Boo.com was an example of an E-Commerce failure.It was a British Internet company founded by Ernst Malmsten, Kajsa Leander and Patrik Hedelin. Boo.com launched in the Autumn of 1999 selling branded fashion apparel over the Internet; however, after spending $135 million of venture capital in just 18 month, which later was placed into receivership in 18 May 2000.
The causes of failure are timing and problem with the user experience. From the day it launched technology was a problem for the online clothes retailer. In fact, it was supposed to launch in May 1999 but technical hitches delayed the unveiling. The site was heavily relied on JavaScript and Flash technology, but as that time it was very slow to load the webpage. In this circumstance, it took vast majority users to wait minutes for the page to load. Another thing is the fixed size window required to display the complicated, which limited space available to display product information to customer.
Beside that, Boo.com to market itself as a global company and it had to deal different languages, pricing and tax structures in countries it served. Boo.com was spent £125 million in just six months because of these activities. The most important thing are their sales wasn’t up to their expectation, especially have a high numbers of customer returned products to them.
Electronic commerce, commonly known as e-commerce , consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown extraordinarily since the spread of the Internet.
The commercial-oriented sharing of electronic data among computers become achievable in the 1950s with the appear of geographically dispersed computers. However, highly specialized data formats were used, the software applications of a certain producer were not able to communicate with the applications of another producer. In other words, data exchange between the computers that were not running the same software application were hindered.
Electronic Fund Transfer (EFT) was the first expanded use of a form of electronic commerce appeared in the early 1970s. This enabled banks and financial institutions to transfer large amounts of money either among themselves or with associated businesses.
In the late 1970s Electronic Data Exchange (EDI) was introduced. EDI enables inter-company exchanges of documents, such as order forms for suppliers, invoices, customs forms, stock inventories etc. This has reduced costs both on the producers’ side and on the distributors’ side. Whereas, the high costs of its implementation and the difficulty of making the various versions of EDI fully compatible causes EDI not largely use in the market.
In the late 1980s electronic mail (e-mail) and groupware were widely use in the business world.The two systems were considered a major breakthrough when they first introduced.
When public allowed access to the internet in 1991 a significant change for e-commerce occurred. The internet provides several advantages over its competitors. First, this opened the possibility of accessing huge new markets for every business thinkable. Second, compatibility problems did not exist in the internet, the transfer control protocol / internet protocol (TCP/IP) is the generally accepted standard protocol.
The internet was quickly accepted in business once opened for commercial utilization, internet-related business prosper and the market itself expanded.Recently how to conduct sensible financial transactions on an open access network is the greatest challenge for those companies that run commercial activities through the internet.
The World Wide Web, which appear in the years when the internet was liberalized, rendered e-commerce more accessible and more affordable. The Web provides the internet its user-friendly interface. Ttherefore, the Web has profoundly changed the way the information on the internet organized, presented and accessed.
Instead, the information of the Web consists of a series of documents called web pages which are developed by using the Hypertext Markup language ( HTML). The main characteristic is that it allows the creation of hypertextual links within a web page which let users “jump” directly to another web page or some other information source.
In the early times of the Web, these pages were static documents that consisted only text and images. Currently the content had become more and more attractive. The HTML language lets users embed in the web page different types of “objects”, such as multimedia files, which could be video clips, animation, sound and music.
The Web is a more affordable means of conducting electronic commerce than the EDI. In addition, it enables a wide range of commercial activities.Taking advantages of the low costs involved, many small businesses are now able to compete with big corporations.
History of ecommerce is unthinkable without Amazon and Ebay which were among the first Internet companies to allow electronic transactions. Currently there are 5 largest and most famous worldwide Internet retailers: Amazon, Dell, Staples, Office Depot and Hewlett Packard. According to statistics, the most popular categories of products sold in the World Wide Web are music, books, computers, office supplies and other consumer electronics.
Nowadays, the internet which provide a way there are convenience and easy for those interest in running a business. E-Commerce, defined as the process of buying, selling or exchanging products, services and information via computer There are a few of companies run successfully through E-Commerce, which are Amazon, FedEx, Ford, eBay and so on. Among of them, the example that I want to highlight is eBay.
eBay
History ofeBay eBay headquarters is located at San Jose, California. It launched in September 1995, started as a place to trade collectibles and hard-to-find items. eBay also start meant as a global online marketplace where anyone can buy, sell and trade.
How did eBay get started selling over the Internet? It is the brainchild of Pierre Omidyar who working as a software developer in Silicon Valley. His wife who interested in her Pez collection becomes the key component that prompted him to do this. Since she was experiencing in related matters, she know it is limited by geographical considerations and also the interval between publications can often run several weeks if not months.
However, all of that was shortened down by used his interest in fragmented markets and efficient marketplaces as a laboratory for what eventually became eBay. He used the auction process as the method for establishing how merchandise is valued and eventually how it is exchanged between buyer and seller.
What does eBay offer online consumers? eBay is the world's largest online trading community which offered users an opportunity come together in one of the Internet site and be able to buy and trade a wide range of items. Sellers are permitted to list items for sale, meanwhile buyers can bid on items of interest and all eBay users to browse through listed items in a fully automated way. The items are arranged by topics, where each type of auction has its own category. By this, the users easily to find the information what they needed. eBay has both streamlined and globalized traditional person-to-person trading, which has traditionally been conducted through such formsas garage sales, collectibles shows, flea markets and more, with their web interface. This facilitates easy exploration for buyers and enables the sellers to immediately list an item for sale within minutes of registering. Since company started the service back in 1995, it has received great favor among the population.
What has helped to make eBay as successful as it has been? It allows people connect with some very fond and special early childhood memories. It could be anything from collecting baseball cards to toy soldiers to Barbie dolls to doll houses, and so forth. It allows people to make that connection and relive a lot of those very vivid and very fond memories that they have from an earlier period of time.
Another factor might be the people enjoy the experience of the shopping bazaar. They enjoy the hunt. They enjoy looking around for merchandise. The other component is that I believe they really enjoy the competition of the bidding process. From time to time, eBay hasgrown and become a very practical place to buy and sell collectibles or commodities.
What is revenue model? Revenue model is a way to generate revenues, like charging your customers or advertising. There are few types of revenue models which are:
sales: companies generate additional revenue from selling merchandise or services over their websites. For example: Wal-Mart sells a good online.
transaction fees: a company will receive the commission based on the volume of transaction made. However, there is usually a fixed fee per trade.
subscription fees: the customers will pay for a certain amount , usually monthly,to get some services. For example, AOL's access fee.
advertising fees: companies charge the others for advertising their products and services on their sites.
affiliate fees: companies receive the comissions by referring the customers to the other websites.
Google's Revenue Model Google offers targeted advertising solutions and global Internet search solutions. Advertising is the major revenue model that drives Google’s growth as a business-services company. It's revenue model include Google AdWords, Google AdSense and Froogle.
Google AdWords It isa Google’ssearch advertising program.AdWords ads appear on the right side (and sometimes at the top) of Google search pageswhich also called "sponsored links. With AdWords pay-per-click pricing, advertisers pay for their ad only when a Google user clicks on it. The AdWordsprogram offers a quick way to placeyour site on a search results page withoutnecessarily being in the Google index.
Google AdSense AdSense is a method of making money on your site. the advertisers enter into this program to enable text, image and video advertisements on their sites instead of using the Adwords. When a visitor clicks one, the AdSense publisher shares the cost-per-click ad revenue with Google. The ads are supplied by Google, and in fact are the same AdWords you see on Google search results pages.
Froogle Froogle is a service that consumers can search the information online about products and services. It also called" Google product Search". It is a price enginewebsite and is different from the other price engines neither charges any fees for listings, nor accepts payment for products to show up first. It also makes no commissiononsales.
Amazon.com's Revenue Model Amazon.com is the largest online retailer in the world, perhaps the best known as well. Nearly everyone has purchased something through Amazon, and their offerings cover almost every possible retail area including books, music, housewares, movies, toys and many more. The major revenue of Amazon comes from Amazon Maketplace and affiliate fees.
Amazon Marketplace Amazon Marketplace allows sellers to offer their goods by the Amazon's offerings . Consumers can buy the items sold directly by a third party through Amazon.com using Amazon Marketplace. This strategy is very profitable for Amazon.com.Also, it provides a means to find items for sale that are no longer in print, like certain books and CD’s that are no longer manufactured. The examples are: kelkoo.com, shopping.com and susale.com Affiliate Fees As the largest operating affiliate program, Amazon Associates attracts members with its huge variety of product offerings. So, it does not have to ship these used items to the affiliates in other countries. It also can boost sales at a very low cost by leveraging the thousands of affiliates they have all over the world.Today, it is among the largest and most successful online affiliate program, with over 1,000,000 members world-wide.Visitors to an Amazon affiliate site (a site that links to products for sale on Amazon) will fetch the site owner a 15 percent commission on every new item sold at a discounted price.
eBay's Revenue Model
Apart from Amazon.com, eBay is an online auction and shopping website in which people and businesses buy and sell goods and services, with more than 125 million internet users registered worldwide. The benefits provided by online trading are extensive as the consumers are and the opportunities to sell to or buy from a global market from the comfort of your home with the great flexibility in payment and transaction options.
eBay generates revenue from a number of fees. The eBay fee system is quite complex; there are fees to list a product and fees when the product sells, plus several optional fees, all based on various factors and scales. In addition, eBay now owns the PayPal payment system which an additional commission fee is charged. The vast majority of eBay’s revenue is for the listing and commission on completed sales. Advertising and other non-transaction net revenues represent a relatively small proportion of total net revenues and the strategy is that this should remain the case Advertising and other net revenues totalled $94.3 million in 2004 (just 3% of net revenue). These are some of the eBay’s revenue sources:
Fees to list an item: for regular auctions, fees is charged according to a starting price for vehicles, fees is charged according to a type of vehicles, for real estate, fees is charged according to the properties and listing type
Picture Service Fees: first picture is free, for the additional picture or bigger picture, fees will be charged.
Final value fees: for regular auction, fees will be charged when met the closing bid, for vehicles, charged when the first bid over the reserve price is placed For real estate, a fixed fee for land where there is successful high bid and no fees for other type of real estates.
Reservation Price Fees: charged only if item not sold, a function of reserve price.
Besides that, eBay has offered ‘eBay Revenue Model Tutorial’. With the help of tutorial Investors and analysts can maintain their own revenue model for eBay.
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