E-Commerce

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E-Commerce

• 3/8/2001
• ???
• ???

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E-commerce

• Emerging model of new selling and merchandising
  tools in which buyers are able to participate in
  all phases of a purchase decision, while stepping
  through those processes electronically rather
  than in a physical store or by phone

3
Merits

• Lower price bigger margin
• Improved economic efficiency
• Internet-scale market place
• Only fingertip at anytime anywhere

4
Models

• How to classify?
• Type of business
• E-tailer, B2B, e-mail, hub
• Type of products
• Physical goods, services, digital products
• Revenue-generating models
• Sales, subscription, advertisement
• And much more

5
A Classification
e-commerce model
Utility
Brokerage
Advertising
Subscription
Infomediary
Community
Merchant
Affliate
Manufacturer
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Brokerage

• Market makers
• bring buyers and sellers together
• facilitate transactions
• B2B, B2C, C2C
• sub-categories
• market exchange - MetalSite
• buyer aggregator - Accompany
• metamediary - HotDispatch
• auction broker - eBay
• reverse auction - Priceline
• search agent - MySimon

7
Advertising

• Extension of the traditional media broadcasting
  model
• provides content and services
• mixed with advertising in the form of banner ads
• sub-category
• generalized portal Yahoo!
• personalized portal My.Yahoo!
• attention/incentive marketing - CyberGold
• free model - FreeMerchant
• bargain discounter Buy.com

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Infomediary

• Data about consumer and their habits are
  extremely valuable
• that information is carefully analyzed
• used to target marketing campaigns
• offer users some free in exchange
• sub-category
• recommender system - ePinions
• registeration model NYTimes.com

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Merchant

• Classic Wholesalers and retailers
• sales may be based on list prices
• or through auction
• sub-category
• virtual merchant Amazon
• catalog merchant - Levenger

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ETC

• Manufacturer
• Intel, Apple
• Affiliate
• BeFree
• Community
• Guru
• Subscription
• Slate
• Utility
• SoftLock

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Trends
Top E-Tailers of January 2001
February 19, 2001 PC Data Online
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Services

• Customers perspective
• locate and purchase a desired good or service
• only virtual store
• Merchants perspective
• generate higher revenues than the merchant would
  achieve without the system
• All of the same process of off-line additonal
  functions of an e-commerce must be in place

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3-step to complete online selling

• Step One
• Develop a content site (i.e., as opposed to a
  database-driven catalog) and handle transactions
  off-line.
• Advantages
• Simple Web sites can be developed easily and
  quickly at low cost
• Disadvantages
• This limits Internet function to promotion no
  revenue opportunity is involved

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3-step to complete online selling

• Step Two
• Develop an on-line catalog and handle
  transactions off-line.
• Advantages
• No need for sophisticated technology is involved
  the catalog can manage large product assortment.
• Disadvantages
• Catalog building adds expense, without the
  possibility of reducing expense through on-line
  transactions.

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3-step to complete online selling

• Step Three
• Develop an on-line catalog and handle
  transactions on-line.
• Advantages
• This can manage large product assortment and
  complete sales at lower cost.
• Disadvantages
• Catalog building is expensive, and on-line
  transaction management requires sophisticated
  technology.

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IT resources

• Software architecture
• Hardware architecture
• Protocols and network topology
• Payment services
• Performance management and capability-planning
  procedure
• Security procedures and mechanisms

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Software architecure

• Various software servers
• HTTP servers
• Application servers
• Database servers
• Middleware
• Operating systems

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Hardware architecture

• Various H/W
• Computer systems
• I/O sub systems
• Crypto accelerators
• Firewalls
• Routers
• Load balancers

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ETC

• Protocols network topology
• A sites connectivity to an ISP
• Set of protocols used
• TCP/IP, HTTP, SSL, S-HTTP
• Payment services
• Various type of payment
• SET,Digital checks,e-cash
• Peformance management
• eight-second rule
• Security procedures and mechanism
• Mutual authentication
• Protection of the customers information

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E-Commerce Hosting Services

• Provide e-commerce capability for customers
• Customer .vs. Clients
• Management of network and servers
• Hosting infrastructure
• Scalability
• Quality of services

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EHS (continued)

• EHS Task
• Creation of standard environment for storefronts
  add sites
• Secure transaction environment
• Order processing extraction and communication
• Authorization of credit clear payments
• Site activity reports
• Billing system
• Customers task
• Responsible for contents
• Creation and hosting of web sites, catalog info,
  self integration requirements, etc

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EHS task categories

• Site setup and configuration
• planning, system architecture, installation, etc
• Customer enablement and support
• Store setup, catalog maintenance, store
  maintenance, order management, shopper
  management, reporting
• Site administration and operation
• Systems management, site maintenance, billing,
  reporting, and customer service support
• Back-end tasks
• Payment processing, tax calculation, and order
  routing

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EHS (continued)

• Web Servers
• and now
• Transaction Servers

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EHS (continued)

• Customers tend to develop their Web presence in
  stages
• Simple Web presence ? ? ? Revenue generation

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EHS a system perspective

• Single web site no on-line transactions,
  probably with email.
• Single storefront
• Mall
• Multihome
• On-site content transaction server on-site
  non-DB storefront and transaction server
• Off-site content transaction server off-site
  non-DB storefront

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Components of EHS

• Web site construction tool
• Web site hosting and publishing
• Transaction server
• Handle credit- and debit-card transactions
• APIs for receive, approve, deposit, refund, etc
• Authorization requests, recording, settlement of
  transaction info with merchant, credit card
  company, clients
• Security products and services
• SET secure electronic transactions by VISA
  Mastercard
• Payment systems
• Records of transactions for reconciliation and
  reporting, etc

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EHS (continued)

• Commerce Enabler
• Cash register function
• Outsourced solution for security
• Backend payment infrastructure
• Commerce Service Provider
• Provide end-to-end commerce services
• Content creation, hosting, payment processing,
  integration, performance, customization, etc,
  etc.