Categorizing e-Commerce Business Model (Major Business Model (Comission…
Categorizing e-Commerce Business Model
Major Business Model
Fee that is levied/charged on a transaction by third party
Rely on commissions as a basis of business.
E.g. buying land through a broker.
The owner of website
end users subsidized or free content, services or even product that attract end-user visitors.
As a source of revenue for itself.
Value added in sales than production.
Wholesailers & retailers.
Company bought finished goods from manufacturer & sold them to the public or to other firm
Key is distribution efficiency/marketing muscle
Manufacturer tries to reach customers or end user through Internet.
saves cost and serve customers better.
hardware / software suppliers uses this model
Based on revenues gained from production
Fees as a determinant for revenue.
Firms refer a certain website or service based on the commission that they received for any order that’s being made
used by corporate affiliate programs
Known as a affiliate model
Company charges a flat rate.
Paid regardless of usage
Eg Fairflax (a newspaper printing conglomerate)
Fee for Service based
Consumers pay only when they utilises the service .
Firms generate income through more services rendered.
To convince customers to intensively use the service.
Identifies the customer base, but it goes beyond classification of customers
Retailer (e.g. Amazon)
involved in B2C market
Wholesaler (e.g. Cisco)
more on B2B
AirBnB acts as an intermediary, enabling customer to sell to one another C2C
through the INTERACTION between customer
Pricing Model is set to maximize profitability for each unit sold or from the market overall.
to defend an existing market from new entrants,
to increase market share within a market,
to enter a new market.
Fixed (menu) pricing
a strategy in which a price point is established
maintained for an extended period of time.
an alternative pricing strategy to fixed prices.
if agree, transaction proceed.
debate for price of product
buying and selling goods or services by offering and taking bids, and then buying the item to the highest bidder
if the seller advertises too high a price, the product will not sell
a tool used in business-to-business procurement
the sellers compete to obtain business from the buyer and prices will typically decrease as the sellers undercut each other.
mutual benefit in exchanging goods and services rather than cash