1 c5 - february 25, 2008 business 54 - introduction to ecommerce spring 2008 c5 - february 25, 2008
DESCRIPTION
3 C5 - February 25, 2008C2 - February 13, 2008 Business & Revenue Models Business Models Business to Consumer. Business to Business. Business to Business to Consumer. Consumer to Business. Communities. Exchanges-Marketplaces. Governmental. Peer to Peer. Media. Revenue Models Banner-Advertising. Subscription. Transactional. ‘Begging’-Donations. Middlemen. Taxation.TRANSCRIPT
1C5 - February 25, 2008
Business 54 - Introduction to eCommerce
Spring 2008
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Class Game Plan
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Re-Cap of Business & Revenues Models.
eMarketplaces.
eTailers.
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Business & Revenue ModelsBusiness Models
Business to Consumer. Business to Business. Business to Business to Consumer. Consumer to Business. Communities. Exchanges-Marketplaces. Governmental. Peer to Peer. Media.
Revenue Models Banner-Advertising. Subscription. Transactional. ‘Begging’-Donations. Middlemen. Taxation.
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Business to Consumer: What we are most familiar with in the Off-Line world.
Think Proctor & Gamble or Yahoo.
The Household Names of the Internet are B2C companies.
Traditional B2C Markets-Industries are divided into: Market Leaders Followers Niche Players
Bad economic model for the seller!!!!
Types of Business Models
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Business to Business: You sell your product to the companies who sell the finished product to end
consumers.
Think Levi Strauss of yesteryear or a supplier to General Motors.
B2B is essentially a small club of sellers and buyers (or an oligopoly).
Very good economic model for both the buyer and the seller!!!!
Types of Business Models
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Peer to Peer: Partnerships, usually on the distribution side.
Think Amway or Napster.
Not a lot of them.
Difficult economic model to maintain over time
Types of Business Models
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Communities: Collection of like-minded people who share attributes or hobbies-interests.
Think your local church group or alumni organizations or AOL.
Size / number of active community members is THE critical success factor.
Types of Business Models
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Exchanges-Marketplaces: Where buyers and sellers meet.
Unlike a community, exchanges may limit membership.
Think NYSE or eBay.
Need both buyers and sellers to be successful.
Usually only one per industry grouping-product.
Types of Business Models
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Coercive-Governmental: You have to use a proscribed channel-means to conduct business with the
government entity.
Think the DMV and auto tags renewal or paying property taxes on line.
Unlike other models, no impact upon current operating model: Funded by tax monies, not net income. Move to automate not to transform-reengineer processes. eGov is the Hot Area of technology right now.
Types of Business Models
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Media: Still evolving, but combines elements of community with entertainment.
Think Warcraft, KRML, Rush Limbaugh and ESPN.
Where the action is!
Types of Business Models
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Traditional and eCommerce Revenue Models
Banner-Advertising Subscription Transactional ‘Begging’-Donations Middlemen Taxation
Overview of Revenue Models
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Banner-Advertising: The original Web-Internet Revenue Model:
Yahoo TV-like All about eyeballs!
Has morphed over time to include Pop Ups, Dancing Bunnies, Spam and Re-Directs-Takeovers.
Measured in CPM (Cost Per Thousand eyeballs) --- $3CPM: Varies by ‘targeted audience’ --- more descriptive demographics = better. Ranges today anywhere from $1.5CPM to $5.00CPM. During the Boom, CPM was often in the $75-$100 range.
Cannot build an eCommerce business today using a Banner Model – At best can supplement other revenue sources
Types of Revenue Models
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Subscription: Just like magazine and newspapers.
Fixed charge every month.
Subscription fees range from $9.99 to $19.99 per month.
Liable to credit card gaming.
Best Revenue Model on the Web today.
Types of Revenue Models
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Transactional: Selling goods and services to consumers or businesses.
These are the eTailers: Amazon Wal-Mart Target Expedia
Low margins Need High Volume = lots of transactions Repeat business and customers is key
Seems to work best for those which offer both Brick-and-Mortar and an On-line presence.
Types of Revenue Models
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‘Begging’-Donations: Think Jerry Lewis Telethon or PBS Fundraising Campaigns.
Usually not sustainable if frequently used.
Lots of effort for very small gifts.
Successful usually for communities. Primary source of ‘revenue’. Used in conjunction with some sort of Transaction Revenue Model - lines
are blurry
Types of Revenue Models
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Middlemen: Revenue Model employed by Marketplaces:
NYSE EBay Homestore.Com
Extract a fee for bringing buyers and sellers together: Not exactly like a commission. Fee is per Transaction.
No risk in the transaction or event.
Types of Revenue Models
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Taxation: The cost of supporting the site is provided via your State/Local and Federal tax
payments.
Sometimes funded via user fees – like paying property taxes on line.
May also be done via grants to non-profits and other government agencies: Universities, Red Cross, etc.
Little impetus for the site to solicit or assess user feedback. – Little push for constant improvement.
Also, NO COMPETITION!!!!!! No threat of click-aways!
Types of Revenue Models
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Some eCommerce Concepts
Portals.
Disintermediation;
Auctions
‘Dutch’ auctions;
Marketplaces.
eTailers.
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eTailers
Why eTailers?
What sells on the internet?
What doesn’t sell on the Internet? And Why?
Can you compete?
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What is an eMarketplace?
Place where buyers and sellers meet.
Matching of buyer and seller needs.
Eases transaction / reduces ‘Friction’.
Infrastructure Cocoon.
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Types of eMarketplaces
Portals.
Malls.
Storefronts.
Intermediaries.
Search Engines.
Let’s go visit some!
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Questions……
(and maybe some) Answers