Introduction to eCommerce

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Introduction to e-Commerce

• Lesson Plan 1

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Introduction to e-Commerce

• Objectives
• 1. Define the term "e-commerce business model.
• 2. Learn the key objectives that help create a
  successful e-commerce website.
  
• 3. Review different e-commerce business models
• 4. Why you dont have to be big to achieve
  success online.
  

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Introduction to e-CommerceWhat is a Business
Model?

• A Business Model is how a business attracts
  customers and makes a profit.
  
• Successful businesses
• Create and deliver something (a product or
  service) that has value.
  
• Have a market for its products or services
• Can pay their costs, i.e overhead
• Ultimately make a profit

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Introduction to e-CommerceCommon
Characteristics of Successful Websites

• Successful websites have the following four
  characteristics
  
• They make it easier for users to do something
• They offer users something of value, often times
  for free
  
• They incorporate features benefits that
  generate repeat visits and use
  
• They differentiate themselves from competition

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Introduction to e-CommerceeBay Online Auction
Business Model

• eBay is an electronic marketplace for people who
  want to sell things and people who want to buy.
  
• eBay is considered by many business experts to be
  the most successful e-commerce site ever.
  
• In 2006, eBays net revenues reached 5.97
  billion, a 31 increase over the year before.
  
• eBays profits exceeded 1 billion for the second
  straight year in 2006 (1.13 billion)
  
• How does eBay achieve the four characteristics/obj
  ectives
  
• of successful websites?

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Introduction to e-Commerce eBay Online Auction
Business Model

• What does eBay make easier?
• It makes it easier for people to sell.
• It makes it easier for people looking to purchase
  to find items for sale.
  
• It makes it easier to buy, often times at a lower
  price.
  
• It makes it safer to do business with people you
  haven't met.

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Introduction to e-CommerceeBay Online Auction
Business Model

• What does eBay offer free to users?
• It is free for buyers to submit bids on eBay.
• It is free to monitor the progress of auctions on
  eBay.
  
• It is free to use eBays search engine to find
  items for sale that you have an interest in
  purchasing.

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Introduction to e-CommerceeBay Online Auction
Business Model

• How does eBay generate repeat usage?
• Through the bidding process (bidders are
  compelled to return to see how their bid is
  doing.)
  
• Requiring sellers and bidders to register.
• Website ease of use to buy and sell.
• A secure user environment (makes buyers and
  sellers more receptive to perform a
  transaction.)
  
• A unique variety of products.

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Introduction to e-Commerce eBay Online Auction
Business Model

• How does eBay
• differentiate itself from competition?
• Excitement and competition in the shopping
  process.
  
• Users dont know the cost of a product until the
  winning bid has been posted.
  
• Product variety, ease of use, and security
• First mover advantage.

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Introduction to e-Commerce eBay Online Auction
Business Model

• How does eBay
• Attract first-time visitors to its Web site?
• Clever search engine marketing strategies
• Publicity - Weird, clever, and unique items
  auctioned on eBay have received worldwide media
  coverage
  
• Associates program that provides linking
  incentives
  
• Advertising on TV, radio, the Internet, and
  direct mail

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Introduction to e-CommerceeBay Online Auction
Business Model

• How does eBay make money?
• Charges sellers a fee.
• Charges for specialized services such as the
  rental of electronic storefronts to sellers and
  an on-line bill payment service.
  
• Sells advertising space.

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Introduction to e-CommerceAmazon Online Retail
Business Model

• Amazon is an online retailer of  books, music,
  DVD/video, toys, electronics,  software, and home
  products.
  
• Amazon spent 98 cents for every 1 of revenue it
  generated in 2006 while eBay spent just 81 cents
  for every dollar of its revenue. What helps make
  eBays business model more profitable?
• How does Amazon achieve the four
  characteristics/objectives of successful websites?

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Introduction to e-CommerceAmazon Online Retail
Business Model

• What does Amazon make easier?
• It makes it easier for people to shop with
  features such as one-click shopping.
  
• It makes it easier for people to get information
  about the products they are interested in.
  
• It makes it easier for people to compare the
  features, benefits, and prices of competitive
  products.
  
• It makes it easier to save money.

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Introduction to e-CommerceAmazon Online Retail
Business Model

• What does Amazon offer free?
• Detailed product information.
• Product ratings and reviews.
• Services and features (e.g. free chapters from
  books, samples of songs from CDs, e-cards, review
  restaurant menus, wedding registries, movie show
  times)

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Introduction to e-CommerceAmazon Online Retail
Business Model

• How does Amazon generate repeat usage?
• Purchasers must register.
• Software that tracks users purchasing behavior
  and generates e-mail messages that notify when a
  similar or related item becomes available or goes
  on sale.
• Promotions such as the gold box.

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Introduction to e-CommerceAmazon Online Retail
Business Model

• How does Amazon differentiate itself from
  competition?
  
• Offers its products at the lowest possible
  price.
  
• Has a large variety of products.
• Has an extensive database that tracks purchases

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Introduction to e-CommerceAmazon Online Retail
Business Model

• How does Amazon attract first-time visitors?
• Effective search engine marketing
• An associates program that offers revenue
  generation potential for third party links
  
• Lots of advertising on TV, radio, in mail

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Introduction to e-CommerceNY Times Online
Newspaper Business Model

• The mission of the online version of the NY Times
  is to provide a high-quality, worldwide online
  audience with trusted editorial content from The
  New York Times
• Launched in January 1996
• Most of sites content comes from content already
  being produced for hard-copy edition
  
• Site has 13.3 million registered users

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Introduction to e-CommerceNY Times Online
Newspaper Business Model

• What does the NY Times website make easier?
• It makes it easier for people to access news
  information in each days edition.
  
• It makes it easier for users to get access to
  additional information such as video feeds, slide
  shows, on-line chats with columnists and
  writers.
• It makes it easier to customize news information
  in the online paper to the users specific needs.

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Introduction to e-CommerceNY Times Online
Newspaper Business Model

• What does NY Times offer free to users?
• Users enjoy complete access to each days online
  version for free.
  
• How does NY Times generate repeat usage?
• Free content
• Feature that allows articles to be emailed to
  others
  
• E-newsletters on special interest topics
• Name recognition
• A personalized news service

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Introduction to e-CommerceNY Times Online
Newspaper Business Model

• How does NYTimes.com differentiate itself from
  competition?
  
• Content is updated several times during each day
• Use of features that have enabled the hard-copy
  to differentiate itself, such as op-ed writers,
  Sunday Magazine supplement, and the Crossword
  Puzzle
• Its free!

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Introduction to e-CommerceNY Times Online
Newspaper Business Model

• How does NYTimes.com attract first-time visits?
• RSS Feeds that permit other sites including blogs
  to abstract and link to NYTimes.com articles
  
• By effectively using its hard-copy edition to
  promote its online edition
  

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Introduction to e-CommerceNY Times Online
Newspaper Business Model

• How does NYTimes.com make money if the
  subscription is free?
  
• Advertising
• An ad that runs for about one month currently
  costs approximately 70,000
  
• Sale of Times Select subscriptions - access to
  premium and archived content
  
• Sale of related products/services such as
  software to do the crossword puzzle, and products
  in the site's on-line store.
  

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MySpace.com Social Networking

• Businesses like this model because content is
  created by users of the site
  
• MySpaces mission is to create the coolest online
  place a 13-to-34 year old Internet user could
  possibly be
  
• 35 million visits per month
• User security is an issue with this model
• MySpace was sold in 2006 for over half billion
  dollars

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MySpace.com Social Networking

• What does MySpace offer free to users?
• Users can create personal Web sites, blogs, photo
  galleries
  
• Users can communicate with friends online and
  meet new people who have similar interests
  
• Users can easily post and share images, videos,
  music etc.

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MySpace.com Social Networking

• How does MySpace generate repeat usage?
• Curiosity - When users post something at My
  Space, they check back at site frequently to see
  if friends or strangers have commented or left
  messages to their post.
• Habit - MySpace.com has become a standard form of
  communication among its users in much the same
  way people use instant messaging, e-mail, and
  cells.

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MySpace.com Social Networking

• How does MySpace differentiate itself from
  competition?
  
• Social Networking Sites are very vulnerable to
  competition because the communication technology
  they feature is easily replicated and enhanced
  (MySpace replaced Friendster.com)
• Sheer Size of MySpaces user base (95 million
  registered users) gives it advantage because
  primary purpose of a social networking site is to
  communicate with as many others as possible.

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MySpace.com Social Networking

• How does MySpace attract first-time visitors?
• Viral marketing at its most effective. Since one
  of the key purposes of using MySpace.com is to
  communicate with friends, every user gets more
  people to become users.
• Owner of MySpace.com is World News Corp. one of
  the biggest media companies in the world.
  Companys newspapers, TV networks, radio
  stations, and magazines can be used to promote
  the site at every opportunity.

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MySpace.com Social Networking

• MySpace should be used with caution and maturity
• Dont post anything at MySpace.com that you dont
  want everyone in the world to know about
  yourself.
  
• Employers now search MySpace for profiles of job
  candidates.
  
• There have been instances where MySpace users
  have been identified and victimized using
  information those users have made available at
  the Web site.

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You dont have to be BIG to be successful
online

• CustomInk.com - Started in a garage
• Developed a new and creative way to sell
  imprinted tee shirts that takes full advantage of
  the Internets interactive technologies
  
• This sites users get to design the product they
  are purchasing
  
• This Company has become successful by developing
  an online business model that makes it fun and
  engaging for customers to place orders and spend
  money at their Web site.

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Introduction to e-CommerceMTV.com Niche Portal
Business Model

• Focuses on music fans in their teens and
  twenties.
  
• Features deep, original content including music
  premieres and exclusives, convergent shows like
  TRL and Control Freak, original programming
  
• Is consistently ranked the No. 1 music content
  site in the teen demographic, according to Media
  Metrix
  

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Introduction to e-CommerceMTV.com Niche Portal
Business Model

• What does the MTV.com website make easier?
• It makes it easier to find information about
  music and artists.
  
• It makes it easier to find out when and where an
  artist is performing.
  
• It makes it easier to sample and purchase
  recordings.
  
• It makes it easier to communicate with people
  from around the world who share the same musical
  interests.
  

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Introduction to e-CommerceMTV.com Niche Portal
Business Model

• What does MTV.com offer free to users?
• The ability to personalize features of the site
  based on musical tastes.
  
• Downloads of free music from new and established
  artists.
  
• Product ratings and reviews.
• Chats hosted by top recording artists.

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Introduction to e-CommerceMTV.com Niche Portal
Business Model

• How does MTV.com generate repeat usage?
• Requires visitors to join/register.
• Software that tracks personal preferences and
  purchasing behavior so that marketing can be more
  targeted.
  
• Free samples of new recordings.

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Introduction to e-CommerceMTV.com Niche Portal
Business Model

• How does MTV.com differentiate itself from
  competition?
  
• It focuses on the teenage demographic, which is
  known to spend its money on music-related
  interests.
  
• Exclusive content that is not available anywhere
  else.
  
• Special events and programming that takes
  advantage of its direct ties to one of the
  worlds most favorite television networks.
  
• It covers a wide expanse of musical related and
  cultural interests.
  

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Introduction to e-CommerceAssignment

• List the events happening inside your school that
  would be of interest to different segments of
  your community.
  
• List ways to get people interested in whats
  going on inside your high school.
  
• Write how you could obtain information that will
  be used as content for your website.