The document discusses various business models and revenue models for e-commerce. It describes common e-business models like the storefront model, auction model, portal model, and dynamic pricing models. It also outlines several revenue models including advertising, affiliate marketing, licensing, subscriptions, transaction fees, and sales. Finally, it examines how the internet impacts industry value chains by increasing efficiencies and enabling new participants like independent market operators and service providers.

1. Business models,
Revenue models,
Value chain

2. Business models

3. What Is an e-Business Model?
• The e-Business model, like any business
model, describes
– how a company functions;
– how it provides a product or service,
– how it generates revenue, and
– how it will create and adapt to new markets and
technologies.

4. Business Logic Triangle

5. Components of Ebusiness models
Business Model
• Customer Value
• Scope
• Price
• Resources
• Capabilities
• Implementation
s
Internet Performance
Environment

6. Storefront Model
• The storefront combines transaction processing,
security, online payment and information storage
to enable merchants to sell their products on the
Web.
• This is a basic form of e-commerce where the
buyer and the seller interact directly.
• To conduct storefront e-commerce, merchants
need to organize an online catalogue of products,
take orders through their Web sites, accept
payments in a secure environment, send
merchandise to customers and manage customer
data

7. Storefront Model
• Some of the most successful e-businesses
are using the storefront model.
• Many of the leading storefront model
companies are B2C companies
• Companies use a shopping cart and
supporting technologies to offer their products
and services to customers

8. Shopping Cart Technology
• This order processing technology allows customers
to accumulate items they wish to buy as they
continue to shop.
• Supporting the shopping cart is a product catalogue,
which is hosted on the merchant server in the form
of a database
• Databases also store customer information, such as
names, addresses, credit-card information and past
purchases

9. Auction Model
• Auction sites act as forums through which Internet
users can log-on and assume the role of either
bidder or seller.
• As a seller, you are able to post an item you wish to
sell, the minimum price you require to sell your item
and a deadline to close the auction.
• Some sites allow you to add features, such as a
photograph or a description of the item’s condition.

10. Auction Model
• As a bidder, you may search the site for availability
of the item you are seeking, view the current bidding
activity and place a bid (bids are usually in
designated increments).
• Some sites allow you to submit a maximum bidding
price and will continue bidding for you.

11. Portal Model
• Portal sites give visitors the chance to find almost
everything they are looking for in one place.
• They often offer news, sports and weather, as well
as the ability to search the Web.
• Search engines are horizontal portals, or portals that
aggregate information on a broad range of topics.
• Other portals are more specific, offering a great deal
of information pertaining to a single area of interest
these are called vertical portals.

12. Dynamic Pricing Model
• The web has changed the way business is done and
the way products are priced.
• In the past, bargain hunters had to search out deals
by visiting numerous local retailers and wholesalers.
Today it just few click away.

13. Name Your Price Model
• The name your price model empowers customers by
allowing them to choose their price for products and
services.
• Many of the businesses that offer this services have
formed partnerships with leaders of industries such
as travel, lending and retail.
• These industry leaders receive the customer’s
desired price from the intermediary and decide
whether or not to sell the product or service.
• If the customer price is not reasonable then that
customer can ask for another price.

14. Comparison Pricing Model
• It allows the customer to poll a variety of merchants
and find a desired product or service at the lowest
price.
• These sites gets their revenue from the partnerships
with particular merchants.
• www.Bottomdollar.com

15. Demand Sensitive Pricing Model
• The more people who buy a product in a single
purchase, the lower the cost-per-person becomes.
• Selling products individually can be expensive
because the vendor must price a product so that it
covers selling and overhead cost while still
generating a profit.
• When customers buy in bulk, the cost is shared and
the profit margin is increased.
• www.mer-cata.com
• www.mobshop.com

16. Bartering Model
• Offering one item in exchange for another.
– www.ubarter.com
• The seller makes an initial offer with the intention of
bartering to reach a final agreement with the buyer.
– www.isolve.com

17. Rebate Model
• EDLP
• eBates is a shopping site where customers receive
a rebate on every purchase.
• eBates have formed partnership with wholesalers
and retailers who will offer discount.

18. Offering Free Products and Service
• They offer their products for free on the web.
• Many of these sites also form partnership with
companies to exchange products and services for
advertisement space and vice versa.
• www.hsx.com

19. Cisco business model

20. Dell business model

21. Revenue models

22. Revenue Models
• In business, revenue typically consists of the total
amount of money received by the company for
goods sold or services provided during a certain
time period.
• Therefore, revenue models are a part of the
business model.

23. Revenue Models
• Many online companies generate revenues
from multiple income streams such as
– advertising,
– subscription,
– affiliate marketing etc.
– Online models not only sell goods or services
• also contacts (e.g. banner)
• information (e.g. user-data)

24. Revenue Models
• The type of revenue model you choose will
depend on the type of product or service you
intend to sell.

25. Two types of products you can sell
• products you make, which you should
sell at a higher price than they cost to
make
• products you buy, which you should sell
at a higher price than you paid for them

26. Advertising Revenue Model
• Fees are generated from advertisers in exchange for
advertisements, which is ultimately the classic
principal among the revenue models besides sales

27. Affiliate Revenue Model
• In exchange for bringing business to your
affiliates, you receive a commission, or a
percentage of the sales they make on that
business.

28. Licensing Revenue Model
• Assume you have created a product.
Companies would pay you a licensing fee for
the right to market, copy, or use the product.
• Licensing is the granting of permission to use
intellectual property, such as music, photos,
software programs, and inventions

29. Subscription Revenue Model
• Users are charged a periodic (daily, monthly or
annual) fee to subscribe to a service.
• Many sites combine free content with premium
membership

30. Transaction Fee Revenue Model
• A company receives commissions based on volume
for enabling or executing transactions
• The revenue is generated through transaction fees
by the customer paying a fee for a transaction to the
operator of a platform.
• The company is a market place operator providing
the customer with a platform to place his
transactions.
• During this process the customer may be presented
as a buyer as well as a seller.

31. Sales Revenue Model
• Wholesalers and retailers of goods and services sell
their products online.
• The main benefits for the customer are the
convenience, time savings, fast information etc.
• The prices are often more competitive.
• In terms of online sales there are different models
such as market places as common entry points for
various products from multiple vendors

32. Industry Value
Chains

33. Industry Value Chains
• Set of activities performed by suppliers,
manufacturers, transporters, distributors, and
retailers that transform raw inputs into final products
and services
• Internet reduces cost of information and other
transactional costs
• Leads to greater operational efficiencies, lowering
cost, prices, adding value for customers

34. Ecommerce and Industry Value
Chains

35. Firm Value Chains
• Activities that a firm engages in to create final
products from raw inputs
• Effect of Internet:
– Increases operational efficiency
– Enables product differentiation
– Enables precise coordination of steps in chain

36. Internet-Enabled Value Web

37. Raw
material
producer
Manufacturer
Distributor
Retailer
Consumer
Exchange
C2B
B2C
B2C C2CNew
Middleman
• Independent
market
operators
Service Providers:
• Logistics
• Financial
Business Models Based on the Value Chain in the
Market Place