Electronic Commerce Business Models - Overview

Objectives

At the end of this module, you will be able to

• Understand the various Electronic Commerce Business Models in existence today

• Review the websites of different business models

• Understand the concept behind these different business models

• Understand the role of Commerce Service Providers

  
  

Definition of Business Model

Description of the product, service and information flow Identifies potential benefits and sources of revenue from the various activities Work in conjunction with marketing strategy

A business model could be defined as a description of the product, services as well as the processes than flows between the various components. It primarily describes the potential benefits as well as the revenue sources from the business. However, a business model does not provide an understanding of how it will achieve a company's mission. This is primarily done through the marketing strategy of a company.

Electronic commerce can be used in all phases of a commerce transaction from marketing to product ordering to payment to product/service fulfillment. The diagram above shows a typical commerce transaction where buyers identify the need of a product or service and find the approriate seller who will then provide the required product or service. The product or service information will be determined and required at this stage for the buyer or seller to make informed decisions. Upon selection of the appropriate seller, negotiations on the terms or financial transactions will be performed upon which the fulfillment of the product or service will be made by the seller. Depending on the product or service, support may be required to be provided by the seller.