E-commerce Change the World

According to a survey done by Verdict Research on 15 January 2009, Amazon.com was the UK’s favorite music and video retailer, and came third in overall retail rankings. In the financial perspective (source from Yahoo Finance), amazon.com has increased its revenue by 28.86% and increased on its net income by 35.50% in 2008 and it maintained its position as the No.1 e-tailer in 2008.

Nowadays, e-commerce has become relatively popular and many companies have been thinking to be benefited from e-commerce. But how does Amazon.com gain more competitive advantage and stand the best above others?

Evidence generated from case studies and literature reviews have shown that the success of amazon.com is depends on four main factors: customer service, variety of product, easy navigation on its website, and the value position.

Customer Service
Amazon.com is proud of its customer services and desires to be the best customer centric company. A study shows that more than half of the Amazon.com’s customers are repeat customers. This success is based on customer value proposition, which is conducted by Bezos, founder of Amazon.com. He suggests that amazon.com must give a positive impression to its visitors, so that the potential buyers will visit the virtual store again. For example, a cookie file will be store in the users’ computer and next time, the users will be greeted with the words such as “Welcome back, Marcus Shopper”. After that, shoppers will proceed to recommend new book from the same genre by Amazon.com according to shoppers’ previous purchases. Besides, Bezos also mentioned that Amazon.com need to fulfill their promises such as on time delivery. As a result, Amazon.com can strengthen its customer relationship.

Variety of product
Initially, Amazon.com is an e-tailing pioneer selling books via an electronic catalog from its websites. In order to cope with changing environment and meet customer needs, Amazon.com has expanded its business from selling books to variety of products and services which include media, electronics, other merchandise, and other services.

Easy navigation
The homepage is a company’s first impression to customer and most important opportunity to serve the customer. Easy for use and navigate must start from the homepage to give customer convenience. Amazon.com’s homepage provides personalized product recommendations, e-mail notices, reliable payment system, and interactive support for all the customers.

Value position
Value is like a goal of the organization and plays an important role in Amazon.com’s success. There are 2 strong values that are practiced by Amazon.com. These include customer satisfaction and operational frugality (cost saving). The value of customer satisfaction can be referred back to the “customer service”. In the other hand, the operational frugality helps Amazon.com to save cost in order to spend huge money on branding and business expansion. For example, Amazon.com’s employees are paid based salaries that are obviously less than competitive rate. However, Amazon sustains employee loyalty through employees’ ownership of company shares and let employees benefit from the business success with their contribution.

It was perhaps the most surprising failures for the metal industry as they have investment backed from Bethlehem, Weirton, LTV, Steel Dynamics, and Ryerson Tull. MetalSite appeared to be successful even the Internet Capital Group also thought so and invested over $100 million in MetalSite.

The main cause of MetalSite’s failure was run out of cash. The costs of financing MetalSite’s technology and employees was impossible to justify, as a result, the firm actually burned over $200 million without generating any significant revenues. Secondly, MetalSite had numbers of backers who could commit product to their platforms which causes split ownership structures to exist. As an effect of the structures, quick decision making is inhibited. Besides, it also deterred non-equity participants from buying and selling over their platforms. Lastly, MetalSite held marketing campaigns which are costly to establish brand recognition which is actually a wrong decision which leads to its failure.

In a nut shell, firm must be good in financing the development of the websites so that it wouldn’t be suspended for the reason of lack of cash. On the other hand, the design of the websites is important to attract customers, this including the attractiveness of the features, ease of use and access and also convenience to view all kind of options. Brand recognition is equally important as having management with expertise to run the operations, e-commerce winners will have both well managed.

The followings links show some of the e-News on the MetalSite incident:

* Networking with Suppliers and Customers

* MetalSite: "It was overhyped by everybody"

* New owner brings MetalSite back online

Before I explain and describe on the history and evolution of E-Commerce, I would like to define E-Commerce first so that readers of this blog will understand what E-Commerce is actually all about. Electronic Commerce, commonly known as e-commerce, is the buying and selling of products or services over electronic systems such as the Internet and other computer networks.

Hello, my dearest readers nice to see you again. Today, I’m going to share one of the topics about e-commerce with you. As we know, revenue is the main objective in every business transaction so there is no exception for online activities as well. Hence, I would like to share the information about “Revenue model for Google, Amazon.com, and eBay” with you.

A revenue model is made up by five revenue models, which includes sales revenue model, transaction fee revenue model, advertising revenue model, subscription revenue model, and affiliate revenue model. Advertising is the main revenue model for Google which generates higher profits than other model. Google AdWords, Google AdSense, Google Answers and Froogle are included in the Google’s advertising revenue model.

Google AdWords is the pay per click advertising program of Google which is designed to allow the advertiser to present their advertisement to interested people that are trying to search for the relevant information which offers by the advertiser in the advertisements. An advertiser has to pay the fee to Google whenever there is a click on the advertisements in Google page.

Google AdSense is an ad serving program which allows the website owners to enroll the text, image and video advertisement which will be presented in their website. Revenue for these ads is generated by either on per-click or per-thousand-ads-displayed basis. I have provided a AdSense picture so that you will have a clearer picture.

Google Answers is a service provided by the researcher to answer users’ queries or questions. Then, the user will pay for the service. 25% of the service payment will be kept by Google, and the rest will be paid to Researchers.

Ebay is also providing online shopping but it does not have inventory like Amazon. It is an online auction and shopping website which allow business transaction to be performed in places around the world. Insertion fees, promotional fees, final value fees, and reservation fees model revenues are the revenue generated by Ebay.

Insertion fees are generated when an item is listed or showed in Ebay and this is non-refundable fee. Promotional fees are generated when additional listing options such as highlighted and bold listings are edited. While, final value fees is commission charged to the seller at the end of the auction. Lastly, reservation fees are charged when the product is not sold out.

Here are some of the useful links with is related with this topic:

i)Ebay no longer on google adword

ii)Google Adwords

iii)Google

iv)Amazon.com

v)Ebay