Business Models for On-Line Shopping

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Business Models forOn-Line Shopping

• Jeff RankinSenior Vice President

November 12, 1999
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Parts of a Business Model

• Who is Served by On Line Shopping?
• Why Types of Service Providers are in the Market
  Now?
• What are the Minimum Expectations of the
  Participants?
• What Does it Take to be a Star?
• What Types of Pricing are Being Offered?

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Who is Served by On-Line Shopping?

• Buying Enterprise
• Lower Costs
• Integrated Data
• Control over Purchasing
• Better Value

• End Buyer
• More Choices
• Better Service
• Better Value

• Service Provider
• New Expanded Market
• Broader Customer Relationship
• Strategic Positioning

• Seller
• Fewer Exceptions
• Quick Payment
• Reduced Sales Cost
• More Buyers

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Three Classes of Service Providers

• Integrator Led
• e.g., Systems Developers and Consulting Firm
• New Business Led
• e.g., Internet Startup
• Bank Led
• e.g., Treasury Management Service Provider

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Integrator Led

• One of Many IT System Offerings
• Parents of Your Legacy Systems
• Highly Customizable
• Wide Range of Consulting Services
• Accounting Expertise

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New Business Led

• Single Focus
• Insanely Great Software
• Aggressive Growth
• Nimble Organizational Structure
• Cutting Edge

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Bank Led

• Part of Standard Treasury Management Service
  Suite
• Commercial Banking Liability Structure
• Integrated Purchasing Card and ACH Payment
• Established Seller Relationships
• Very Large Scale Operations

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Meeting Minimum ExpectationsEarning Your
Stripes

• End Buyer
• Rights and Recourse for Shopping
• Attractive Catalog Feature Functions
• Choice of Products and Sellers
• IT Investment Web Browser
• Seller
• Rights and Recourse for Selling
• Low IT Investment
• Respected Business Relationship
• Growing Volume

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Meeting Minimum ExpectationsEarning Your
Stripes

• Buying Enterprise
• Agreed Upon Liability Structure
• Integrated Payments and Reporting
• Reliability and Availability
• Low Startup Cost and Risk
• Service Provider
• Stable Requirements
• Organized Management
• Known Timeframe for Cost Recovery
• Agreed Upon Liability Structure

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For Buyers and SellersWhat Makes a Star?
Beneficiaries
Category
End User
Seller
Buying Enterprise
Extensive Vendor Experience
Customer RelationshipManagement (CRM)
Future Proof
Trust and Privacy
Commercial Banking Liability Structure
Financial Stability
Tiered Pricing
Transaction Based Pricing
Rebate
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Types of Pricing You May See

• Time and Materials
• Fixed Price
• Transaction Based
• Seat Licenses (i.e., Subscriptions)
• Combinations of the Above with or without Startup
  Fees

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For More Information

• Jack Radzikowski
• Emerging Markets Manager
• 202.624.4216
• jack.radzikowski_at_bankofamerica.com
• Lois Smith
• Senior Relationship Manager for States
• 312.828.4750
• lois.smith_at_bankofamerica.com