E-Commerce

eBay is the world's largest online trading community. It is an online auction and shopping website in which people and businesses buy and sell a broad variety goods and services worldwide. San Jose, California is the headquarters for eBay, and overall they probably have something in the neighborhood of 400 employees now. Other than that, eBay might be the first example where a commerce site has actually been built around a society where people exchanging information and also goods, services and merchandise.

What they are offering to their customers is an opportunity to come together in one Internet site so that customer will be able to buy and trade a wide range of items. Millions of collectibles, decor, appliances, computers, furnishings, equipment, vehicles, and other miscellaneous items are listed, bought, and sold daily as long as it is not illegal and does not violate the eBay Prohibited and Restricted Items policy. It also allows customers to pursue their interests and their passions in the areas of their hobbies and their collectibles.

Besides that, eBay has built an online person-to-person trading community on Internet by using the World Wide Web. It means that buyers and sellers are brought together in a manner where sellers are permitted to list their items for sale and buyers are allowed to bid on the items which they are interested on. Further, all eBay users also can browse through listed items in a fully automated way as all items are arranged by topics because each type of auction has its own category. As a result, it is easier for them to find their wanted item.

Moreover, eBay has offers several types of auctions such as auction-style listings, fixed price format and auctions. All these auctions allow sellers to offer one or more items for sale in a manner that convenience the buyer. eBay also provide same useful sites that provides information about popular search terms, trends, most-watched items and most-unusual items in order for users could to on and nominate listings that they found. For example, eBay Pulse. SquareTrade has been provided by eBay that provide mediation services for buyers and sellers to resolve any issue that was arise.

eBay allows people to enjoy the experience of the shopping bazaar as they really enjoy the hunt and looking around for merchandise. They also enjoy the competition of the bidding process because everybody likes to get a bargain, and may in some way, shape, or form, like to haggle a little bit over the price.

Another factor to consider is that eBay gives sellers the ability to market their products to millions of daily visitors makes and it is one of the most efficient ways to sell just about anything. eBay also enables user to find a great deal on all kinds of items - millions to choose from because everything from autographed Elvis records to brand new computers can be found. Therefore, a lot of people like to do transactions with eBay.

Furthermore, eBay allows people back to the times that connect them with some very fond and special early childhood memories such as collecting baseball cards to toy soldiers to Barbie dolls to doll houses, and so forth. eBay also allows people to make that connection and relive a lot of those very vivid and very fond memories that they have from the earlier period of time.

eBay has attempted to listen to their customer and develop and provide new services in addition to the ability to just buy and sell when growing pains occurred. These new services include everything from allowing their customers to list their items by a photograph in the eBay gallery, the feedback forum and establishing categories that deal with higher priced items and collectibles and automobiles. And at the same time, eBay has maintaining the level of growth that is just really phenomenal for any business, let alone an Internet business.

eBay has attempt to understand what particular rules and regulations may apply when it has trading sites in other country such as Canada, the United Kingdom, Germany and etc and also moving into the Asian market. They try to get a lay of the land to understand how a business may or may not operate and what considerations a business may have to factor in.

Besides that, eBay has created a series of co-branded sites through the AOL properties, and having a number of arrangements with smaller sites that go back several years in order to encourage people to come into the eBay site.

1. http://pages.ebay.com/education/tutorial/course1/commercial/3.html
2. http://www.cs.brandeis.edu/~magnus/ief248a/eBay/history.html

An example of an e-commerce failure and its causes

As we known, e-commerce is a short form of electronic commerce which involving in buying and selling of products or services by using electronic systems such as internet and other computer networks. In the business world, many companies prefer to convert their business into e-commerce system because it is one of the best marketing channels for small to medium-sized businesses and the cost of establishing an e-commerce site on the World Wide Web is cheaper. However, there are some successful virtual e-commerce companies such as eBay, Google, or Yahoo in recent years. But, there are also appear a large number of e-commerce companies which is business-to-consumers (B2C) failures, most of them are unable to maintain their profit through e-commerce, the most common well-known is .

In year between 1997 and 2001, in the face of an e-commerce failure by few causes. is failure to make any develop on the innovation site because innovation is very important in the B2B e-commerce, it can be revolutionary or evolutionary those are needed to reduce human involvement in the business processes. Nowadays, internet as a communications medium for most marketers that they are looking for, therefore, implement the internet as a strategy is very important for B2B e-commerce such as facilitate an entirely new business model or a new strategy to advance the relationship without a salesperson.

Besides that, delivery the stock to customer is not on time. As we know, consumers get into the site is one thing, whereas delivering is considered as another thing. Failure to deliver the ordered stock on time to consumers caused to give away hundreds of $US100 vouchers to displeased consumers unnecessarily. Moreover, the compensation plans as they are currently constituted in most businesses work against internet success, because of any salesperson has even the threat of loss of income due to e-commerce, which make e-Toy failure to adjust the compensation plan caused the internet advancement delay.

However, there are some methods for e-commerce company take up certain actions to avoid failures. To become a successful e-business must have multiple channels of communication, not just the Web. Therefore, company should not focus too much on “e-commerce”, because consumers are more rely on personal attention. Otherwise, a successful e-commerce website must be fast, easy to use, convenient and perhaps fun. Create a long-term business relationships are important in the electronic world because it can getting comfortable and the relationship will continue to exist.

What is E-commerce?

Electronic Commerce, commonly known as e-commerce, it is the process of buying, selling or exchanging products or services over electronic systems such as the Internet and other computer networks. Nowadays, the amount of trade conducted electronically has grown extraordinarily with widespread Internet usage. For example, selling and buying airline tickets through the internet.

The history and evolution of E-commerce

Originally, electronic commerce meant the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange (EDI). EDI is a set of standards developed in the 1960’s to exchange business information and do electronic transactions. In the beginning, each company had its own standards for formatting these documents. However, in 1979, the American National Standards Institute (ANSI) came up with something called ASC X12, a universal standard for sharing business documents over electronic networks.

Although the Internet began to advance in popularity among the general public in 1994, it took approximately four years to develop the security protocols (for example, HTTP) and DSL which allowed rapid access and a persistent connection to the Internet.

In 2000, a great number of business companies in the United States and Western Europe represented their services in the World Wide Web. At this time, people began to define the term e-commerce as the process of purchasing of available goods and services over the Internet using secure connections and electronic payment services.

According to all available data, e-commerce sales continued to grow in the next few years. The chart below shows that by the end of 2007, e-commerce sales accounted for 3.4% of total sales.

Undoubtedly, e-commerce will evolve further in the future as it become more and more important to people.

Early adopters of E-commerce

Amazon and eBay are the two companies that transformed e-commerce in the mid-1990s. Amazon went public in 1997 and it has expanded its offerings beyond books. It currently offers music, movies, electronics, toys, home and garden equipment, clothing, jewelry, video games and digital downloads. Furthermore, Amazon runs seven different international Web sites, has distribution and customer service centers in seven countries and employs more than 17,000 people worldwide.

eBay leveled the e-commerce playing field. In 1996, with two full-time employees, eBay sold $7.2 million worth of goods. By 1997, with the help of Beanie Babies frenzy, eBay sold $95 million in goods. In 2007, eBay sold $52.5 billion in auctions, had more than 220 million registered users and 13,000 employees.

Both eBay and Amazon paved the way for today's e-commerce merchant. Nowadays, consumers can buy almost anything online, including shoes, home goods, and others.

Web 2.0

"Web 2.0" refers to what is perceived as a second generation of web development and web design. It is characterized as facilitating communication, information sharing, interoperability, User-centered design and collaboration on the World Wide Web. It has led to the development and evolution of web-based communities, hosted services, and web applications. For instance, social-networking sites, video-sharing sites, wikis, blogs, mashups and folksonomies.

Moreover, it allows users to do more than just retrieve information. They can build on the interactive facilities of "Web 1.0" to provide "Network as platform" computing, allowing users to run software-applications entirely through a browser. Users can own the data on a Web 2.0 site and exercise control over that data. The characteristics of Web 2.0 are rich user experience, user participation, dynamic content, metadata, web standards and scalability. Further characteristics, such as openness, freedom and collective intelligence by way of user participation, can also be viewed as essential attributes of Web 2.0.

Related links:

http://www.ecommerce-land.com/history_ecommerce.html

http://en.wikipedia.org/wiki/Electronic_commerce

http://communication.howstuffworks.com/history-e-commerce1.htm

http://en.wikipedia.org/wiki/Web_2.0#cite_note-8

Google’s Revenue Model

The main source of Google yearly income is derived from advertising revenue model. For the 2006 fiscal year, the company reported US$10.492 billion in total advertising revenues and only US$112 million in licensing and other revenues. The Google advertising programs include Google AdWords and Google AdSense.

Google AdWords offers pay-per-click (PPC) advertising, and site-targeted advertising for both text and banner ads. The program includes local, national, and international distribution. It is designed to allow the advertisers to present advertisement to people are looking for information related to what the advertiser has to offer. Google AdWords is Google 's flagship advertising product and main source of revenue ($21 billion in 2008).

Google AdSense is an advertisement application. Website owners can enroll in this program to enable text, image, and more recently, video advertisements on their websites. These advertisements are administered by Google. It generates revenue on either a per-click or per-impression basis.

Amazon’s Revenue Model

Besides Ebay, the best well-known online shopping on the Web is Amazon. It is America's largest online retailer. Amazon allows users to submit reviews to the web page of each product. Moreover, users are required to rate the product on a rating scale from one to five stars and comment on reviews.

Amazon Marketplace is Amazon.com's fixed-price online marketplace that allows sellers to offer their goods alongside Amazon's offerings. Buyers can buy new and used items sold directly by a third party through Amazon.com using Amazon Marketplace. This sales strategy and program has been very profitable for Amazon.com. Amazon charges a commission rate based on the sale price, a transaction fee, and a variable closing fee. In other words, Amazon’s revenue is derived from sales revenue model and transaction fee revenue model.

Moreover, aStore is an Amazon.com affiliate product which website owners can use to create an online store on their site. The aStore interface is intended to be accessible to those without programming skills, using configuration pages to customise the content and design. The store does not allow website owners to sell their own products directly. Website owners pick products from Amazon's store and earn referral fees on the products purchased by their readers. The fee structure is currently (August 2007) the same as for other affiliate links and ranges from 4% to 10% of the product price. Thus, we can say that Amazon’s revenue is generated about 40% of its sales from Affiliate revenue model.

Ebay’s Revenue Model

Ebay is an online auction and shopping website in which people and businesses buy and sell a broad variety goods and services worldwide. Millions of collectibles, decor, appliances, computers, furnishings, equipment, vehicles, and other miscellaneous items are listed, bought, and sold daily in the Ebay website.

Ebay generates revenue from insertion fees, final value fees and several optional adornment fees, all based on various factors and scales. Insertion fees are fees to list a product on Ebay. Final value fees are fees when the product sells.

Besides that, Ebay generates revenue by transaction fees from owning the PayPal payment system which has fees of its own.

Furthermore, some of Ebay's revenue is also generated from advertising fee as well as sales. Ebay allows website owners to advertise their products.