Difference Between Ecommerce and Ebusiness

eCommerce Topic 1 Lecture (Finals): eBusiness Options

1. Difference between eCommerce and eBusiness

1. Advantages and Disadvantages of eBusiness

On the part of eBusiness organizations or the sellers:

Advantages:

• Increased sales opportunities
• Decreased transaction cost
• Operates 24 hours per day, 7 days a week from one virtual market space
• Reach narrow market segments that may be widely distributed geographically
• Access to global markets
• Increased speed and accuracy of information exchange
• Bring multiple buyers and sellers

Disadvantages:

• Rapidly changing technology
• Insufficient telecommunications capacity or bandwidth
• Difficulty integrating existing systems with eBusiness software
• Problem maintaining existing security and reliability
• Global market issues: language, political environment, currency conversion
• Conflicting legal environment
• Shortage of skilled technical employees

On the part of eBusiness organizations or the buyers:

Advantages:

• Wider product availability
• Customized and Personalized information and buyer option
• Shop 24 hours a day, 7 days a week
• Easy comparison buying and one-stop shopping for business buyers
• Access to global markets
• Quick delivery of digital products; quicker delivery of information
• Participate in auction; reverse auction, knowledge exchanges

Disadvantages:

• Concern over transaction security and privacy
• Lack of trust in dealing with unfamiliar sellers
• Desire to touch and feel the product before purchase
• Resistance to unfamiliar buying process, paperless transaction and electronic money

1. eBusiness Models

1. eBusiness Strategy – can be summarized as the strategies governing eBusiness through calculated information dissemination.

A state-of-the-art eBusiness strategy would generally include:

• Supply chain management
• Customer service and customer relationship management
• Inventory and service management integration
• Tactical operations alignment

1. Products suitable for eBusiness

• High value
• Capable for shipping
• Downloadable
• Information based
• Service

1. Online eBusiness Models

Storefront Model – This model is essentially an online shop. All of the products are listed on the site in an online catalog. The buyer simply chooses what they want and pays. The product is then shipped to them. The storefront model works best with product-based companies that want to sell directly to consumers at a set price. This model also works well if you have a bricks-and-mortar store, and want to use the same marketing and pricing plan for your bricks-and-mortar store as for your online store. The storefront model can encourage customers to visit your bricks-and-mortar store. Shopping Cart – Is a variant of storefront model used by eCommerce enablers.

Auction Model – In an auction model, sellers offer products in an online auction and buyers bid on what they want to buy. The buyer with the highest bid wins the product. Auction sites make their money by taking a percentage of the selling price. The largest auction site is eBay. This model usually works best for sellers who have an inventory that fluctuates, and when the seller does not need to sell at a set price in order to make a profit. This model is also not as useful for selling services, although there are some sites which auction freelance work services, such as translation and web design. The Company collects a Submission Fee, plus a percentage of the amount as commission. It is based on the amount of exposure you want your item to receive, with a higher fee required if you would like to be among the “featured auctions”