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Second draft

  1. 1. A CASE STUDY using An online second hand bookseller
  2. 2. A PINEAPPLE TEAM Presentation by Jocelyn Peucker Josh Atlee Robin Hansen Vivien Rayner Net205 Curtin University of Technology July 2010
  3. 3. Discover –  a journey from Bricks and Mortar to Search Engines – a timeline  how Internet Commerce works today  the power of the Network  some Fundamentals of online Commerce  an Introduction to the Knowledge Economy  what the Attention Economy means
  4. 4. A Journey … from Bricks and Mortar to Search Engines – a timeline
  5. 5. Lots of books! The average second-hand bookstore has 1 between 9,000 and 2 80,000 books. Customers came from the local area to buy them.
  6. 6. Except … In the 1990s they started coming in less and less and less.
  7. 7. Why? Because they found a better way to shop. ONLINE! Internet Commerce changed the way people buy and sell.
  8. 8. Not long ago … Sherar‟s started a bookstore in the early 1990s.3 They were passionate about books and providing great service. But … use of the internet was growi ng
  9. 9. Products and hits! Books became PRODUCTS Booksellers were VENDORS Customers turned into PAGE HITS The value and experience of customers began to “dry up.” 3
  10. 10. The Network Economy “Life is becoming more and more commodified … communication … and commerce are becoming indistinguishable.” 4
  11. 11. So… in the year 2000, Biblio launched an online database to find and compare prices of second hand books. This was “famous for several years as the fastest „metasearch‟ site for books.” 5
  12. 12. Three years later …
  13. 13. Online market places … such as Amazon and EBay were becoming household names. Realising that there was a market need for buying used books, the Sherars gave up their work on the search database and in 2003, developed a marketplace –
  14. 14. Expansion Over the next five years, they grew – expanding their networks both on the Internet and through offline communities. The librarian in Sopachuy, Bolivia, shows off some of her books. Image from Biblio website –
  15. 15. 6000 5000 4000 3000 2000 1000 0 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Number of Independent Booksellers with Inventory on Biblio
  16. 16. Biblio Database Items Listed (millions) 50 45 40 35 30 25 20 15 10 5 0
  17. 17. A timeline – bricks & mortar to search engines
  18. 18. … Our case study, is a unique example of how the owner of a traditional store developed an online marketplace for used books. This market place has become one of the most successful Internet Commerce businesses.
  19. 19. What is Internet Commerce? Internet Commerce “is a very broad area which is entwined with the Knowledge Economy”, 6 along with the Network and Attention Economies. This is where you find experience, education and skills all come together to create the fundamentals behind e-commerce. 6 The fundamentals of e-commerce is all about looking after the customer‟s online experience and making it user friendly. 6
  20. 20. A Broker is wholly an e-commerce business with intangible items. However … Its sellers stock tangible items. Its buyers receive the tangible items. can be classed as the „broker‟ between its sellers and the buyers.
  21. 21. Some fundamentals of this e-commerce business include … is one of the world‟s largest online search engines for finding used, rare and out- of-print books.6 This caters to online sellers and customers. continually adapted the business to suit customers and sellers online needs.6
  22. 22. Shopping online makes shopping experience safe by providing PayPal payment options, which covers their customers if a product is not delivered. provides E-mail, phone and online live-chat options.
  23. 23. Sellers … are required to detail their online books for sale, to ensure that customers know what they are buying. 8 For more information on book conditions and details click here.
  24. 24. Transparency This is a point of differentiation between Biblio and Amazon (along with other companies), where are “... maintaining transparency in the transactional process, so the customer knows who is really selling them the book they are interested in.” 8
  25. 25. No mark up does not „mark up‟ the price of their seller‟s listed books. 9 Pricing is very important to both the seller and the buyer. If prices are too high, the online stock will not sell. For more information on e-commerce fundamentals click here.
  26. 26. Pricing Unfortunately for the buyer, “... there is no set pricing structure for selling books online. Therefore, economic competitiveness plays a huge part between competing online vendors through companies such as AbeBooks, Amazon, Biblio, Seekbooks, in setting book prices”.1 Read how the pricing works by clicking here.
  27. 27. Earlier we mentioned that can be classed as a „broker‟ between the buyer and seller. To be successful as a broker, businesses such as this one, survive by being part of a network. This is also called the „Network Economy‟.
  28. 28. What is the Network Economy?
  29. 29. Stop! Grab a Cuppa (Milo, coffee, tea, whatever your heart desires). We‟re about to get deep into the economies of Internet Commerce.
  30. 30. Networks …
  31. 31. The hard stuff Networks are powerful. Many successful businesses rely on networks to further their business, increase profit and more. made use of their networks. How did this affect them?
  32. 32. First … they began by “Forming relationships the old fashioned way”, and recruited other booksellers.3
  33. 33. They realised how more networking could help them 2005 2008 2003 – 2009 Enhance online book Agreement with Affiliated with data via Agreement with Bibliopolis to offer Thousands of “MUZE” (provide book affiliates free inventory independent cover images, synopses, management software Booksellers reviews etc) 2005 WorldCat Database – 2005 Worlds largest Outsourcing agreement DB of books with LinkConnector to held in libraries manage affiliate program and marketing 2005 Agreement with Australian 2005 Company Independent Online To provide Booksellers Assoc 2006 2006 Outsourcing agreement Agreement with UK 2005 with Intrapromote. SEO company Biblion to Launch Textbook company to improve affilate with UK warehouse with ranking and drive traffic booksellers Textbook vendors to site. 1., 2003 - 2009
  34. 34. Plus … during its time of beta-testing, offered free service to sellers willing to help with the testing phase.12 This aided them with the radical knowledge creation. These sellers then became part of Biblio‟s network.
  35. 35. Millions of books … Canada Biblio book U Europe search - USA K BiblioQuest book search – Australia & By June 2003, Biblio had signed up 350 NZ Booksellers with 2 million books.2
  36. 36. Within the next five years … Up to 2008, Biblio had “an inventory of about 50 million titles from a network of 5,500 independent booksellers.” 11 Image from Biblio website –
  37. 37. Geography “With traditional constraints of geography and scale being eliminated, it is niche content that accounts for a rapidly growing proportion of total online sales, meaning that „popularity no longer has a monopoly on profitability.”13 From this we can all see Biblio is not running on popularity, but they are giving a niche service to the consumer market which makes them stand out as being different in the e-commerce world.
  38. 38. Biblio connects many businesses to its database “We take pride in bringing together over 5500 professional, independent booksellers from around the world.”14 These booksellers create part of Biblio‟s network.
  39. 39. Biblio is … “… an economy with heightened levels of connectedness and relationships that are mutually beneficial to sellers and customers alike”.15 For more details about the Network economy, click here.
  40. 40. Using the concepts of the Network Economy, entwined with the Attention Economy, – as we have seen – continued to encourage their own growth.
  41. 41. The Attention Economy With millions of web sites and businesses competing for a limited market, how did any of them make money and continue to do so? How do sellers and buyers connect – is it just by chance?16
  42. 42. Perhaps in some cases yes But more likely by a carefully constructed network of strategically placed ads, links and offers „too good to pass by‟ which gain our attention – a commodity now more valuable than information.17
  43. 43. A lonely place? David Gauntlett states that “… without attention, on the Web, you‟re nothing.” 18
  44. 44. Biblio grabs the attention from multiple buyers and sellers in a variety of ways.
  45. 45. Some of these include: 19 • Biblio offers free bookmarks for friends, family, relatives and more. • They “... rely on fellow book lovers and book sellers in telling their friends or family ...” about and what they‟re trying to do. • They promote their buyers to visit local bookstores, and of course, tell them about Biblio. • They provide an assortment of banners and links that can be placed on anyone‟s website, not just booksellers.
  46. 46. If business like, which relies on commissions through sales to earn money, did not get attention through their networks, then it is quite likely that their business would not have been successful. Thus, has made an impressive use of their Network and Attention economies for profit. Much of this success, was actually through the Knowledge Economy. For more information on the Attention Economy click here. Image from Biblio website –
  47. 47. As stated before, there is one more economy type that both of the previous economies rely on. So let us now begin a journey through the … Knowledge Economy
  48. 48. Assets … that cannot be touched or are not solid are intangible.‟s database of used books, along with databases such as: Amazon, EBay, iTunes, Facebook, are all intermediaries for Internet Commerce between the buyer and the seller.
  49. 49. Flew states that Knowledge “... is one where ideas and intangible assets rather than tangible physical assets are increasingly the central sources of new wealth creation ...” 20
  50. 50. For example, we cannot walk into‟s online database, and we cannot physically hold the cash and buy an item. This system of commerce is becoming more popular as it shares with the concept of globalisation.
  51. 51. Radical – Business concepts can be tested through existing customers and sellers to improve services for all. Explicit – that which is written, seen and can be Knowledge Tacit – learned from life taught experience Incremental – applied knowledge, used to adapt to a situation, which is a fundamental basic for an online business today
  52. 52. How do these types of Knowledge fit with
  53. 53. Radical – Adapted the business to suit their customers and sellers needs3 During its time of beta- testing, offered free service to sellers willing to help with the testing phase, who then then became part of Biblio‟s network. 12 Tacit – Creating the Explicit – Forming online presence relationships the Listening to old fashioned way. professionals and Reviewing research Biblio’s customers feedback reports to learn how to increase Knowledge Gained trust and respect from their networking. customers and booksellers Incremental – Continually shaped their learning experience Recruited other booksellers (growing)
  54. 54. Knowledge Economy … is the ability to manage and diffuse knowledge, which are very important factors when companies are competing with each other. 21 This is also known as a shift in the economy, which is referred to as an economic transition (Flew, 2008). Knowledge economy does not only refer to technology. 21
  55. 55. So to sum up … For Biblio, Internet Commerce is more than just buying and selling an item online. It involves vast networking skills. It involves gaining the interest of an audience and keeping it long enough for them to react in a positive manner. They need to be versatile and creative with newly acquired knowledge.
  56. 56. Fundamental basics Internet commerce encapsulates much more than just offering things for sale online. A successful business must also understand and harness the many facets of the internet economy – networks, knowledge and attention in order to build relationships, survive and grow.
  57. 57. Our Research If you would like to see more of our research, please explore the topics under „Research Articles‟ on the left sidebar of this website. And to summarise