VI Semester BBA

6.2 E-Business
Study Material - 2017
Prepared By,
Mr. Ranganatha B S
Assistant Professor, NHC-M
 UNIT 1 : E-BUSINESS
Introduction, E-Commerce – definition, History of E-Commerce , types of E-Commerce
B to B etc. Comparison of traditional commerce and E-Commerce . E-Commerce
business models – major B to B, B to C model, Consumer-to-Consumer (C2C), Consumer-
to-Business (C2B) model, Peer to-Peer (P2P) model – emerging trends. Advantages/
Disadvantages of E-Commerce , web auctions, virtual communities, portals, E-business
revenue models.

Introduction of E-Commerce:
E-business, is the application of Information and Communication Technologies (ICT) in support
of all the activities of business. Commerce constitutes the exchange of products and services
between businesses, groups and individuals and can be seen as one of the essential activities of
any business. Electronic commerce focuses on the use of ICT(Information and Communication
Technologies) to enable the external activities and relationships of the business with individuals,
groups and other businesses or e business refers to business with help of internet (i.e.) doing
business with the help of internet network. The term "E-Business" was coined by IBM's
marketing and Internet teams in 1996.

In 1997, IBM marketing, with its agency Ogilvy & Mather began to use its foundation in IT
solutions and expertise to market itself as a leader of conducting business on the Internet through
the term "e-business." Then CEO Louis V. Gerstner, Jr. was prepared to invest $1 billion to
market this new brand.
After conducting worldwide market research, in October 1997, IBM began with an eight-page
piece in the Wall Street Journal that would introduce the concept of "e-business" and advertise
IBM's expertise in this new field. IBM decided not to trademark the term "e-business" in the
hopes that other companies would use the term and create an entire new industry. However, this
proved to be too successful and by 2000, to differentiate itself, IBM launched a $300 million
campaign about its "e-business infrastructure" capabilities. Since that time, however, the terms,
"e-business" and "E-Commerce " have been loosely interchangeable and have become a part of
the common vernacular

E-business includes E-Commerce, but also covers internal processes such as production,
inventory management, product development, risk management, finance, knowledge
management and human resources. E-business strategy is more complex, more focused on
internal processes, and aimed at cost savings and improvements in efficiency, productivity and
cost savings.

Meaning of E-Business:
E-Business is the conduct of business on the Internet, not only buying and selling, but
also servicing the customers and collaborating with the business partners. E-Business
includes customer service (e-service) and intra-business tasks.
Example of E-Business:

 An online system that tracks the inventory and triggers alerts at specific
levels is E-Business Inventory Management is a business process. When it
is facilitated electronically, it becomes part of E-Business.

 An online induction program for new employees automates part or whole of its
offline counterpart.

Meaning of E-Commerce:
(a) E-Commerce is defined as those commercial transactions carried out using the
electronic means, in which goods or services are delivered either electronically or in
their tangible or intangible form.

Examples of E-Commerce:
(a) Online shopping:
Buying and selling goods on the internet is one of the most popular examples of E-
Commerce .
(b) Electronic payments:
When we are buying goods online, there needs to be a mechanism to pay online too.
That is where the payment processors and payment gateways come into the picture.
Electronic payments reduce the inefficiency associated with writing the Cheque books. It
also does away with many of the safety issues that arise due to the payments made in
currency notes.

Main difference between E-Business and E-Commerce :

E-BUSINESS E-Commerce
E-Business covers the online transactions, but E-Commerce refers to the online
also extends to all the internet based transactions (i.e.) buying and selling of goods
transactions with the business partners, and/or services over the internet.
suppliers and customers like: selling directly
to the consumers, manufacturers and
suppliers; monitoring and exchanging
information; auctioning surplus inventory;
collaborative product design. These online
interactions are aimed at improving or
transforming the business processes and
efficiency. An E-Business status is received
when we handle the business using phone
calls, E-Mail orders, postal orders, and also
the online activities.

A brief history of E-Commerce :

(1) 1887: US statistician Herman Hollerith (1860–1929) sets up the forerunner of IBM
(International Business Machines), a company that will pioneer electronic forms of doing
 business in the decades that follow.
(2) 1950s–1960s: IBM pioneers online transaction processing (OLTP): a way of handling
money transactions instantly (in "real-time") using sophisticated computerized systems.
With American Airlines, IBM develops an OLTP system called SABRE (Semi-
Automatic Business Research Environment) that revolutionizes airline reservations. In
1969, IBM's transaction-processing software evolves into CICS (Customer Information
Control System), one of its least-known but most successful products.
(3) 1970: US company Docutel invents the ATM (automated teller machine, also known as
the "cashpoint"), which works using online transactions made through bank computers.
The popularity of ATMs leads to even more sophisticated forms of transaction
processing.
(4) 1980s: CompuServe, Prodigy, and AOL (America Online) let people shop from home
using their computers and telephone lines.
(5) 1989: Tim Berners-Lee (1955–) invents the World Wide Web, unwittingly laying the
foundations for an explosive growth of E-Commerce in the years that follow.
(6) 1994: Jeff Bezos (1964–) founds Amazon.com, the iconic e-store.
(7) 1994: Marc Andreessen (1971–) develops the Netscape Navigator web browser, which
ships with a feature called SSL (Secure Sockets Layer): built-in encryption that allows
credit card transactions to be carried out securely online. There is a huge explosion in
online shopping and business and the dot.com phenomenon begins.
(8) 2000/2001: The dot.com bubble bursts and over 750 online businesses go to the wall. At
one point, Amazon.com's share price plunges to less than 10 percent of its original value.
(9) 2008: E-Commerce represents about 3.4 percent of total sales.
(10)
2012: The US Census Bureau reports that US E-Commerce retail sales for the second
quarter of 2012 are $51.2 billion (adjusted for seasonal variation). In 2Q 2012, E-
Commerce represents about 4.7 percent of total sales (up from 4.2 percent one year
before).

Electronic Fund Transfer

It is a very popular electronic payment method to transfer money from one bank account to
another bank account. Accounts can be in same bank or different bank. Fund transfer can be done
using ATM (Automated Teller Machine) or using computer.
Now a day, internet based EFT is getting popularity. In this case, customer uses website provided
by the bank. Customer logins to the bank's website and registers another bank account. He/she
then places a request to transfer certain amount to that account. Customer's bank transfers
amount to other account if it is in same bank otherwise transfer request is forwarded to ACH
(Automated Clearing House) to transfer amount to other account and amount is deducted from
customer's account. Once amount is transferred to other account, customer is notified of the fund
transfer by the bank.

Traditional Commerce v/s E-Commerce

Sr.
Traditional Commerce E-Commerce
No.

Heavy dependency on information Information sharing is made easy via electronic

1 communication channels making little
exchange from person to person.
dependency on person to person information
 exchange.
Communication or transaction can be done in
Communication/ transaction are done
asynchronous way. Electronics system
in synchronous way. Manual
2 automatically handles when to pass
intervention is required for each
communication to required person or do the
communication or transaction.
transactions.
A uniform strategy can be easily established and
It is difficult to establish and maintain maintain in E-Commerce .
3 standard practices in traditional
commerce.

Communications of business depends In E-Commerce or Electronic Market, there is

4
upon individual skills. no human intervention.
Unavailability of a uniform platform
E-Commerce website provides user a platform
5 as traditional commerce depends
where al l information is available at one place.
heavily on personal communication.
No uniform platform for information E-Commerce provides a universal platform to
6 sharing as it depends heavily on support commercial / business activities across
personal communication. the globe.

Unique features of E-Commerce

(1) Ubiquity:
Ubiquity of E-Commerce means E-Commerce technological features are available
anywhere and, we can connect to the Internet at any time, because they are web-based.
It makes it possible to shop from homes, offices, video game systems with an Internet
connection and mobile phone devices. The result is called a market space(i.e.) a marketplace
which is able to extend its traditional geographic boundaries and operating hours.
Example: An example includes the ability to access the Internet wherever there is a Wi-Fi
hotspot, such as a cafe or airport. Moreover, individuals who have cell phones with data
capabilities can access the Internet without a Wi-Fi connection.
From the customer’s point of view, ubiquity reduces the transaction costs(i.e.) the cost of
participating in the market. In order to transact, it is no longer necessary that we spend
both time and money, by travelling to a market.
At a broader level, the ubiquity of E-Commerce lowers the cognitive energy required
to transact in a market space. Cognitive energy refers to the mental effort required to
complete a task. Humans generally seek to reduce cognitive energy outlays. When given a
choice, humans will choose the most convenient path, requiring the last effort.

(2) Global reach:

Technologies within ecommerce seamlessly stretch across traditional cultural and national
boundaries and enable worldwide access. Pearson Education states that instead of just offering
goods and services to a population within a specific boundary, businesses can market to and
serve an international audience. The Internet and multilingual Web sites, as well as the ability to
translate a Web page, allows international visitors all over the globe to access company Web
sites, purchase products and make business interactions.

Pearson Education is a British-owned education publishing and assessment service to schools

and corporations, as well as directly to students. Pearson owns educational media brands
including Addison–Wesley, BBC Active, Bug Club, eCollege, Fronter, Longman,
MyEnglishLab, Penguin Readers, Prentice Hall, Poptropica and Financial Times Press.

(3) Universal Standards

Individuals, businesses and governments use one set of technological, media and Internet
standards to use ecommerce features. Consequently, universal standards help to simplify the
interactions. An individual can see these standards while shopping online, as the process to
purchase items is similar on Web sites that use ecommerce technologies. Similarly, when an
individual creates an online account, the site generally requires an individual to create a
username and password so he can access his account.
This universal technical standards of E-Commerce , greatly reduce the market entry
costs. For the customers, it reduce the “search costs(i.e.) the efforts required to find
suitable products. And by creating a single, one world market space, where the prices and
the product descriptions can be inexpensively displayed to all to see, and so, the price
discovery becomes simpler, faster and more accurate. With the E-Commerce
technologies, it is possible for the first time in the history, to easily find all the
suppliers, prices and delivery terms of a specific product, anywhere in the world.

(4) Information Richness:

Information provided on the web can be made rich, by adding color to the textual
information, and adding audio and video clips. Users can access and utilize text messages
and visual and audio components to send and receive the information. Pearson Education states
that such aspects provide a rich informational experience in regards to marketing and the
consumer experience. An individual may see information richness on a company's blog, if a
post contains a video, which is related to a product and hyperlinks that allow him to look at or
purchase the product and send information about the post via text message or email. Users can
access and utilize text messages and visual and audio components to send and receive the
information.

(5) Interactivity:
E-Commerce technologies are interactive means it allow for two way communication
between the merchant and the customer. Technologies used in ecommerce require consumer
interactions in order to make an individual feel as though he is an active participant in the
transaction process. As a result, ecommerce technologies can adjust to each individual’s
experience. For example, while shopping online, an individual is able to view different angles of
some items, add products into a virtual shopping cart, checkout by inputting his payment
information and then submit the order.

(6) Information Density:

Information density means the total amount and quality of information available to all
the market participants, consumers and merchants alike.

The use of ecommerce reduces the cost to store, process and communicate information,
according to Pearson Education. At the same time, accuracy and timeliness increase; thus,
making information accurate, inexpensive much more about the consumers and plentiful.
For example, the online shopping process allows a company to receive personal, shipping,
billing and payment information from a customer, all at once and sends the customer's
information to the appropriate departments in a matter of seconds.

A number of business consequences are resulting because of the growth in the

information density. In E-Commerce markets, prices and costs become more transparent.
Price transparency refers to the ease with which the consumers can in out the variety of
prices in a market. Cost transparency refers to the ability of the consumers to discover
the actual costs, by which the merchants are paying for their products.

Also, there are advantages for the merchants as well. Online merchants can discover
much more about the various consumers, and this allows the merchants to segment the
market into groups, and permits them to engage in price discrimination(i.e.) selling the
same goods, or nearly the same goods to different targeted groups with different prices.

(7) Personalization / Customization :

Technologies within E-Commerce allow for the personalization and customization of
marketing messages groups or individuals receives. Pearson Education states that companies can
base such messages on individual characteristics of a consumer. An example of personalization
includes product recommendations based on a user's search history on a Web site that allows
individuals to create an account. Merchants can target their marketing messages to specific
individuals by adjusting those messages.

The technology also permits customization. Changing the deliver product or service based,
based on a user's preferences or prior behavior. Given the interactive nature of E-
Commerce technology, a great deal of information, about the consumer can be
gathered in the market place, at the moment of purchase.

With the increase in the information density, a great deal of information about the
consumer's past purchases and behavior can be stored and used by the online merchants.
The result is a level of personalization and customization, which is unthinkable with the
existing commerce technologies. For example, we may be able to shape what we see
on a television by selecting a channel, but, we cannot change the contents of the
channel, which we have already chosen.
Emerging trends in E-Commerce
Online businesses have picked up momentum lately, and now people are no more skeptical about
shopping online. And why it should be, not like this?
E-Commerce sites have given you access to the unfathomable market, they do not tax your
patience, and they let you save time in traveling. In this collaborative world, here are the 10
rising trend related to E-Commerce technology.
(1) Real-time Shopping Experience at Online Shopping: There is no doubt the people
 prefer to talk to real sales person and hold the product in their hand! But do not think that
E-Commerce sites cannot offer you such pleasure. Most online retailers have facilities
to chat online, get suggestions and answer all your queries. Online subscription even
allow you to hold the product and touch it (i.e. Style mint, Birch box), and some even lets
you chat all along while you are shopping with Catalog.
(2) Using Mobiles and Android Apps for Transaction: With the mobile devices
outnumbering the desktops, the use of these devices for buying will increase in the near
future. Additionally the websites must act like any app and must be very responsive in
terms of design. We have many kinds of apps now that assist consumers to check out on
his own, use payment wallet, store coupon codes like India plaza coupons
(http://www.couponraja.com/indiaplaza.html), loyalties, card numbers and have GPS for
proper advertisement of companies. There are also apps that will let you compare the
prices of the same product at different outlets.
(3) Multi-channel: Consumers these days expect a very effortless transaction, and they
expect that a commodity added to the cart will be available if one calls the customer care
or land up in the store. This will encourage the IT directors to invest in commerce
packages, E-Commerce POS systems and CRM systems.
(4) Big Data: Big Data or Hadoop methodology is handling a lot of data. This has been a
concept that has been drawing the interest of the E-Commerce site owners, and it is
here to stay. It is synching offline data and online data together so that the retailers’
decision-making capacity may be enhanced. In a nutshell, it allows retailers to understand
the hidden consumer patterns.
(5) Customization and Personalization: In an extremely volatile market one must be ready
for change all times- not otherwise but for personalization. Personalized
recommendations will find more prominence in the market!
(6) Valuing Customer Engagements than Conversion Ratio: Till date the conversion rates
were given the most priority but with the rise in E-Commerce sites, gathering new
customers will be very tough. So naturally retailers will depend on holding on to the
existing customers. Customer engagement will ensure people develop a liking for your
site and follow you regularly.
(7) Push Notifications: Pull browsing is the latest trend now, but it is not far when push
browsing will overtake it. Messaging notifications, basket notifications for selective items
on your home page- are all going to catch up momentum.
(8) Social Networking Sites: As the social networking sites increase in popularity, retailers
must be using this platform for marketing and selling their products! Facebook, Twitter,
LinkedIn will be the platforms where you will get data about the latest discounts and
offers.

(9) Mobile POS and Accessing Via Mobile: The idea of Mobile POS to make each and
every employee work and allow the customer transact without being to the billing
counter. Thanks to the Android 4.2 Jellybean and iOS 6 that allows apps that lets the
customer do endless jobs with such apps.
(10) Retailers Support to Omni-Channel Consumers: Now that mobile apps are
there in the market that lets you compare prices, check the reviews online and share the
product with friends, retailers will be integrating their separate channels into one for
offering support to the consumers.

BENEFITS OF ELECTRONIC COMMERCE

 E-Commerce has revolutionized the concept of conducting business by providing equal
chance to all the business to mark their global presence. It has also eased the customers with
online shopping and easy transactions. With the introduction of E-Commerce business,
communication has become effortless and has also changed a lot in recent years for the better.
Still, there are people who think that conventional business practices are far better than the E-
Commerce business. The benefits of Electronic commerce is Classified in to three categories
those are:

(a) Benefits of E-Commerce to Businesses

(b) Benefits of E-Commerce to Consumers
(c) Benefits of E-Commerce to Society
Its brief explanation is as follows:
(a) Benefits of E-Commerce to Businesses:
 It helps to reach Global: E-Commerce enabled business now have access to people all
around the world. In effect all E-Commerce businesses have become virtual
multinational corporations. E-Commerce expands the market place to national and
international markets. Internal and web based E-Commerce helps to reach a more
geographically dispersed customer base and more business partners as compared to the
traditional business methods.
 Cost effective: E-Commerce is proved to be highly cost effective for business concerns
as it cuts down the cost of marketing, processing, inventory management, customer care
etc. It also reduces the burden of infrastructure required for conducting business. It can
also collect and manage the information related to the customers efficiently which in turn
will assist the consumer in developing efficient promotional strategy.
 New Customers With Search Engine Visibility: Physical retail is driven by branding
and relationships. In addition to these two drivers, online retail is also driven by traffic
from search engines. It is not unusual for customers to follow a link in search engine
results and land up on an ecommerce website that they have never heard of. This
additional source of traffic can be the tipping point for some ecommerce businesses.
 It Reduces the Paper Costs: E-Commerce decreases the cost of creating, processing,
distributing, storing and retrieving information through the use of FDI systems. This
greatly cuts on the cost of paper work in terms of the time taken and the man power
required. Also the date is more secure from theft and destruction.

 Reduction in Inventories: A reduction in inventory is desirable to enable reduction in

storage, handling, insurance and administrative costs. Internet E-Commerce can helps
firms to reduce inventories by electronically linking the suppliers and buyers.
The process starts from the customer orders and uses just-in-time manufacturing.
Information on inventory levels and production rate is shared between manufacturers and
their suppliers. Using such information, the delivery schedules are “fine turned” for just-
in-time manufacturing, rather than maintaining large inventories.

 Mass Customization and Competitive advantage: The web based interactive E-

Commerce enables the customization of products/services as per the customer needs.
This provides a great competitive advantage to businesses. For example, an online travel
agency may customize the literary for a customer who wishes to travel abroad or a
 computer manufacturer may be able to supply to customized PC to a user.

 No Middlemen: There is a direct contract with customers in E-Commerce through

internet without any intermediation. Companies can now focus more on specific
customers by adapting different one-to-one marketing strategy.

 Reduced Production lead Time: The production cycle time is the time taken by a
business to build a product, beginning with the design phase and ending with the
completed product. The internet based E-Commerce enables the reduction of this cycle
time by allowing the production teams
to electronically share design specifications and refinement processes.
The reduction in the production cycle time helps to reduce the fixed overheads associated
with each unit produced. This saving in the cost production can be passed onto the
customer or may be used to achieve higher profits.

 Improved Customer relationship: Customer service can be enhanced using the internet
based E-Commerce by helping the customer to access information before, during and
after a sale. Customers may need to retrieve information on product specifications and
pricing. On the status of an order or may need online help in the installation or use of a
product he has purchased. A prompt customer support service can help businesses to earn
goodwill of customers in the long run.
 Lower Sale and Marketing Costs: The internet allows businesses to reach many
customers globally at lower costs. Thus by shifting the sale and marketing functions to
the electronic processes, the organizations can bring down greatly the marketing
overheads. For example, advertisements on the internet can cut down the cost of printing
and mailing the pamphlets or brochure. Any charge in product specifications in the case
of paper- based advertisements may mean re-printing, how-ever in web based
advertisement it may mean changes only in the web site.
 Lower Telecommunication Costs: The Internet is much cheaper than value added
networks (VANs) which were based on leasing telephone lines for the sole use of the
organization and its authorized partners. It is also cheaper to send a fax or e-mail via the
Internet than direct dialling before the coming internet, only few organizations were using
the private networks and VANs for their EDI. The cost of installation and running these
systems was very high and beneficial only to the larger firms and enough business
volumes to justify the cost.

 New Found Business Partners: Internet based E-Commerce enables businesses to find
new business partners globally on the web, thus not restricting themselves to a specific
choice of suppliers.

 Increased supply chain efficiencies: E-Commerce minimizes supply chain

inefficiencies, reduces inventories, reduces delivery delays.

 Digitization of Products and Processes: Particularly in the case of software and
music/video products, this can be downloaded or e-mailed directly to customers via the
Internet in digital or electronic format. The internet helps to expedite access to remote
information, thus adding speed to transactions and processes.

 Information sharing: It takes only few seconds to share information over the internet. a
 firm can e-mail its customers relating new products and new offers and can solve their
product related quires and welcome suggestions.

(b) Benefits of E-Commerce to Consumers:

 Gives freedom to make choices: It also gives customers an opportunity to look for
cheaper and better quality products. With E-Commerce , consumers can search the
specific product or service they require and can even find the direct manufacturer
from where they can purchase products at comparatively less price. Shopping online
is time saving and convenient. In addition to it, consumers also get to see the reviews
of other consumers that will help in making beneficial purchase decision.
 Increase in variety of goods: As the market will expand the variety of goods
available will also expand. Wide variety of goods are available than ever before.
 It gives more choice and alternatives: E-Commerce provides more choice and
alternatives to customers that will increase the choice of vendors or products because
they are no longer geographically constrained to reach a vendor or a product. A large
number of vendors/manufacturers are marketing and selling their products/services on
the internet.
Virtual shops (e.g.Homeshop18, snapdeal, flipkart) can offer the consumers a large
number of products/services at a single site.
 Convenience of Shopping at Home: allows the consumers to shop went it is
convenient for them not strictly during store hours. Also for handicapped or ill
consumers, home shopping on the internet provides a lot of opportunity and
convenience.
 Ensure Secrecy: the various security measures that are in built are used in E-
Commerce transactions to prevent any unauthorised access to information on the
internet for ensure secrecy they maintain encoding, encryption and passwords.
 More Competitive Prices and Increased Price comparison capabilities: The large
amount of information available on the internet is giving more and more power to the
consumers. Consumers can make comparison shopping. There are several online
services that allow customers to browse multiple ecommerce merchants and find the
best prices.

 Access to Greater Amounts of Information on Demand: Consumers can have

access to large amount of information online on products and services, their features
and prices. This further translates into more choice to customers in shopping and
greater price comparison opportunities.
 Time compression: Time is not a factor with Internet communication between firms
and their stakeholders. Online stores can be open 24/7; people can communicate as
their schedules permit; time zones disappear for managers collaborating with partners
on other continents.
 Quick Delivery of Digitized Products/Services: E-Commerce allows quick
delivery in the case of digitized products such as music, software etc.
 Provide Comparison Shopping: Economic facilitates comparison shopping. There
are several online services that allow customers to browse multiple ecommerce
merchants and find the best prices.
 E-payment system: The electronic payment system on the internet is facilitated by
payment gateways or intermediary between the business firm and customers and
between the business firms for assuring the payments from the customers.
(c) Benefits of E-Commerce to Society:
 Enables More Flexible Working Practices: Which enhances the quality of life for a
whole host of people in society, enabling them to work from home. Not only is this more
convenient and provides happier and less stressful working environments. It also
potentially reduces environmental pollution a fewer people have to travel to work
regularly.

 Connects People: Enables people in developing countries and rural areas to enjoy and
access products, services, information and other people which otherwise would not be
easily available to them.

 Facilitates Delivery of Public Services: The health services available over the Internet
on-line consultation with doctors or nurses, filing taxes over the Internet through the
Inland Revenue website.
DISADVANTAGES OF ELECTRONIC COMMERCE
The following are the important drawback/disadvantages of electronic commerce:
 Ecommerce Lacks That Personal Touch: Not that all physical retailers have a personal
approach, but we do know of several retailers who value human relationship. As a result,
shopping at those retail outlets is reassuring and refreshing. Clicking on “Buy Now”, and
piling up products in virtual shopping carts.

 System and data integrity: A computer virus is a program that clones itself when an
injected piece of program code is executed. it is malicious program. data protection from
the viruses that causes unnecessary delays and can clean up all stored information must.
In order to create cost effective response to the varied technical and human threats to web
site security.

 E-Commerce Delays Goods: Ecommerce websites deliver to take a lot longer to get
the goods into consumer hands. Even with express shipping the earliest consumer get
goods in next day. An exception to this rule is in the case of digital goods an e-book or a
music file. In this case, ecommerce might actually be faster than purchasing goods from a
physical store.

 System scalability: It means regular up graduation of the website is required when the
number of website users increase over period of time or during busy seasons. As a result
of rush of enquiries on the companies site, it might cause slow down of the system
performance and eventually loss of customers.
 Dependent on internet: E-Commerce is dependent on internet. Mechanical failures in
the system can cause unpredictable effects on the total processes. Furthermore, there are
many hackers who look for opportunities, and thus an ecommerce site, service, payment
gateways; all are always prone to attack. Things such as viruses could mean losing the
site or affecting the customer’s computers while on purchasing from the website.
 Many Goods Cannot Be Purchased Online: Despite its many conveniences, there are
goods that consumer cannot buy online. Most of these would be in the categories of
“perishable” or “odd-sized”. It could order both of them online, but consider the
inconvenience. The Popsicle would have to be transported in refrigerated trucks. Unless
the seller was willing to make a huge loss, the cost of shipping that Popsicle would far
exceed the cost of the Popsicle.
 Products people won’t buy online: There are various products which the customers
 would like to first touch and feel and then buy it. For example: Furniture users want to
touch ant they want to sit on it, feel the texture of the fabric.
 Ecommerce Does Not Allow Experiencing the Product before Purchase: It cannot
touch the fabric of the garment when consumers wants to buy and it check how the shoe
feels on our feet, consumer cannot “test” the perfume that consumer want to buy. In many
cases, customers want to experience the product before purchase. Ecommerce does not
allow that. If they buy a music system, they cannot play it online to check if it sounds
right? If they are purchasing a home-theatre system, they would much rather sit in the
“experience centre” that several retails store set up.
 Loyal customers: Great amount of effort is put on building a customer relationship buy
the organizations and retaining them is rather a bigger job. A business cannot survive
without a loyal customer.
 Shopping is Social Experience: People love to shop in the mall because it gives them an
opportunity to have fun with friends and family. It’s something online stores lack of.
 Anyone one Can Set Up an Ecommerce Website: Where online storefront providers
bring the ability to set up an ecommerce store within minutes. The lowered barriers to
entry might be a great attraction to the aspiring ecommerce entrepreneur. But for the
buyer, reliability can be an issue. This could lead customers to restrict their online
purchases to famous ecommerce websites.
 Too Many Competitors: If there are thousands of online stores selling similar products,
how company can attract visitors, so they actually but from it and not from others? As the
technology has boomed the competition is increasing because more and more people are
opening their businesses on internet

 Security: When making an online purchase consumer have to provide at least credit card
information and mailing address. In many cases ecommerce websites are able to harvest
other information about our online behaviour and preferences. This could lead to credit
card fraud, or worse, identity theft.

Some of the very important E-Commerce models are elaborately explained as

follows:
(1) Business - to - Business (B2B):
Business - to - Business (B2B) is a transaction that occurs between two companies, as
opposed to a transaction involving a consumer. This term may also describe a company
that provides goods or services for another company.
Business - to - Business (B2B) is a transaction that exists between businesses, such as
those involving
 a manufacturer and wholesaler, or,
 a wholesaler and a retailer.
Website following B2B business model sells its product to an intermediate buyer who then
sells the product to the final customer. As an example, a wholesaler places an order from a
company's website and after receiving the consignment, sells the end product to final
customer who comes to buy the product at wholesaler's retail outlet.
Example:
Examples of B2B Model:
 Let us take an example of www.amazon.com. As we know, www.flipkart.com is an online
store that sells various products from various companies. Assume that the skyward
publishers want to sell the books online. In this case, the publishers have the option of
either developing their own site or displaying their books on the Amazon site
(www.flipkart.com), or both. The publishers mainly choose to display their books on
www.flikart.com at it gives them a larger audience. Do Now, to do this, the publishers
need to transact with flipkart, involving business houses on the both the ends, is the B2B
model.
 Consider another example. ABC company sells automobile parts and XYZ company
assembles these parts and then sells the automobile to customers. XYZ company comes
across the website of ABC and finds it suitable. XYZ therefore, a request for more
information about ABC and finally, decides to purchase automobile parts automobile
from ABC. To do this, XYZ places an order on the website of ABC. After ABC receives
the order details, it validates the information. As soon as the order is confirm, the
payment procedures are settled. Finally, ABC sends an acknowledgement of payment to
XYZ and delivers the goods as per the shipment details decided between the two
organizations.

 Following are the leading items in B2B r-Commerce:-

 Electronics
 Shipping and Warehousing
 Motor Vehicles

Examples of some of the B2B Websites:

1. www.Getrespons.com: It is an innovative B2B service based company that has
revolutionized the small business email marketing niche. Providing a web based email
marketing platform aimed at the small business owner wanting to market their own
business online.

2. www.Incorporate.com: Incorporate.com who have reduced the cost and streamlined the
process of creating, limited liability companies. In a few easy steps online, anyone can
create their own company for a fraction of the cost a corporate lawyer would charge

The impact of B2B markets on the economy:

B2B E-Commerce have a significant impact on the economy as they help to lower various
cost involved in business transactions. There are the cost areas that are significantly reduced
through the conduct of B2B E-Commerce :

(a) Search costs:

 Buyers need not go through intermediaries to search for information about suppliers,
products and prices as in a traditional supply chain. Internet is more efficient information
channel then its traditional counterpart. So effort, time and money can be saved. In B2B,
buyers and sellers are gathered together into a single online trading community and reducing
search cost even further.

(b )Processing cost:
Reduction in the costs of processing transactions (e.g. invoices, purchase orders and payment
schemes), as B2B allows for the automation of transaction processes and therefore the quick
implementation of the same compared to telephone and fax.

(c) Avoid intermediaries:

Through B2B e-markets, suppliers are able to interact and transact directly with buyers there
by eliminating intermediaries and distributors.

(d) Transparency in pricing:

The gathering of a large number of buyers and sellers in a single e-market reveals market
price information and transactions processing to participants. Thus increases the price
transparency.

Advantages and Disadvantages of B2B Model

Advantages:

 It can efficiently maintain the moment of the supply chain and the manufacturing and
procuring processes.
 It can automate corporate processes to deliver the right products and services quickly
and cost-effectively.
 B2B is global trade market, where we can but anything at anytime.
 Creates new sales opportunities
 It lowers the search cost and time for buyers to find products and vendors

 Delay of goods where the earliest to receive goods would be the next day
 Some goods cannot be purchased online such as perishable items
 Enable to experience the product before purchasing
 Fraudulent websites and scams
 Security issues leading to credit card fraud or identity theft

(2) Business - to – Consumer(B2C):

Business - to – Consumer(B2C) is a transaction in which the businesses sells their
products or services to the consumers directly. It refers to the online online selling of
products, or, e-tailing, in which the manufacturers or retailers sell their products directly
to the consumers over the internet.

Website following B2C business model sells its product directly to a customer. A customer can
view products shown on the website of business organization. The customer can choose a
product and order the same. Website will send a notification to the business organization via
email and organization will dispatch the product/goods to the customer.
Business2consumer (B2C) :
Online transactions are made between businesses and individual consumers
e-Tailing (online retailing)

Examples: amazon.com, dell.com

Examples of B2C Model

 Consider an example in which a transaction is conducted between a business organisation

and a consumer. A business house, www.bagskart.com, displays and sells a range of
bags on their Website. The details information of all their products is wants to buy a gift
for his wife. He therefore, logs on to the site and selects a gift from the catalog. He also
gets the detailed information about the gift such as, the price, availability, discounts, and
so on from their catalog. Finally, when he decides to buy the gift, he places an order for
the gift on their Web site. To place an order, he needs to specify his personal and credit
card information on the site. The credit card details will be passed to the bank for
verification. This information is then validated by bank and stored in their database. On
verification of the information the order is processed. Therefore, as we can see, the B2C
model involves transactions between a consumer and one or more business organisations.
 The example of the www.flipkart.com site also involves the B2C model in which the
consumer searches for a book on their site and places an order, if required. This implies
that a complete business solution might be an integration solution of more than one
business model. For example, www.flipkart.com includes the B2B model in which the
publishers transact with flipkart and the B2C model in which an individual consumer
transact with the business organization.

Examples of some of the B2C Websites:

1. Fashion & Lifestyle
Sunglassesindia.com, Brandsndeals.com, Shopperstop.com
2. Custom designed T-shirt, mug, calendar etc
Myntra.com, Zoomin.com
3. Gifts, cakes etc.
Infibeam.com, IndianGiftsPortal.com, Giftsandlifestyle.com

Key features of a B2C model:

 Heavy advertising required to attract large number of customers.

 High investment in terms of hardware/ software.
 Support or good customer care service.
 Consumer Shopping Procedure
Steps used in B2C E-Commerce :
Types of B2C:
Different types of B2C Ecommerce are: direct sellers, online intermediaries, advertising-
based models, community-based models and fee-based models. Each type is so different
 from the other that they are not directly comparable. Some B2C businesses utilize more than
one type to reach different audiences.

Type of B2C Description

(a) Direct Sellers Direct sellers, such as online retailers, sell a product or
service directly to the customer via a website. Direct
sellers are divided into e-tailers and manufacturers. E-
tailers are electronic retailers that either ship products
from other their own warehouses or trigger deliveries
from other companies Product manufacturers use the
Internet as a catalog and sales channel to eliminate
intermediaries.

(b) Online Intermediaries Online intermediaries perform the same function as any
other broker. The business allows non-B2C companies
to reap some Altering the price-setting processes. Of the
benefits. Brokers offer buyers a service and help by

Advantages and Disadvantages of B2C Model:

Advantages:
1) Advantages for the Business:
 It can reach worldwide market with unlimited volume of customers.
 It can display information, pictures, and prices of products or services without
spending a fortune on colourful advertisements.
 Order processing an easier task than before.
 It can operate on decreased, little, or even no overhead.

2) Advantages for the Consumers:

 Convenience: Consumers can shop at any time of day, from the privacy of their own
home. Internet shopping can be done at time either day or night.
 Many choice: Consumers is offered many choices for the same products under
various brands
 Less Hassle: Consumers can shop online without hassles like traffic, congestion of
the malls etc.
Disadvantages:
1) Disadvantages for the Business:
 Many websites offering the same product to the customers
 Technological problems can cause the website to not operate properly thereby
loosing the customer.
 People are hesitant to enter the credit card details if the website does not have
proper security norms.

2) Disadvantages for the consumer:

 Security issues, especially credit card information which is very sensitive.
Fraud, rip-offs are very common on the web.
  Customer service may not be satisfactory for the consumers.

(3) Consumer - to - Consumer (C2C):

C2C, or customer-to-customer, or consumer-to-consumer, is a business model that facilitates the
transaction of products or services between customers.

An example of C2C would be the classifieds section of newspaper, or an auction. In both of

these cases, a customer, not a business, sells goods or services to another customer. The goal of a
C2C is to enable this relationship, helping buyers and sellers locate each other. Customers can
benefit from the competition for products and easily find products that may otherwise be difficult
to locate.

Website following C2C business model helps consumer to sell their assets like residential
property, cars, motorcycles etc. or rent a room by publishing their information on the website.
Website may or may not charge the consumer for its services. Another consumer may opt to buy
the product of the first customer by viewing the post/advertisement on the website.
consumer-to-consumer (C2C)

Consumers sell directly to other consumers

Example of Consumer to Consumer (C2C) Model
Let us take an example of E-Bay. When a customer plan to sell his products to other customers
on the Website of E-Bay, he first needs to interact with an E-Bay site, which in this case acts as a
facilitator of the overall transaction. Then, the seller can host his product on www.E-Bay.in
which in turn charges him for this.

Any buyer can now browse the site of E-Bay to search for the product he interested in. If the
buyer comes across such a product, he places an order for the same on the Web site of E-Bay. E-
Bay now purchase the product from the seller and then, sells it to the buyer. In this way, though
the transaction is between two customers, an organization acts as an interface between the two
organizations.

Examples of C2C websites:

1) Craigslist: Craigslist is one of the top websites in the world and the leading service for
classified ads. Consumers can not only buy, sell and trade items, but also conduct other
transactions such as housing and job searches.
2) E-Bay: E-Bay is a global online shopping and auction website that offers millions of
consumers a wide variety of goods and services. Sellers pay a fee or commission to sell
their items and buyers can shop and make purchases for free. Buyers place bids just like
in a traditional auction and only acquire an item if they are the highest bidder. Monetary
transactions are typically completed through PayPal, a service for online money transfers.
Once a transaction is complete, buyers and sellers can rate each other based on their
trustworthiness.
3) Examples of other C2C websites:
 www.olx.in (internet classified)
 www.carwale.com (internet classified)
 www.gaadi.com (internet classified)

Key features of a C2C model:

  Consumers interact directly with other consumers. They exchange information such as :
 Expert knowledge where one person asks a question about anything and gets an e-
mail reply from the community of other individuals.
 Opinions about companies and products
 There is also an exchange of goods between people both with consumer auction sites
such as e-bay, swapitshop.com, where individuals swap goods with each other without
the exchange of money.
 In more recent times the blogging phenomenon has incorporated this business model
well. The development of online communities with specific niche interests can gain huge
followings. Most current C2C sites, such as E-Bay, have both streamlined and globalised
traditional person-to-person trading, which was usually conducted through such forms as
garage sales, collectibles shows, flea markets and more, with their web interface. This
facilities easy exploration for buyers and enables the sellers to immediately list an item
for sale within minutes of registering.
 C2C sites make money by charging fees to sellers. Although it’s free to shop and place
bids, sellers place fees to list items for sale, add on promotional features, and successfully
complete transactions.

Advantages and disadvantages of C2C Model:

Advantages:
 Customers can directly contact sellers and eliminate the middle man.
 Anyone can now sell and advertise a product in the convenience of one’s home.
 Sellers can reach both national and international customers and greatly increase their
market.
 Feedback on the purchased product helps both the seller and potential customers.
 The transactions occur at a swift rate with the use of online payments systems such as
paypal.
Disadvantages
 Although online auctions allow one to display his or her products, there is often a fee
associated with such exhibitions. Other times, websites may charge a commission when
products are sold. With the growing use of online auctions, the number of internet-related
auction frauds has also increased.
 Identity theft has become a rising issue. Scam artists often create sites with popular
domain names such as “e bay “ in order to attract unknowing E-Bay customers. These
sites will ask for personal information including credit card numbers. Numerous cases
have been documented in which users find unknown charges on their credit card
statements and withdrawals in their bank statements after purchasing something online.
 Illegal or restricted products and services have been found on auction sites. Anything
from illegal drugs, pirated works have appeared on such sites.

(4) Consumer - to - Business (C2B):

Definition of Consumer to Business (C2B):
Consumer to business E-Commerce refers to the transactions taking place between consumers to
business organisations. The C2B model completely transposes the traditional business-to-
consumer (B2C) model, where a business produces services and products for consumer
consumption.
Customer to business (C2B), sometimes known as Consumer to Business is the most recent E-
Commerce business model. In this model, individual customers offer to sell products and
services to companies who are prepared to purchase them. This business model is the opposite of
the traditional B2C model. The idea is that the individual/end user provides a product or service
that the business can use to complete a business process or gain competitive advantage.
In this model, a consumer approaches website showing multiple business organizations for a
particular service. Consumer places an estimate of amount he/she wants to spend for a particular
service. For example, comparison of interest rates of personal loan/ car loan provided by various
banks via website. Business organization that fulfils the consumer's requirement within specified
budget approaches the customer and provides its services.
Consumer2business (C2B)

Individuals use the Internet to sell products or services to organizations

The C2B model involves a transaction that is conducted between a consumer and a business
organization. It is similar to the B2C model, however, the difference is that in this a case the
consumer is the seller and the business organisation is the buyer. In this kind of a transaction, the
consumers decide the price of a particular product rather than the supplier. This category
includes individuals who sell products and services to organisations. In the C2B model, a
consumer provides a business with a fee-based opportunity to market a product or service on the
consumer’s website or blog. In this type of relationship, a website owner is paid to review the
product or service through blog posts, videos or podcasts. In most cases, paid advertisement
space is also available on the consumer website.

For the C2B relationship to be fulfilled, the players must be clearly defined. The consumer could
be any individual who has something to offer a business, either a service or a good. Examples
could be a blogger, as mentioned before, or a photographer offering stock images to businesses.
This could also be someone answering a poll through a survey site, or offering job hiring service
by referring someone through referral hiring sites.

Example of C2B Model:

There are only a few kinds of companies whose trading models could be considered as C2B.
 Online Advertising sites like Google Ad sense, affiliation platforms like Commission
Junction and affiliation programs like Amazon are the best examples of C2B schemes.
Individuals can display advertising banners, contextual text ads or any other promotional
items on their personal websites. Individuals are directly commissioned to provide an
advertising/selling service to companies.
 Online surveys (GozingSurveys, Surveyscout, and Survey Monkey) are also typical
C2B models. Individuals offer the service to reply to the company’s survey and
companies pay individual for this service.

Key features of a C2B model:

Exchange of products, information or services are from individuals to business. A classic
example of this would be individuals selling their services to businesses.

Steps involved in C2B model:

 Consumer approaches website showing multiple business organisations for a particular
service. Consumer places an estimate of amount he/she wants to spend for a particular
service.
  Business organisation who fulfils the consumer’s requirement within specified budget
approaches the customer and provides its services..

Example: Comparison of interest rates of personal loan/ car loan provided by various
banks via website.

Peer – to – to peer (P2P) - A New Model:

Definition of Peer to Peer Model:

A peer-to-peer (P2P) network is a type of decentralized and distributed networks architecture in

which individuals nodes in the network (called “peers”) act as both suppliers and consumers of
resources, in contrast to the centralized client-server model where client nodes request access to
resources provided by central servers. Users in a P2P network can pool their resources, sharing
each other’s files, storage systems, and applications, thereby paving the way for extensive
collaboration and efficient information sharing.

P2P is not only a E-Commerce type, but also a technology that allows people to share computer
files and computer resources without going through a central web server. The required software
should be installed by both sides so that they can communicate on the common platform. As
from the beginning this type of E-Commerce has been launched to the free usage, it has quite
low revenue. It consists in mutual help of consumers. The main disadvantage of this model of
transaction often entangles cyber laws.
Peer – to – to peer (P2P) technology enables the internet users to share the files and
computer resources directly without going to the central web server. Therefore, P2P
works without an intermediary.

Example:
(A) Napster.co., which was established to aid the internet users in finding and sharing
the online music files known as MP3 files, is perhaps the most well known example of
Peer – to – to peer(P2P) E-Commerce . Also, it is important to note that Napster is
partially
Peer – to – to peer(P2P), because, it relies on a central database to show which users are
sharing the music files.
Since 1999, entrepreneurs and venture capitalists have attempted to adapt various aspects of
peer-to-peer technology into peer-to-peer (P2P) E-Commerce . In a peer-to-peer network, tasks
such as searching for files or streaming audio/video are shared amongst multiple interconnected
peers who each make a portion of their resources such as processing power, disk storage or
network bandwidth directly available to other network participants, without the need for
centralized coordination by servers.
Security, of course, is a major concern for businesses looking to implement P2P networks. Since
P2P allows users direct access to other’s hard drives. Another obvious security concern was the
heightened need to safeguard against malicious or careless P2P users uploading viruses directly
into other’s computers.

P2P or Peer to Peer is sometimes unified with E-Commerce type, C2C, because of the
same parties participating in the transaction. Like C2C model, P2P model links users, enabling
them to share the files and computer resources without a common server. The focus in P2P
companies is on helping individuals make information available for anyone’s use connecting
users on the web. Historically, P2P software technology has been used to allow the sharing of
copyrighted music files in violation of digital copyright law. The challenge for P2P ventures is to
develop viable, legal business models that will enable them to make money.

Internet revenue model:

For a publisher or other media site owner, eight types of revenue model are possible online.

1. Revenue from subscription access to content:

The subscription model applies to the companies that charge subscribers a fee, normally
to view text or graphical information. A range of documents can be accessed for a period of a
month or typically a year. Here, one of the main challenges the companies are facing is,
marketing to a much smaller niche audience who are willing to pay the regular fees, as
opposed to a much larger audience that might use the services at no charge.
For example, I subscribed to FT.com for access to the digital technology section for around ‚ 80
GBP per year a few years ago. Smart Insights Expert members have an annual subscription in
this form.

2. Revenue from Pay Per View access to document:

Here payment occurs for single access to a document, video or music clip which can be
downloaded. It may or may not be protected with a password or Digital Rights Management.
For example, I've paid to access detailed best practice guides on Internet marketing
from Marketing Sherpa.
Digital rights management (DRM) The use of different technologies to protect the distribution of
digital services or content such as software, music, movies, or other digital data.

3. Revenue from CPM display advertising on site:

(e.g. banners ads and skyscrapers).
This model relies on advertising to make money. CPM stands for "cost per thousand" where
M denotes "Mille". The site owner such as FT.com charges all the advertisers a rate card price
(for example 50 GBP CPM) according to the number of its ads shown to site visitors. Ads may
be served by the site owners' own ad server or more commonly through a third-party ad network
service such as Google Ad Sense as is the case with my site.

4. Revenue from CPC advertising on site (pay per click text ads):
CPC stands for "Cost Per Click". Advertisers are charged not simply for the number of times
their ads are displayed, but according to the number of times they are clicked. These are typically
text ads similar to sponsored links within a search engine but delivered over a network of third-
party sites by on a search engine such as the Google Ad sense Network.
Typical costs per click can be surprisingly high, (i.e.) they are in the range GBP 0.10 to "‚ GBP
4, but sometimes up to GBP 40 for some categories such as "life insurance" that have a high
value to the advertiser.
The revenue for search engines or publishers from these sources can also be a fair proportion of
this.
Google Network Revenues through Ads generate around one third of Google's revenue. For me,
the Google's content networks are one of the biggest secrets in online marketing with search
engines such as Google generating over a third of their revenue from the network, but some
advertisers not realizing their ads are being displayed beyond search engines and so not served
for this purpose.
Google is the innovator and offers options for different formats of ad units including text ads,
display ads, streamed videos and now even cost per action as part of its pay per action scheme.

5. Revenue from Sponsorship of site sections or content types (typically fixed fee for a
period):
A company can pay to advertise a site channel or section. For example, bank HSBC could
sponsors the Money section on a media site. This type of deal is often struck for a fixed amount
per year. It may also be part of a reciprocal arrangement, sometimes known as a "contra-deal"
where neither party pays.
A fixed-fee sponsorship approach was famously used by Alex Tew in 2005, a 21-year-old
considering going to University in the UK who was concerned about paying off his university
debts. This is no longer a concern since he earned $1,000,000 in 4 months when he set up
his Million Dollar Homepage.
His page is divided into 100-pixel blocks (each measuring 10x10 pixels) of which there are
10,000 giving 1,000,000 pixels in total. Alex spent £50 on buying the domain name
(www.milliondollarhomepage.com) and a basic web-hosting package. He designed the site
himself but it began as a blank page.

6. Affiliate revenue (CPA, but could be CPC):

Affiliate revenue is commission base. For example I display Amazon books on my personal
blog site DaveChaffey.com and receive around 5% of the cover price as a fee from Amazon.
Such an arrangement is sometimes known as Cost Per Acquisition (CPA ).
Increasingly this approach is replacing CPM or CPC approaches where the advertiser has more
negotiating power. For example, in 2005 manufacturing company Unilever negotiated CPA deals
with online publishers where it paid for every e-mail address captured by a campaign rather than
a traditional CPM deal.
However, it depends on the power of the publisher who will often receive more revenue overall
for CPM deals. After all, the publisher cannot influence the quality of the ad creative e to click
which will affect the Click through rate on the ad and so the CPM.

7. Subscriber data access for e-mail marketing:

The data, a site owner has about its customers, is also potentially valuable since it can said
different forms of e-mail to its customers if they have given their permission that they are happy
to receive e-mail either from the publisher or third parties. The site owner can charge for
advertisements placed in its newsletter or can deliver a separate message on behalf of the
advertiser (sometimes known as list rental). A related approach is to conduct market research
with the site customers.

8. Access to customers for online research:

An example of a company that uses this approach to attract revenue from surveys is the teen site
Dubit.
Considering all of these approaches to revenue generation together, the site owner will seek to
use the best combination of these techniques to maximize the revenue. To assess how effective
different pages or sites in their portfolio are at generating revenue, they will use two approaches.
The first is eCPM, or effective Cost Per Thousand.
This looks at the total they can charge (or cost to advertisers) for each page or site. Through
increasing the number of ad units on each page this value will increase. This is why you will see
some sites which are cluttered with ads. The other alternative to assess page or site revenue
generating effectiveness is Revenue per click (RPC), which is also known as Earnings Per Click
(EPC).
This is particularly important for affiliate marketers who make money through commission when
their visitors click through to third party retail sites such as Amazon, and then purchase there.

Web Auction:

A web auction/online auction is an auction which is held over the internet. Online auctions
remove the physical limitations of traditional auctions such as geography, presence, time,
space and target much wider audience. This arrival in reach ability has also made it easier to
commit unlawful actions within an auction.
Web Auction is a simple auction designed for organizations or individuals who want to hold an
auction. It is not like E-Bay in the sense that only Administrator can add products. Products
can have pictures, price, minimum bids, bid increments, and more.

Definition and Examples: Web Auction or Online Auction

Online auctions are places that people can go in order to buy or sell goods or services online
for a small fee. Anyone can sell an item and anyone can bid on an item. The highest bidder
wins the auction and pay for the good or service and then expects for to receive their winning
in the next couple of days through the mail or some other way of delivery.

The largest online auction website is E-Bay followed by other sites such as Yahoo ad
Amazon. These sites allow ordinary web citizens to sell their goods. The sale is generally
based on a system of trust, but some people are finding profit in abusing the trust of others,
while some are stretching the limits of the law via online auctions. Below is a listing of some
of the major online auction sites on the Internet.
 Auction-Warehouse - http://www.auction-warehouse.com
 Craigslist - http://www.craiglist.org
 E-Bay – http://www.ubid.com

Online auctions are a widely accepted business model for the following reasons:
 No fixed time constraint
 Flexible time limits
 No geographical limitations
 Offers highly intensive social interactions
 Includes a large numbers of sellers and bidders, which encourages a high-volume online
business
 Online auctions include business to business (B2B), business to consumer (B2C), and
consumer to consumer (C2C) auctions. E-Bay is the best example of an auction site that uses
all three methodologies.

The online auction business model continues to evolve according to market needs. Examples
include E-Bay, Web Store, Online Auction and Overstock. E-Bay and other providers
encourage legitimate bidding activity through bidder block lists. E-Bay also offers Dutch
auctions for large inventories, where auction bidders pay according to an item’s highest sale
price.

Like other online services and activities, online auctions can attract stolen or pirated products.

Setting up an auction with Web Auction:

Setting up an auction with Web Auction is quick and simple. We can either host the auction on
our own web server or set up our own auction on our servers for free. We have full control over
our auction. We can create your own categories, set the start dates and end dates for our auction,
select a custom header and footer, and enter the product categories that we want to have in our
auction.
Once the auction is installed and set up, we can begin adding the products immediately. Each
product can have a minimum bid, open and close date, a photo, and a preferred bid increment
associated with it.
Users of our auction can browse the products that are up for auction and submit the bids. The
winner will receive an email when the auction is closed with instructions on how to proceed.
In e auction is a service in which auction users or participants sell or bid for products or services
via the Internet. Virtual auctions facilitate online activities between buyers and sellers in
different locations or geographical areas. Various auction sites provide users with platforms
Powered by Different types of Auction Software

An online auction is also known as a virtual auction.

Types of Online Auctions:

There are six different basic types of online auctions:
Benefits of Online Auctions:
Online auctions hold two other potential benefits for small businesses, as well. First, buying and
selling over the Internet can help expand the global reach of a small business, opening
international markets that would have been impossible to reach via normal marketing channels.

Second, auctions can help new businesses-or those offering new products-to establish market
prices based on supply and demand. Small businesses can use online auctions to gauges interest
in their products and find out what customers are willing to pay. Furthermore, companies can
collect such information quickly and informally, rather than investing in time-consuming and
expensive market research.

VIRTUAL COMMUNITY:
A Virtual community is a community of people sharing common interests, ideas, and feelings
over the internet or other collaborative networks.
Virtual Community:
A virtual community is a group of people who share common interests, feelings or ideas, or
pursue similar goals over the Internet or over any collaborative network. Social media is the most
common vehicle for this sharing and interaction, which can potentially transcend geographical
boundaries, race, culture, political views and religion when people are connected by another
common interest or agenda.
One of the most pervasive types of virtual community operates under social networking services
consisting of various online communities. In a virtual community group of individuals interact
through specific social media, potentially crossing geographical and political boundaries in order
to pursue mutual interests or goals.
One of the first champions virtual community was Howard Rheingold, who created one of the
major first major Internet communities, called “The Well” In this book, The Virtual Community,
(1993) Rheingold defines virtual communities as “social aggregations that emerge from the
Internet when enough people carry on public discussions long enough and with sufficient human
feeling to form webs of personal relationships in cyberspace”.

This term is originally attributed to Howard Rheingold’s book "The Virtual Community," which
was published in 1993. In it, Rheingold describes the virtual community as social aggregations
that emerge from the Internet when people continue discussions long enough and with enough
emotion to form real human relationships within cyberspace. For whatever other reason, virtual
communities are built around certain needs and goals. Here are some common examples of
virtual community types: Forums, online chat rooms, and specialized information communities,
email groups these are made up of people who either discuss or share about a common
topic/theme. They may also act as a place to ask experts in a specific field for help. Virtual
worlds the people in virtual worlds share the common interest of the world itself. These worlds
are often massively multiplayer games like "World of Warcraft." Social networks Facebook,
Twitter and Google+ are the most common social networking hubs, and they all allow people to
form smaller communities based on other interests. Other communities in this category, such as
YouTube, focused on media sharing.

Benefits of Online/Virtual Community:

 Gives your business worldwide exposure: One of the benefits of online communities is
that it gives your business a worldwide exposure. Reaching out to people from any part of
the world, from all walks of life is the first benefit of online community. An online
community was developed so that people have a common place where they can share
information on significant topics.

 Gain knowledge from other online community members: The second benefit of online
community is that you gain knowledge from other members of the online community you
will join. Interact with other people who are members of your online community and put
their principles into practice, whenever it is appropriate.

 Form a formidable partnership: The third benefit of online community is that we you
get the chance to form a formidable partnership with other members. Approach
people/businesses, which complement yours and ask them if they are interested in
working with you towards a common goal. The online community is where you will
build your credibility as an entrepreneur, before you approach complementing businesses.
  Maximize your presence in your online community: Keep in mind that you are not
only building a relationship when you join an online community you are also marketing
your business in a subtle way. So as a marketer be sure that your online profile is
complete, which means that you need to include more information about yourself and of
course your business.

 Be wise in choosing your online community: Verify who the members are in the online
community you are planning to join. Be selective with the online community you will
join to avoid mixing in with the wrong type of people/business. It would be to your
advantage if you go with people/businesses that are highly relevant to your business. Also
be sure that the other members of the online community you will join have enough in
common with you and your business and really excited about interacting with you online.

 Builds relationships: The last and probably the most important benefit of online
community is that it gives you a chance to build a relationship with people. We all know
the importance of relationships when it comes to business. And one of the least expensive
ways to build a relationship with customers/prospects is through the use of online
communities. The major comfortable your customers/prospects with your business the
bigger opportunities that you will get. Keep in mind that this relationship that you build is
not for a one time sale only but you are building a relationship through online
communities for the long term.

WEB PORTAL
The definition of a portable:
The definition of a portable is a gateway or entry to something else.
a. An example of a portable is a door into a room.
b. An example of a portable is a website that takes you to many other websites.
WEB PORTAL:
A web portal or Public portal refers to a Web site or a service, that offers a broad
array of resources and services, such as E-Mail, forums, search engines and online
shopping malls.
A web portal is specially-designed Web page at a website which brings information together
from diverse sources in a uniform way.

The first web portals were online services, such as AOL, that provided access to the
Web, but, by now, most of the traditional search engines have transformed themselves
into web portals to attract and keep a larger audience.

A web portal is a single Web interface that provides personalized access to information,
applications, business processes, and much more. By using portal technology, an organization
can lower development and deployment costs and significantly increase productivity. Using a
portal, information can be aggregated and integrated within a particular working environment
application, or service, or a single interface can be used to target an individual user’s needs and
interests. Portals help to harmonize content, commerce, and collaboration with business goals.
Features of Web Portals:

 Each information source gets its dedicated area on the page for displaying information
called as a portal the user can configure which ones to display. The role of the user in an
organization may determine which content can be added to the portal or deleted from the
portal configuration.
 A portal may use a search engine API to permit users to search intranet content as
opposed to extranet content by restricting which domains may be searched. Apart from
this common search engines feature, web portals may offer other services such as e-mail,
news, stock quotes, information from databases and even entertainment content.
 Portals provide a way for enterprise and organization to provide a consistent look and feel
with access control and procedures for multiple applications and databases, which
otherwise would have been different web entities at various URLs. The features available
may be restricted by whether access is by an authorized and authenticated user (employee,
member) or an anonymous site visitor.

Types of Web Portals:

The portals can be differentiated on the basis of their content and intended users. There are
different types of portals, they can be categorized into:

(1) Vertical Portals:

(2) Horizontal portal
Its brief explanation is as follows:
(1) Vertical Portals:
A vertical portal (also known as a "portal") is a specialized entry point to a specific market or
industry niche, subject area, or interest. They provide access to a variety of information
and services about a particular area of interest.

These are web portals which focus only on one specific industry, domain or vertical. Vertical
portals provide tools, information, articles, research and statistics on the specific industry or
vertical. As the web has become a standard tool for business.
Example:
“http://www.wine.com” is a vertical portal. Such portals offer information and services
customized for the niche audience.
Some vertical portals are known as "vertical information portals" (VIPs). VIPs provide news,
editorial content, digital publications, and E-Commerce capabilities. In contrast to traditional
vertical portals, VIPs also provide dynamic multimedia applications including social networking,
video posting, and blogging.

(2) Horizontal portal:

A horizontal portal is used as a platform to several companies in the same economic sector
or to the same type of manufacturers or distributors.

These are web portals which focus on a wide array of interests and topics. They focus on general
audience and try to present something for everybody. Horizontal portals try act as an entry point
of a web surfer into the internet, providing content on the topic of interest and guiding towards
the right directions to fetch more related resources and information. Classic examples of
horizontal portals are yahoo.com, msn.com etc which provide visitors with information and on a
wide area of topics.

They are often referred to as “mega portals”, target the entire internet community. Sites
like
“http://www.yahoo.com”
“http://www.netscape.com”

These sites always contain search engines and provide the ability for a user to
personalize the page by offering various channels(i.e.) access to the other information
such as regional weather, stock quotes, or news updates. The Providers of mega portals
hope the individual users to go their sites first, so as to access the rest of the internet.
Their financial models are built on a combination of advertising and/or “click-through”
revenues.