the productivity of organizations.

Advantages of Customers:

  • It provides 24×7 support.
  • The E-commerce application provides users with more options and quicker delivery of products.
  • The E-commerce application provides users with more options to compare and select the cheaper and better options.
  • A customer can put review comments about a product and can see what others are buying, or see the review comments of other customers before making a final purchase.
  • E-commerce provides options for virtual auctions.
  • It provides readily available information. A customer can see the relevant detailed information within seconds, rather than waiting for days or weeks.
  • E-Commerce increases the competition among organizations and as a result, organizations provide substantial discounts to customers.

Advantages to Society:

  • Customers need not travel to shop for a product, thus less traffic on the road and low air pollution.
  • E-commerce helps in reducing the cost of products, so less affluent people can also afford the products.
  • E-commerce has enabled rural areas to access services and products, which are otherwise not available to them.
  • E-commerce helps the government to deliver public services such as healthcare, education, and social services at a reduced cost and in an improved manner.

Applications of E-Business

Electronic business applications are enhancing the way companies perform over the internet. The major e-business applications are:

  • Online Marketing and Purchasing – Data of customers are collected consisting of needs, wants, tastes, preferences, etc., and marketing campaigns are applied that best-fit customers’ actual needs hence customers get a sweetened purchase experience.
  • Finance – Banks and financial institutions are using e-commerce to a great extent to provide their financial services as such customers can easily check balances and account activities.
  • Online Booking – Booking hotels, air tickets, film tickets, etc. are common nowadays’s been possible by an internet booking engine.
  • Online Publishing – Electronic publishing includes the digital publication of e-books, digital magazines, and the development of digital libraries and catalogs.
  • Auctions – Customer-to-Customer E-commerce is the direct selling of goods and services among customers. It also includes electronic auctions that involve bidding.

E-Business Vs. E-Commerce

In the actual field of online business – e-business and e-commerce are used interchangeably.

  • E-commerce is buying and selling products online but e-business is more than that.
  • E-commerce is a subset and an essential part of e-business.
  • E-commerce is limited to monetary transactions but e-commerce includes monetary transactions and allied activities.
  • To communicate with their online customers from all over the world, E-Commerce needs the internet. To connect with the parties, E-Business can use the internet, intranet, and extranet.

Conclusion…

E-business hence is the process of conducting business activities over the internet. The development of electronic business has made online shopping possible and enhanced the company’s performance. And, the trend of e-business/eCommerce is tremendous that has never been seen before and further Covid-19 has boosted its growth.

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  • _2nd Sem Syllabus
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  • _4th Sem Syllabus
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  • _Visual Programming
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Unit ii: business model for e-commerce | bca 7th semester e-business (e-commerce) notes pdf.

A business model is defined as the organization of product, service and information flows, and the source of revenues and benefits for suppliers and customers. It is the method of doing business by which a company can sustain itself and generate revenue.

Business Model for E-Commerce - E-Business

In this “Business Model for E-Commerce - E-Business” you will learn about following topics:

  • Business Model
  • Type of E-Commerce/E-Business Model
  • E-Business Model Based On the Relationship of Transaction Parties
  • Business - To - Business (B2B)
  • Business – To – Consumer (B2C)
  • Consumer – To – Consumer (C2C)
  • Consumer – To – Business (C2B)
  • Business – To – Government (B2G)
  • Government - To – Business (G2B)
  • Government - To – Citizen (G2C)
  • Difference between B2B and B2C
  • Advantages of B2B and B2C Business Models
  • E-Business Model Based On the Relationship of Transaction Types
  • Brokerage Model
  • Price Discovery Mechanism
  • Types of Auction
  • Reverse Auction
  • Market Exchange
  • Aggregator Model
  • Info-Mediary Model
  • Community Model
  • Value Chain Model
  • Subscription Model
  • Affiliate Model
  • Manufacturer Model
  • Advertising Model
  • Classification By Revenue Model
  • Classification By Distribution Channel

==== Point to Note ====

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BCA 7th Semester E-Business (E-Commerce) Notes Pdf:

  • Unit I: Introduction To E-Business
  • Unit III: Enabling Technologies Of The World Wide Web
  • Unit IV: E-Procurement
  • Unit V: E-Marketing, E-Advertisement and E-Branding
  • Unit VI: E-Payment Systems
  • Unit VII: E-Security Systems
  • Unit VIII: E-Customer Relation Management, E-Supply Chain, E-Strategy and Knowledge Management
  • Unit IX: Contemporary Issues in E-Business

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RoadMap of e-Commerce in India

Here is a brief roadmap of the development of e-commerce in India:

Early beginnings: The first e-commerce website in India, Fabmart, was launched in 1999, offering online grocery shopping. However, it was not until the mid-2000s that e-commerce began to gain traction in India.

The emergence of Flipkart: Flipkart, an online bookstore launched in 2007, quickly expanded to become one of India’s largest e-commerce companies. It paved the way for other online marketplaces to enter the market.

Growth of mobile commerce: The widespread adoption of smartphones in India has led to a significant increase in mobile commerce. In 2016, mobile commerce accounted for over 50% of all e-commerce transactions in India.

Emergence of Amazon and Alibaba: Global e-commerce giants such as Amazon and Alibaba have entered the Indian market in recent years, increasing competition and driving innovation.

Government initiatives: The Indian government has launched several initiatives to promote e-commerce in the country, including the Digital India campaign and the Startup India program.

Growth of niche e-commerce: In addition to large online marketplaces, niche e-commerce sites have also emerged in India, catering to specific markets such as fashion, beauty, and home goods.

Future developments: E-commerce in India is expected to continue to grow rapidly in the coming years, driven by increasing internet penetration, rising consumer incomes, and the government’s push for digitalization.

E-Business Model based on the Relationship of Transaction Parties

E-business models can be classified based on the relationship between transaction parties. Here are some examples:

Business-to-Business (B2B): In a B2B model, businesses sell products or services to other businesses. This model is typically used for selling goods in large quantities or for specialized products or services that are needed by other businesses.

Business-to-Consumer (B2C): In a B2C model, businesses sell products or services directly to individual consumers. This model is commonly used in retail and e-commerce settings, where businesses sell products or services to a large number of individual customers.

Consumer-to-Consumer (C2C): In a C2C model, consumers sell products or services directly to other consumers. This model is commonly used in online marketplaces such as eBay or Craigslist, where individuals can buy and sell goods or services to one another.

Consumer-to-Business (C2B): In a C2B model, consumers offer products or services to businesses. This model is commonly used in freelance or consulting industries, where individuals offer their services to businesses or corporations.

Business-to-Government (B2G): In a B2G model, businesses sell products or services to government agencies. This model is commonly used for selling specialized goods or services that are needed by government agencies or for government contracts.

Government-to-Business (G2B): In a G2B model, government agencies offer goods or services to businesses. This model is commonly used for procurement processes, where government agencies offer contracts to businesses that can provide the necessary goods or services.

E-Commerce Sales Life Cycle (ESLC) Model

The E-Commerce Sales Life Cycle (ESLC) model is a framework that describes the various stages of a typical e-commerce sales process. Here are the different stages of the ESLC model:

Awareness: This is the first stage of the sales life cycle, where customers become aware of the product or service being offered. This stage typically involves marketing and advertising efforts such as search engine optimization (SEO), social media marketing, and pay-per-click (PPC) advertising.

Interest: In this stage, customers have expressed some level of interest in the product or service being offered. This may involve visiting the website, subscribing to a newsletter, or following the brand on social media.

Consideration: During the consideration stage, customers are actively researching and evaluating the product or service. They may read reviews, compare prices, and seek out additional information about the product or service.

Purchase: This is the stage where customers make the decision to purchase the product or service. This may involve adding the item to a cart, entering payment information, and completing the transaction.

Post-Purchase: The post-purchase stage is crucial for building customer loyalty and generating repeat business. This stage involves providing customer support, offering incentives for future purchases, and soliciting feedback and reviews.

Advocacy: The final stage of the ESLC model involves turning satisfied customers into brand advocates. This may involve encouraging customers to share their positive experiences on social media, offering referral bonuses, and providing opportunities for customers to provide testimonials or case studies.

By understanding the different stages of the e-commerce sales life cycle, businesses can develop strategies to effectively engage with customers and drive sales.

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  1. E-business Model Based on Relationship of Transaction Parties

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  2. E-Business Models and Strategies

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    E-Business Model based on the Relationship of Transaction Parties E-business models can be classified based on the relationship between transaction parties. Here are some examples: Business-to-Business (B2B): In a B2B model, businesses sell products or services to other businesses.