After reading professor Miyazaki's blog post for this week, I did some research on e-Commerce, its business models and how to increase profitability for websites.
Well.. first I'm going to explain what is e-Commerce because I know that not only Marketing students are reading this... so.. Basically e-Commerce is the buying and selling of goods and services over the Internet. It used to be called e-business, although some people still call it that way.
Internet users don't usually think that there is a cost related to every Web Page they access. Even if it's a free service that is being provided, someone is paying for that. There are costs with the computers, softwares and also the maintenance of the Web Page (that takes a lot of time and expertise).
The growth of e-Commerce is just a reflection of the changes that are happening with communications and society’s lifestyle. Most people do everything online now: shopping, research, networking, even entertainment, just to name a few. With the fast-pass of today’s lifestyle, a lot of people don’t have the time to spend shopping at brick-and-mortar stores so; they do it all through the Internet.
Who doesn’t have an email account these days? And the majority of them are subscription-free. But, what most of these people don’t realize is that those companies are actually making a lot of money out of these ‘free’ services. All of us, as consumers, are paying for this in one way or the other.
Every website has a business model, just like any other type of business. And, after my research, I found what these models are. There are five main types of business models for e-Commerce, and they are:
Vanity: The simple, basic website, just like this blog. Usually used to express an individual’s ideas and thoughts. For example, a family website where they all post pictures and comments. There is no intention of revenue.
Billboard: Where a marketer ‘promotes’ goods and services but they are being sold online. Just like a billboard on the street, where a lot of people get exposed to the product/service and become a potential buyer, for example. The website doesn’t bring revenue directly, but it’s purpose is to promote and create awareness in order to either increase or create revenue for a product or service.
Advertising: Websites where all programming is funded by advertising dollars. Very common these days, although the viewership is still hard to measure. Once a model is established to measure the exposure of the ads, this e-Commerce business model will be even more profitable.
Subscription: Where the user pays a certain fee to access the website.
Storefront: A website where a product is being sold to its users. It’s basically a ‘virtual store’ or an online version of a catalog. This is causing the supply chain to collapse because the consumers are getting the product straight from the manufacturer instead of passing it through the distributors and retailers, for example.
Some websites combine more than one business model to achieve their goals. There are many ways to improve a website’s profit but I believe that this type of business still has a lot to develop and grow.
Online businesses are taking over for the traditional brick & mortar stores & they are aso causing some retailers to go out of business. Yes, though it is convenient for most people to do thier shopping at home there is a people element that is lacking on the website & even though the website does employ people to keep it running these are people specially trained to do this type of work, not every & anyone can do this. This hurts alot of people who work in retail stores because less people come into the store & shop & lets face it, it is alot more expensive to operate a store than it is to operate a website. So the more stre that shut down are the more jobs lost & in many cases that cannot be something good
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