Web E-Commerce
Ch. 1 Lecture Notes

Objective #1: Explain the term "electronic commerce" and the second wave of ecommerce growth.

  • Definition of electronic commerce: ???
  • Categories of electronic commerce
    • B2C
    • B2B - supply management, e-procurement, EFT (electronic funds transfer) & EDI (electronic data interchange)
    • other transactions, etc. that support selling & purchasing activities - hiring employees, training, logistics, manufacturing , advertising, communication, telecommuting, etc.
    • C2C? - eBay, swapagift, etc. This can be considered part of B2C.
    • see Figure 1-1 for relative size of these 3 categories
  • Second Wave of ecommerce growth
    • broadband
    • RFID
    • iTunes
    • Google
    • see Figure 1-4 on p. 13 for some differences between first and second waves.

Objective #2: Define various terms related to ecommerce.

  • ecommerce
  • B2C
  • B2B
  • C2C
  • Dot-Com Boom (i.e. Bubble) - 1997-2000, easy venture capital, technology means not mature and too expensive
  • Dot-Com Bust - 2000-2003 - copyright/intellectual property issues, online advertising didn't support business models

Objective #3: Explain various business models used in ecommerce.

  • How do businesses make money on the Internet?
  • How do individuals make money on the Internet?
  • revenue model - collection of business processes used to identify customers, market to those customers, & generate sales to those customers
  • other processes besides the 3 listed in the revenue model above include purchasing raw materials, converting materials & labor to finished goods, logistics, hiring & training employees, managing finances, etc.
  • Some of these business processes can be done more effectively with electronic commerce and some cannot. Electronic commerce can increase sales and decrease costs.
  • Advantages of ecommerce :
    • identify new suppliers
    • negotiate more effectively & competitively
    • quicker transactions, easier exchange of info especially digital goods
    • more choices for buyers, markets open 24 x 7
  • Disadvantages of ecommerce:
    • inability to present some goods over the Web (smell, fitting sizes, etc)
    • inability to get a critical mass of potential buyers (WebVan & HomeGrocer though some online grocers have been moderately successful including Peapod, Grocery Gateway in Toronto, Disco Virtual in Buenos Aires, Tesco in UK, FreshDirect in NY)
    • difficult to tie existing databases & transaction-processing software with the available online ecommerce packages

Objective #4: List and explain several notable failures in ecommerce.

  • Pets.com - low value-to-weight ratio for pet food
  • WebVan
  • Search for more.

Objective #5: Explain the growth of Amazon.com and its successful revenue model

  • books are easy to sell online
  • located in Seattle
  • wide distribution
  • no publisher controls supply of all books
  • customers review books at Amazon
  • customers are paid for referrals
  • Amazon developed successful online sales service that it sells to Toys R Us, Borders, CDNow, Target & other companies