The world is at a point in time where reliance on technology has exceeded the imaginations of our predecessors. Gone are the days of door-to-door sales and outdated are the notions that must leave your home to shop. The expansion of the internet has greatly influenced the movement of business from brick-and-mortar storefronts to visually enhanced virtual marketplaces. The result of this movement has contributed to the growth of e-businesses and e-commerce. As well, it has allowed small businesses world wide to compete with large corporations (M.U.S.E., 2011). Online shopping has brought about convenience for shoppers in a variety of ways. Online stores never close, which means consumers can shop at any time. There’s also no waiting in check-out lines; no driving or parking hassles; no pushy salesclerks and best of all—no reason to get dressed! Because of the vast technology and applications available much of our online experience can be done hassle-free. We are able to compare products and prices, and we can generally contact a customer service representative 24/7 thanks to outsourced call centers. Many sites even offer tech support in the instance the site is not working properly. Additionally, shoppers can conduct their business over the web without concern for identity fraud as many sites have secure checkout features which encrypt users’ information to keep it safe. Anymore, it is unbelievable to have a company that doesn’t have some sort of online presence. The engagement of companies in e-commerce only strengthens their ability to profit. However, not unlike their brick-and-mortar counterpart, online businesses must adhere to some basic marketing strategies in order to be successful. For instance, just as physical locations must know their target market and design a product that meets that market’s needs, so must an online store. In fact, setting prices becomes even more crucial in online sales because they must be able to compete with thousands of other businesses. When you consider the price of shipping on top of product price it easily becomes an area that can chase consumers away. On the other hand, the placement of products is a little less concerning. In order to facilitate the best placement of your product, a website should include search features and categorized sections. A company can also work on placement while promoting. For instance, promotion on search engines, or social networking sites such as Facebook are excellent ways to attract attention to an online store (M.U.S.E., 2011). Overall, the goal of building a business presence online is to foster the relationship between a company and a consumer (M.U.S.E., 2011).
To better understand the ways in which e-businesses operate and generate profit, this presentation will analyze three companies that conduct business operations online. These companies will include E-bay, Listia, and Amazon. We will start by comparing the similarities of the companies and their websites. We will also look at the distinguishing characteristics of each company. This presentation will hone in on the approaches each company has used to make commerce convenient, hassle-free, and secure for consumers. Further we will investigate the maintenance of their security features, as this is a large contributor to online shopping. In closing this presentation we will have discovered the uniqueness of websites that encourage consumers to make purchases online and identified various approaches to conducting business online.
Based out of San Jose, California E-bay is the world’s leading e-commerce company with over 100 million active users spread across over 30 countries. This company is a virtual marketplace. People come to E-bay with an intent to sell or buy products, which they can browse through by searching for keywords or browsing through specific categories. Initially E-bay used a time-set auction style approach to doing business, however, the company currently has a variety of ways in which people can purchase products from one another. For instance, E-bay has implemented a buy-it-now feature which allows sellers to set an asking price without consumers having to wait for an auction to end. More power has been extended to the buyers as well with E-bay’s want-ads which provides buyers an opportunity to tell sellers what they want and how much they are willing to pay for it. In this avenue, sellers can decide if they wish to do business with the particular buyer (E-bay, n.d.).
If E-bay halted there, they probably would not have succeeded in becoming the most well-known e-business. Instead, E-bay also implemented several strategies to improve their success. They developed PayPal, which acts like a register or banking system to exchange money for the goods purchased online. Originally, PayPal was intended to be a tool for E-bays in which benefits applied to both the buyers and the sellers in the form of security, as well as satisfaction. For sellers, E-bay’s PayPal checkout option opened the doors for people to accept credit card transactions, create invoices, monitor inventory, and even accept foreign currency. For buyers, PayPal offered a third-party insurance option for bad business practices. It promises buyers to keep their identity safe. PayPal also gave buyers the ability to retrieve their money in the case that a seller did not ship an item, or shipped the wrong item. With these types of checks and balances, it is no wonder that E-bay has become such an overwhelming presence (E-bay, n.d.) However, E-bay has yet to put the brakes on. Everyday the company implements newer technology and features to make business easier and better. To encourage further growth, there’s no doubt that this company must have products being sold. To ensure sellers are eager to place items up for purchase E-bay goes the extra mile to provide those users with the tools and education necessary to post pictures and descriptions on a well formatted page. Even if a user is still boggled by the variety of features E-Bay has to offer, they can turn to E-bay’s tech support which is available 24/7 to offer guidance on just about any topic (E-bay, n.d.). Considering the importance of communication in any company, E-bay has also employed an internal e-mail system for its users to communicate with E-bay as well as other users. Just because E-bay does not want users to miss an e-mail the system notifies users through their registered e-mail addresses of the message awaiting them (E-Bay, n.d.). E-Bay further promotes these items for sellers by using a collection of data from buyers to make recommendations for products that are similar, or even an up-sell of the product. For the buyer that wasn’t sure about a particular product, E-bay has introduced comparison applications which allow users to see the differences between similar products. And if that’s not enough to encourage the buyer to make a purchase, E-bay allows that user to reflect upon their decision even more by keeping the product in their face with the recently-viewed-items bar which shows users some of the items they may have placed on their watch list, or may have spent an adequate amount of time viewing (E-Bay, n.d.).
While there’s still much that can be said about the 16 year old E-bay company, it’s time we moved on to some of the other companies in our presentation. Listia is much younger, having been founded in 2009. The company is based in Silicon Valley, California. While the company seems to take some lessons from E-bay, there are some areas in which the company varies greatly. Not unlike E-bay, Listia is a virtual marketplace where people with stuff try to get it to the people that want it. The deal is that these products come free of charge. However, that’s not entirely the truth. Listia established a credit system in which users can purchase credits of earn credits by listing auctions of their own. When people bid on someone’s auction, those credits are transferred to the listing person. For simplicity’s sake we will refer to the party that is listing as the “seller” and the bidding person as the “buyer” (Listia, n.d.) These credits can also be earned through completing certain requirements from sponsors. For instance, if you sign up for a NetFlix account, you can earn 3,500 credits. These credits are used to bid on the items you want. Although Listia promotes that products are free using this credit system, if you consider the price per credit (if you choose to buy the credits), the cost of the service with which you must sign up (if you choose to go with sponsor credits), or the cost of the item which you are going to list to earn credits, the truth is that there is some cost involved. However, these “costs” aside, you may very well win auctions with your credits and have absolutely no cash exchange. On the other hand, some sellers have shipping charges. It is generally up to the seller to determine how a buyer can pay shipping, but Listia recommends users use PayPal. Just as E-bay promotes the use of PayPal for secure transactions, Listia ensures a secure credit guarantee with their 100% Listia Assurance policy. This policy indicates that buyers can get a full refund of credits in the case that a seller failed on their part (Listia, n.d.).
Much like E-bay, Listia offers a ranking system for users. Buyers and sellers can generate feedback scores as well as a series of badges to help identify themselves as serious and active users. Users can become fans of other users, make comments on other users profiles, or auction listings, and “Like” users or their auctions. Many features offered by this site, just as E-bay, are in cohesion with the current social networking interactions. For instance, following the website on Facebook or Twitter, and connecting Flickr and Photobucket websites for ease of sharing images (Listia, n.d.). Listia also operates by formulating recommendations for users while allowing users to browse by keyword or category. You can also sort products by price, ending time, popularity and newly listed (Listia, n.d.). However, unlike E-bay there appears to be no application for comparing products. Most likely a big contributor to the site, and not unlike any other site you would find on the internet, Listia uses advertising to generate a source of income. However, most of the advertising is found at the very bottom of the page, unlike other sites which place advertisements along the sides or even at the top. I think this adds to the appeal of the site, as many banner-type advertisements tend to be distracting.
Moving right along, let’s take a look at Amazon. Amazon is based out of Seattle, Washington. The company originated in 1994, but did not hit the internet until 1995 along with its would-be greatest competitor—E-bay. However, Amazon first entered the virtual marketplace as a bookstore. This was a result of the flaw that most major brick and mortar bookstores suffered from: an inability to stock a large selection of books. Over the years, though, Amazon has grown to be the largest online retailer in the world servicing a growing number of countries with a variety of products (Amazon, n.d.). Like the other sites we have mentioned, Amazon follows suit in providing users with profiles to help identify themselves and generate profiling capabilities for the company. Users can be buyers or sellers. That is, while Amazon conducts sales of products for itself, it also provides users with the option of buying a new or used version of the product for less through transactions with other users. In this model, users can find a product for a price they are willing to pay that is not always the suggested retail value. After the transaction occurs and items have been received, the buyers can leave feedback for the sellers to help other buyers identify good dealers (Amazon, n.d.). Not straying from the approaches used by other e-commerce sites, Amazon is able to make recommendations to users based on searches. Users can search for products in the very same ways on Amazon that they can on other sites: keyword, category, price, location distance, condition of product, and much more. Amazon also allows users to compare products and leave reviews. They also encourage up sales to generate more revenue (Amazon, n.d.).
One thing to note before you decide to make a purchase through Amazon, though: PayPal is not an acceptable form of payment. E-bay offered up PayPal as a means to offer users a variety of payment options as well as a company credit card. While Amazon opts out of using PayPal, they have provided no less options. They even have an Amazon credit card! The companies use their personal credit card to offer rewards to shoppers who frequent their sites. Amazon benefits don’t stop there, either. Amazon offers discounts to students and moms for an annual membership fee, as well as daily deals for all users (Amazon, n.d.). Just as the previous sites, Amazon has it’s own 24/7 tech support department which can assist users with posting items for sale and dealing with common errors on the site. Amazon also sells advertising to other companies. While on their homepage, the advertising can be a bit overwhelming for new users, the preceding pages generally contain advertising to a banner just under the search box, which helps to keep the site clean (Amazon, n.d.).
As you can see, online sales have been narrowed down to a science. As more and more of the world is becoming familiar with the speed and convenience offered by the internet, businesses have only found more effective ways to generate sales. Of the many approaches we have seen employed in just the three sites discussed, some of my favorite, and considerably the most effective have been:User rankings—the feedback systems which enable users to rate sellers and buyers. This system helps buyers when making purchases from otherwise complete strangers. High ranks generally indicate a trustworthy salesperson. Buyers can also be relieved of some stress when their buyers have excellent reviews which demonstrate their seriousness in purchasing and paying for a product.Categorized/ Keyword searches—the breakdown of products which enables users to more easily find what they are looking for. This includes sorting by prices, locations, popularity, etc.Comparative shopping—allowing shoppers to compare similar items side-by-side, or at a glance.Reviews—the rating of products from people who have purchased and used them. This feature helps others to determine just how well a product will be for them as it sometimes has the ability to point out benefits and flaws of the product.Recommendations/ up sales—based on user searches, previously purchased/viewed items. Recommendations come in handy for the shopper who doesn’t always know what they are looking for while up sales are very helpful to the user that doesn’t remember to purchase the car charger that doesn’t come with the phone. Communication—between users and company is essential as it helps people to make special arrangements or other deals. An internal communication system allows users to ask questions about products directly from the seller.Rewards options—hosting a specialized credit cards with reward incentives, offering discounts and hosting regular deals is a great way to inspire shoppers to buy more. While there are an unlimited amount of options a company can take to make their site more effective, there is one thing that can truly ruin a site; and that is limited security. I have personally always felt comfortable making purchases on the sites we have discussed because they offer assurance that my information is safe. Regardless of which payment option I choose, there are codes in place to encrypt my data so that outside sources cannot hack into it. While many sites offer the use of PayPal which has earned the right to claim the title of superior online transaction safety, some don’t. However, they do offer safety in other ways. When companies fail to promote the safety of their consumer, they will certainly fail regardless of the quality or price of the products they offer.
MGM310-1104B-06 E-Business Phase 2 Individual Project Sabrina MergenthalerColorado Technical University Professor Shanese Pickett November 28, 2011
•Development of e-business/e-commerce •Shopping from home -Convenient -Hassel-free -Secure• Engagement of companies in e-commerce • Strategies to Success -Knowing the target market -Product -Price -Placement -Promotion •The goal of selling online
•Identifying three companies -E-bay -Listia -Amazon •Comparison of companies •Effective approaches •Security •Conclusion