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ACTExp2

The document introduces various business models of e-commerce, focusing on how companies generate revenue through different transaction relationships such as B2C, B2B, and C2C. It outlines the advantages of each model, including cost savings, globalization, and customer convenience. Additionally, it describes the operational processes involved in B2C and B2B transactions.

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2 views

ACTExp2

The document introduces various business models of e-commerce, focusing on how companies generate revenue through different transaction relationships such as B2C, B2B, and C2C. It outlines the advantages of each model, including cost savings, globalization, and customer convenience. Additionally, it describes the operational processes involved in B2C and B2B transactions.

Uploaded by

akaria6996
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 5

EXPERIMENT NO.

02

DATE OF PERFORMANCE: GRADE:

DATE OF ASSESSMENT: SIGNATURE OF LECTURER/ TTA:

AIM: Introduction to Various Business Models of E-Commerce


THEORY:
A business model is the methods of doing business by which a company can sustain
itself, that is, generate revenue. The business model spells out how a company makes
money by specifying where it is positioned in the value chain. Some models are quite
simple. A company produces goods or services and sells it to customers. If all goes
well, the revenues from the sales exceed the cost of operation and the company realizes
profit. Other models can be more intricately woven. Radio and television broadcasting
is good example. The broadcaster is part of a complex network of distributors, content
creators, advertisers and listeners or viewers.

E-business Models based on the Relationship of Transaction Parties

Electronic markets are emerging in various fields. Different industries have market
with different characteristics. For example, an information B2C markets differ in
many respects from the automotive B2B market. The former represents companies
that sell digital information goods, such as news, articles, music, books or digital videos.

Figure 2.1

E-commerce can be classified according to the transaction partners such as business-


to- consumer, business-to-business, business-to-government, consumer-to-business, and
consumer-to-consumer

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Figure 2.2

Business-to-Consumer (B2C)

Consumers are increasingly going online to shop for and purchase products, arrange
financing, arrange shipments or take delivery of digital products such as software, and
get service after sale.

Advantages:

1. Inexpensive costs, big opportunities: Once on the internet, opportunities are


immense as companies can market their products to the whole world without much
additional cost.

2. Globalization: Even being a small company, the web can make you appear to be a
big player.

3. Reduced operational cost: Selling through the web means cutting down on paper
costs, customer support costs, advertising costs, and order processing costs.

4. Customer convenience: Searchable content, shopping carts, promotions, and


interactive and user-friendly interfaces facilitate customer convenience.

5. Knowledge management: Through database systems and information management,


you can find out who visited your site, and how to create, better value for customers.

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How Does B2C Works?

Figure 2.3

1. Visiting the virtual mall: The customer ‘visits’ the mall by browsing the online
catalogue.

2. Customer registers: The customer has to register to become part of the sites shopper
registry.

3. Customer buys products: Through a shopping cart system, order details, shipping
charges, taxes, additional charges and price totals are presented in an organized
manner.

4. Merchant processes the order: The merchant then processes the order that is
received from the previous stage and fills up the necessary forms.

5. Credit card is processed: The credit card of the customer is authenticated through a
payment gateway or a bank.

6. Operations management: When the order is passed on to the logistics people, the
traditional business operations will still be used.

7. Shipment and delivery: The product is then shipped to the customer.

8. Customer receives: The product is received by the customer.

9. After-sales service: The firm has to make sure that it maintains a good relationship
with its customers.

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Business-to-Business (B2B)

B2B is that model of e-commerce whereby a company conducts its trading and other
commercial activity through the internet and the customer is another business itself.

Advantages:

1. Direct interaction with customers: The unknown and faceless customer now has a
name, face and a profile.

2. Focussed sales promotion: This information gives authentic data about likes and
dislikes.

3. Building customer loyalty: It has been observed that online customers are more loyal
than others.

4. Scalability: This means that the web is open and offers round the clock access.

5. Savings in distribution costs: A company can make huge savings in distribution,


logistical and after-sales support cost by using e-business model.

Consumer-to-Consumer (C2C)

With the C2C e-business model, consumers sell directly to the other consumers via
online classifieds ads and auction, or by selling personal services or expertise online.

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