Different Types of E Commerce Business Models

E-COMMERCE BUSINESS MODELS

Category	Description	Examples
E-tailer	- Sells physical products directly to consumers or to individual businesses.	~ Amazon.com ~ RedEnvelope.com
Transaction broker	- Saves users money and time by processing online sales transactions and generating a fee each time a transaction occurs.	~ ETrade.com ~ Expedia.com
Market creator	- Provides a digital environment where  buyers and sellers can meet, search for products, display products, and establish prices for those products. - Can serve consumers or B2B e-commerce, generating revenue from transaction fees.	~ eBay.com ~ Priceline.com ~ ChemConnect.com
Content provider	- Creates revevue by providing digital content such as digital news, music, photos or video over the Web. - The customer may pay to access the content, or revenue may be generated by selling advertising space.	~ WSJ.com ~ GettyImages.com ~ iTunes.com ~ Games.com
Community provider	- Provides an online meeting place where people with similar interests can communicate find useful information.	~ iVillage.com ~ MySpace.com ~ Facebook.com
Portal	- Provides initial point of entry to the Web along with specialized content and other services.	~ Yahoo.com ~ Bing.com ~ Google.com
Service provider	- Provides Web 2.0 applications such as photo sharing, video sharing and user-generated content as services. - Provide other services such as online data storage and backup.	~ Google Apps ~ Photobucket.com ~ Xdrive.com

Blogzilla E-Commerce Commercial

Creating an E-Commerce Web Site

E-commerce has made it possible for entrepreneurs to extend their reach farther than they  could have ever imagined. You’ve just read about all of the different components that go into creating an e-commerce web site, but here’s a quick recap that will help you put  everything into place.

       1. Choose your web design tools

 Determine what tools you’re going to use to design and your site. You can start from scratch and code everything by hand, but this require solid knowledge of HTML, PHP, MySQL, and other programming languages. To shorten thE learning curve, you might want to invest in web design software like Adobe Dreamweaver or Microsoft Expression Web. If you don’t have the budget to spend on software, there are also several free open source options to choose from, including KompoZer and BlueGriffon (formerly Nvu). While they may not offer all of the sophisticated features that paid software does, these open source programs are still powerful and easy to use.

                                                                 

         2.Selecting Your Web Host for E-commerce

 Find a hosting provider that can accommodate all of the tools  you want to use and offers the features you need. , picking the provider that’s right for you can  be an easy decision if you pay attention to a few key issues. The first is price, and while it’s  easy to do a quick price comparison on the web, the cheapest host you can find may not  always be the best. Providers that have lower prices sometimes skimp in other areas, like  customer service or technical support. You should also be on the lookout for providers that  may offer low prices up front, but then run up charges with hidden fees. In addition to price, you should also consider the type of features offered by a hosting  provider. Since PHP and MySQL currently play an integral role in creating dynamic, interactive e-commerce web sites, picking a host that offers compatibility with these languages should be at the top of your list. If you’re interested in having email addresses that  match your domain name—an important factor when considering how you will  communicate with your customers and any employees.

 

3. Pick a payment solution

Weigh your options to see if a payment processor or  gateway is right for you. The payment process is what puts the “commerce” in  “e-commerce.” There are two kinds of payment systems that you should consider for your  site: a payment processor and a payment gateway.  Payment processors, like PayPal Website Payments Standard and Google Checkout, will send  a customer to a checkout page that is hosted by the processing company. After customers  submit their credit card information, they will be sent back to your web site. In contrast,  payment gateways such as Authorize.net integrate directly with your shopping cart and the transaction is essentially invisible to your customer. 

4. Choose or create a shopping cart

Your customers are going to need a way to select  items and buy them, so find a shopping cart solution that meets your needs. At brick-and-mortar stores, shoppers pick items from shelves, put them in a cart or basket,  and usually bring them to a cashier when they’re finished shopping. You’ll need to set up a  similar system—commonly called a shopping cart solution—for your online store. Typically,  shopping cart software allows people to select items from web pages, add them to their  “cart,” and walk them through the purchase process when they are ready to check out. Most  shopping carts will also include taxes and shipping charges to give customers a total for  their order.  When choosing a shopping cart to go with your payment processing solution, make sure it’s  supported by your hosting provider and look to see if the cart offers the payment and  shipping options you need.

5. Obtain credible SSL security

Work with a provider like GeoTrust to get credible SSL protection for your site. A nice site design and seamless integration with a payment system are great, but they won’t  mean a thing if you and your customers aren’t protected from fraud and theft. Security is one  of the biggest concerns that shoppers have when it comes to buying online. In fact, a recent  survey found that 45 percent of consumers are worried about identity theft when they buy  on the web.Even more troubling for e-commerce business owners, security concerns like  these have a serious impact on consumer behaviour. Given these fears, SSL security is critical to your web site. With an SSL certificate, you’ll be able  to prevent cybercriminals from intercepting financial data as it’s transmitted over the  internet. Not only that, but you’ll also be able to show your customers that your business is  legitimate and can be trusted.

Example of E-Commerce

Xtreme Mac

Xtreme Mac has the most original and innovative shopping experience  Xtreme Mac interface to be beautiful and all out fun to play with. Getting your visitors to not only be impressed with your site design but actually enjoy the shopping experience is the holy grail of e-commerce design. The more they enjoy your site, the more time they spend on it. Which, theoretically, makes them more likely to actually buy something (the ultimate goal of any e-commerce site).

Icon Dock

Right off the bat you can see that Icon Dock is a beautiful site full of top notch illustrations.  Some websites make it quite difficult to see and edit the contents of your cart, but Icon Dock gives you a visual “dock” of icons that stays with you as you shop. When you want to add something to it, you simply drag the icon to the dock to drop it in. Then if you want to remove anything from the dock, simply hit the little “x” on the icon.

This is crafted in such an intuitive manner that you really don’t need any instruction. It works exactly like you expect it would. And for those who don’t get it right away, there’s still the old option of clicking an “add to cart” button. This is an important feature. When designing a uniquely interactive interface, always think about whether you should still include the traditional way for those who might not understand your fancy new idea. This allows you to blaze your own path in interactivity while preserving usability.

Nike

Nike has integrated everything on the page in a visually seamless manner. They’ve got well over ten unique sections on a single page, yet it looks completely cohesive. Let’s look at a few of the things they’ve done to accomplish this. The first thing they’ve done to cut clutter is fairly simple. Instead of stacking randomly-sized banners promoting different items on top of each other like Kmart, Nike has one primary banner that rotates between three messages. This surely isn’t groundbreaking, but it’s something too few designers consider when faced with loading a page to the brim with content. Prebuilt libraries like jQuery make this type of rotating content a cinch and can really make an otherwise static page come alive in a subtle, non-annoying way.The next thing Nike has done to cut clutter is to put all the sections below the main banner on a continuous background color to avoid that “dropped in” look you get with the sale item boxes in Kmart’s design. This makes the entire page look as if it were built at the same time by the same designers, as opposed to having an old design that you keep cramming more and more mismatched items into over time. It’s all about synergy folks.

Dyson

The lesson we can learn from Dyson is that you can make shopping for a vacuum feel like shopping for a Mercedes. No matter what you happen to be selling, if you want it to look high end, get your inspiration from websites that sell luxury cars, yachts or anything else that costs more than you make in a year. The black and gray background is really complemented by splashes of white and/or blue that really jump off the page with contrast. What really steals the show is the product photography (no doubt as much Photoshop as actual photo), which really captures the essence of the attractive product design. Also notice the rotating banner as with the Nike example. You’ll see this again and again throughout the examples below for good reason, it’s just a great way to put a ton of content into a small space without any visual clutter.

Ikea

Ikea wins the prize for the most interactive shopping experience. When I get the Ikea catalog in the mail, my wife and I love to sit down together and flip through it together for design ideas and to see what cool new products they’ve come up with. This is enjoyable because the Ikea experience has been carefully structured so that flipping through the catalog is just like walking through their showroom. Instead of being presented with individual items, you see custom photography of an entire room completely made up of Ikea products. They give you helpful breakdowns of what each item costs as well as the cost of buying the entire room as a set. This helps normal people who don’t know much about interior design create beautiful rooms.

Recently, Ikea has transferred this experience to their online store. What you get is an experience that’s a lot like flipping through the catalog, only much more interactive and dynamic. You can click on the icons next to certain products to get a closer look or view hidden features, change views to look around the room, or skip the room view and look at a simple grid of products. Like some of the other examples above, Ikea is shooting for a shopping experience that is not only enjoyable, but could even be considered fun. If you’re building an e-commerce site, think about how you can liven up the experience by adding something a bit more interactive than your average online store.

E-Commerce Regulations

The regulations apply to every business which offers Internet marketing within the UK or European Economic Area (EEA), which means it is nearly every commercial website. Such businesses must comply with the E-Commerce Regulations,  regardless of whom it sells its products or services to (individuals or other businesses). If a business sells goods or services on the Internet, by email or text message, it has to comply with the regulations.

The e-commerce regulations only apply to the laws passed from the 30 July 2002. The regulations do not apply to tax, gambling or lottery and do not affect data protection laws. Direct marketing over a phone or fax are not covered by the regulations.

The regulations aim to ensure transparency in online transactions. The seller needs to provide the consumer with necessary information such as terms and conditions and fine print as well as give them the right to cancel their order within a specified time.

The following minimum information must be provided to the consumer and be easily accessible:

• The name of the service provider: the consumer must be informed who he or she is dealing with and be able to easily find it on the website
• The email address of the service provider so the consumer can contact the business whenever he or she needs to.
• The address of the service provider: if it is a company then a registered office address needs to be given
• The company’s registration number if the service provider is a business 
• VAT number if available
•  Prices must be transparent: state whether they include VAT and delivery costs
• There must be a clear description of goods or services offered
• Payment method and delivery arrangements (within 30 days if not stated otherwise) must be specified 
• Cancellation rights should be provided (usually 7 days after the goods are delivered or contract of service is agreed) and it should be clarified who is responsible for the costs of returning the goods.

E-Commerce Security

 Definition 

• E-commerce security is the protection of e-commerce assets from unauthorized access, use, alteration, or destruction.

Dimensions of e-commerce security 

1.     Integrity: prevention against unauthorized data modification

2.     Nonrepudiation: prevention against any one party from reneging on an agreement after the fact

3.     Authenticity: authentication of data source

4.     Confidentiality: protection against unauthorized data disclosure

5.     Privacy: provision of data control and disclosure

6.     Availability: prevention against data delays or removal.

Threats

  Anyone with the capability, technology, opportunity, and intent to do harm.Potential threats can be foreign or domestic, internal or external, state-sponsored or a single rogue element.Terrorists, insiders, disgruntled employees, and hackers are included in this profile (President's Commission on Critical Infrastructure Protection) 

•  Intellectual property threats -- use existing materials found on the Internet without the owner's permission, e.g., music downloading, domain name (cybersquatting), software pirating .

• Client computer threats

–      Trojan horse

–      Active contents

–      Viruses 

• Communication channel threats

–      Sniffer program

–      Backdoor

–      Spoofing

–      Denial-of-service 

• Server threats

–      Privilege setting

–      Server Side Include (SSI), Common Gateway Interface (CGI)

–      File transfer

Important Features of E-commerce Product Pages

1. Quality of Image

• When you go shopping at an actual store, you may talk to someone about the product in person — although ecommerce sites often have more accurate and in-depth descriptions of a product than someone who works at the store — but the visual process of shopping is the most crucial. For the web, it’s really the same and just as important. Image quality is king when it comes to ecommerce. Invest in quality images of your own products. Don’t use the same images as other retailers.

  2.  Alternate Views

• As important as it is to have quality images on your product pages, it is also important to display the product in as many angles and details as possible. Remember, the sale is in the details. People want to see exactly what they are getting. Having alternate views will likely decrease your return rate as you’re showing customers exactly what they are getting. If you are selling expensive goods, alternate views are a must. Remember that online shoppers are concerned about product authenticity , alternate views can help.

 3.  Zoom Feature

• Related to alternative image views, the “zoom” feature on product images has become increasingly popular. This helps consumers get a better view of the product.

4.   Consumer Review

• Shoppers care what others have to say. If your product pages have consumer reviews, you’re helping shoppers make a final decision. Not all products have positive reviews. In fact, many have both positive and negative reviews, which,makes the shopping experience that much more authentic and real for the shopper. There are many great review platforms to choose from, if your cart doesn’t provide one.

5.   Product Comparisons 

• Product comparisons can improve a shopping experience — and increase sales.Consumers typically shop for similar features. A product comparison feature on product pages can help        them view features side-by-side, instead of flipping through many pages. Many shopping carts are starting to incorporate this feature into their platforms.

6.    Product Demo

• Product demos are increasingly popular. They inform the consumer and can really help decrease return rates. Employees of Office Depot recently displayed that company’s product demonstration feature at an Internet Retailer conference, stating it sharply increased sales. Also, TigerDirect.com uses product demos to show, explain and educate consumers about that specific product.

How E-commerce Works

The diagram above outlines the path the information travels to create an e-commerce transaction. Here is an explanation of each piece.

·         Customer
Hopefully, this one is obvious and needs no explanation!

·         Website
Your visitors are constantly sending and receiving information over the internet from their computer to your web server. An e-commerce transaction would send credit card data to perform a transaction.

·         SSL Certificate
While most data can flow freely, we want to be sure the credit card data is transmitted safely. So it is encrypted as it is sent to keep prying eyes from seeing it. An SSL Certificate is what accomplishes this task.

·         Online Gateway
The gateway is the "middle-man" that allows a website to send data to a merchant (credit card) account. The website sends the credit card data to Authorize.net, who performs a live check on the card and received a charge authorization (or decline). This information is passed back through to the website. We use the major player out there: Authorize.net.

·         Merchant Account
A merchant account allows your business to accept credit cards. We have partnered with First Data, Amercia's leading processor, to offer preferred rates to our customers.

·         Bank Account
The money paid is deposited to your bank account within a few days.

Model Of E-Commerce

Private Office Model

The office model is an extension of the company website which is only visible to the client. The client is provided with a user ID and password. This model is best suited to service businesses with high- value products.  It also works well for collaborative projects or transactions or for services or markets with complex security arrangements.

Shop Model

This is the familiar e-shop. The basic core is a catalogue. Customers search and browse the catalogue choose items, which are added to a virtual basket or trolley. The ‘shopping is moved to the checkout are which is a secure area. Payment can be verified and funds transferred, while the customer is online. It is suitable for shippable and downloadable products and low human intervention means a potential cost saving but also potential risk. You will know the largest online stores and high profile websites that use this model. What is perhaps not obvious is that most successful sites are supported by:

·     Innovative online processes e.g. record of previous transactions, targeted sale on entry, accounts maintenance, ‘1 click’ to system for subsequent orders.

·       High quality offline processes, such as customer service, delivery speed, telesales, and cross-selling programmes.

·        Integration of business processes with the shop front and back ends.

Membership Model

The membership model is about creating communities that are of commercial interest to the business. Superficially the membership model seems to have no obvious business value. Actually it is a very creative marketing strategy where all parties can benefit. Companies can often afford to give away expertise in specialist areas e.g. online newsletter on antique clocks, posting facility for the active knitting community. For the business, self-selecting buyers come to the business. It can be so rewarding to create a community that it is all too easy to loose site of the commercial goals. It is therefore important to plan the commercial activity before designing the membership system.

Hybrid Model 

Most sites are a combination of these models. For example amazon.com is a membership model combined with a shop model; buzzsaw.com is a membership and portal combination.