This document provides information about e-commerce models and examples of top retail websites. It discusses business-to-consumer (B2C) and business-to-business (B2B) e-commerce. For B2C, it outlines advantages like convenience and ability to adjust prices and inventory in real-time. It provides examples of top B2C sites like Amazon and eBay. For B2B, it describes how businesses purchase direct materials, indirect materials, and services electronically through methods like electronic data interchange. Mass customization is also discussed as a competitive advantage for B2C sites.

1. UNIVERSITY MALAYSIA SABAH
LABUAN INTERNATIONAL CAMPUS
UT 9082
PENGURUSAN TEKNOLOGI ICT
LECTURER: MISS. CHIN PEI YEE
SLOT: MONDAY (11AM-1PM)
PREPARED BY: LEE YOKE CHIN
MATRIX NUMBER: LA2006-2725

2. E-commerce is commerce, but it is commerce accelerated and enhanced by IT, in
particular the internet. It enables customer, consumer, and companies to form powerful
new relationships that would be the possible without the enabling technologies. But it’s
all still about commerce, people buying and selling products and services from and to
each other. The Internet facilitates commerce by its awesome ability to move digital
information at low cost. There are two most prominent for e-commerce, business to
consumer (B2C) and business to business (B2B).
Business to Consumer E-Commerce
The advantage of B2C e-commerce is shopping can be faster and more
convenient. The term e-tailer has come to be use to describe an Internet retail site. E-
talier are further divided into pure plays and clicks-and-mortar sites. Pure Plays are
Internet retailer such as Amazon.com that have no physical stores. Clicks-and-mortar
retailers are like Nordstorm, which has born Internet presence and physical stores. They
can often has catalogs as well. Clicks-and-mortar retailers are also call “bricks-and-clicks”
as far as we know no one has invented a term to describe catalog retailer such as Land’s
End that have Internet presence but no physical stores. Compare the convenient of
shopping on the Internet to driving from one store to another. Compare the convenient
of shopping on the Internet to the shopping form catalogs, where it is time-consuming to
flip from catalog to catalog if you want to do products and prices comparisons. On the
Internet, not only can you go from site to site with the click of the mouse, but there
many sites that offer product and services comparisons for you as well.
One of the applications suggestion for m-commerce related to price comparisons.
M-commerce is the term used to describe e-commerce conducted over a wireless device
such as a cell phone or personal digital assistant (PDA). Let’s say you are in an
electronics store and you notice a CD players at what seems to be a good price. With e-
commerce, you will be able to find the price at other merchants for the same item simply
by using your wireless device. Internet-based services you search the Web will tell you
whether the price you see on the item in front of you is a good deal or not. It will be
similar to what you can do now sitting in front of your PC.

3. If the product you want to buy is a digital, such as software, music, and books, it
can be delivered immediately over the Internet. This, of course, represents a
tremendous advantage over both stores and catalogs retailer. Besides, Internet pure
play retailers do not kill trees make a catalogs.
Another advantages e-tailers have is that product offerings and prices can be
change instantaneously in response to consumer demand. One of the most difficult
aspect to managing a retail operation, particularly with high fashion goods, is to know
how much to order at the beginning of the selling season. You also need to have enough
information to reorder early if sales are better than expected and to reduce prices early if
sales are not up to your expectations.
Think about the advantages e-tailers have in managing this process. They can
obtain real-time information on how sales are going against expectations. More
important, they can adjust price immediately if sales are not going as well as expected.
In a way, it’s similar to the yield management systems of the airlines.
If a catalog retailer wants to reduce its price what does it have to do? Produce
more mountains of catalogs to mail to it’s customers. If a traditional retailer want to
advertise a sale, the expense and delay of newspaper advertising is the answer. E-tailers
not only can change prices across the board instantly, but, if they wish, can offer special
pricing to their best customers by using the personalization techniques.
In addition, calling centers can be integrated with the Web site. Interactive chat
lets you engage in real-time typed exchange of information between you and one or
more other people individuals over the Internet. If you choose to use the telephone, you
will need a second line on which the customer service representative can call you back or
a direct internet connection. Soon, you’ll be able to connect directly to customer service
representative using Internet telephony as long as your computer has a microphone and
speakers. Internet telephony is a combination of hardware and software that uses the

4. Internet as the medium for transmission of telephone call in place of the networks of
traditional telephone service providers.
Before long, speech recognition software will reach the point where the need for
call center representatives will be reduced, particularly for routine inquires. Speech
recognition is a branch computer science that lets computers identify spoken words. If
you’d like to see how a speech recognition service works in providing information service
to consumers. You’ll be connected with Tell Me, a service that can respond to your
spoken commands and provide information on a variety of topic: weather, stock quotes,
movies guides, and even driving direction.
When broadband telecommunications become widely available the buying
experience will be greatly enhanced. You’ll be able to purchase a full-length feature film,
for example, and have it downloaded in about 45 minutes. This will sure beat driving to
Blockbuster and waiting in the line. The inventory of available firms will not be limited to
what a video store is able to stocks on its shelves. You’ll be able to choose any film that
has ever been made and it will always be available.
Travel sites will offer full-motion video tours of vacation destination that will let
you get a better appreciation of what that beachfront resort in Costa Rica will really be
like before you book accommodations at it. Automobile buying sites will be able to offer
virtual test drives to let you narrow down your choices before you take the time to visit
an auto dealership. Think of what will be possible with virtual reality. You will indeed be
able to experience “Costa Rica” without spending as much time and money as to actually
go there!
As we’re alluded to, end consumer are often interested in customizing their
purchases. In the B2C e-commerce model this is the concept of mass customization is
the ability of an organization to give it customers the opportunity to tailor it product and
services to the customer specializations. Customization can be appropriate and is a key
competitive advantage regardless of customer value perception. For example, Dell
computer (www.dell.com) is well regarded in its market for being the best at allowing

5. consumer to customize a computer purchase. Music site now allow you to pick the song
you want instead of an entire CD. Clothing sites allow you to select from among various
styles, colors, and size of clothing it fit your needs. In a B2C environment, you’re
potentially dealing with millions of different customization.
Examples of top-rated retail websites.
Amazon.com www.amazon.com
Amazon.com is the exception to the rules that consumers prefer to shop “real world”
retailers online. The mother of all shopping sites, Amazon features a vast selection of
books, videos, DVDs, CDs, toys, kitchen items, electronics, and even home and garden
goods sold to millions of customers.
eBay www.ebay.com
The fabled auction site operates the world’s biggest electronic flea market, with
everything from antique, computers and coins to Pez dispensers and baseball cards. This
site boasts billions of page views per month, and millions of items for sales in thousands
of categories supported by thousands of special-interest groups.
Eddie Bauer www.eddiebauer.com
Sportswear titan Eddie Bauer has integrated its retail channels-store, website, and
catalog-a policy other merchants should follow.
Lands’ End www.landend.com
With several seasons as an online retailer, Lands’ End is a pro at meeting shoppers’
expectations. One of the best features: Specialty Shoppers. A customer service rep will
help you make your selections and answer questions by phone or via a live chat.
Business to Business (B2B) E-Commerce
B2B occurs when a business sells products and services to customers who are
primarily other business. In the B2B space, the most attention has traditionally been
given to the ways that e-commerce could stream-line the purchasing of materials. This
does not mean that e-commerce application such as in sales, transportation, and
payment are not important and growing areas, it simply means that attention has been
devoted to purchasing because this is where the most money is being spent purchasing
application are usually divided three segments which are purchasing of direct materials,
indirect materials (MRO), and services.

6. Direct materials are the materials used in production in a manufacturing company
or are placed on the shelf for sale in retail environment. It relate directly to a company’s
primary business activities. Quality, quantity, and delivery timing are important.
Electronic data interchange (EDI) is the direct computer to computer transfer of
transaction information contained in standard business document such as invoices and
purchase order in a standard format. EDI replaces paper document with digital records
exchanged between trading partners’ computers. Although EDI can be and it used the
support the purchase of direct materials.
While there are other ways to exchange digital information between businesses,
EDI practitioners say that if it doesn’t meet the three criteria above it is not EDI.
Computer to computer exchange means just that. It must travel from one company’s
system to another over a telecommunication network of some sort, be it a private
network, a VAN or the internet. Computer to a fax machine does not count. Standard
business documents means that EDI is restricted o standard business forms such as
purchase order, purchase releases, advance shipping notices, invoices and the like, and
not free-form business correspondence such as business letters. Standard format means
that trading partners have agreed that the digital information exchanged will be in a
standard format so that the computer system at either computer can interpret what is
being transmitted and use it for further processing without human intervention.
Corporate purchasing department not to want to be bothered without paperwork
required to process purchased order for MRO materials, but at the same time, they do
not want to let MRO purchases go completed uncontrolled. While the amount on
individual MRO purchase orders are small, collectively they can add up. To deal with this
problem many purchasing departments negotiate with MRO providers for discount prices
on a range of items. What use to be done is that the MRO supplier would print a custom
catalog for the company showing the item that could be ordered and insert a price sheet
showing the price. If an administrative assistant needed to order suppliers, he or she
would find the item in the catalog, call the MRO supplier, and the item would be
delivered the next day. E-commerce solution for MRO do about what you would expect

7. them to do. The paper catalog is replaced by an electronic catalog available through a
web browser on the PCs located on desktops throughout the corporation. Powerful
search engines located the item needed and they are orders using shopping cart
technologies similar to the typical B2C retailer, sent to the MRO supplier electronically,
and deliver to the desktop the next morning. Many of the same advantages with the
retailing are present here a well: Ordering can be faster and more convenient, offerings
and prices can be changed instantaneously, call centers can be integrated with the Web
site and broadband technologies can enhance the buying experience.
B2B marketplaces seem to be a natural for the Web. B2B marketplaces are
internet-based services which bring together sellers and buyers. They have the potential
to bring together large numbers of buyers and sellers. Transaction cost can be reduced,
resulting in potential savings for the both buyers and sellers. The operator of the
marketplace often has software that facilities matching buyers and sellers and helps
them with the transaction. For example, one commonly used technique is to have the
marketplace conduct a reserve auction. Reserve auction is the process in which a buyers
post its interest in buying a certain quantity of item, and seller compete for the business
by summiting successively lowers bids until there is only one seller left. Marketplace
usually make the money by changing a transaction fee for their services.
The 4 categories of B2B marketplaces are MRO Hubs facilities the sourcing of
MRO materials without focusing on one particular industry. Yield managers create spot
markets for operating resources such as manufacturing capacity, labor and advertising.
For example, if a radio station has some unsold advertising time slots it could post them
on a yield management Web site and sell them to the highest bidder. In a way, it is
similar to what airlines do with unsold airlines seats at the last minute. Online exchanges
make it easy for purchasing manager to purchase commodities or near-commodities
needed for production when demand peaks all of a sudden or a traditional source of
supply is disrupted. The marketplace makes it easy for buyers and sellers to conduct
transaction without the need for negotiating contracts or establishing loner term
relationships. Catalog hubs are like MRO hubs except that they are industry specific. B2B
marketplaces are still evolving. We expect that Digital Darwinism will be at work here as

8. well, and not all of them will succeed. They seem to hold the most promise in the MRO
space inasmuch as relationships are often not as important here. The risks of doing
business with a new supplier are lower. Working with a new direct materials supplier
present risks of shutting down an assembly line because of late delivery or quality
problems. In addition, you have to remember that the legacy EDI systems of many large
companies are the way that the supply chain is managed, and these systems, while
complicated to set up, are working well. Finally, many suppliers will try to avoid letting
anyone get between them and their customers.
As a supplier to other businesses, you also need to understand whether you are
selling in a horizontal or vertical e-marketplace. An electronic marketplace (e-
marketplace) is an interactive business providing a central market space where multiple
buyers and suppliers can engage in e-commerce and /or other e-commerce business
activities. E-marketplace feature a variety of implementations including value-added
network providers, horizontal e-marketplaces and vertical e-marketplaces. A horizontal e-
marketplaces is an e-marketplace that connects buyers and sellers across many
industries, primarily for MRO materials commerce. Again, MRO materials include a broad
of range of both products and services including office supplies, travel, shipping, and
some financial services. A vertical e-marketplace is an e-marketplace that connects
buyers and sellers in a given industries. Covisint (www.covisint.com) is a good example.
Covisint provides a B2B marketplace in the automotive industry where buyers and sellers
specific to that industry conduct commerce in products and services, share mission-
critical information for the development of products and parts, collaborate on a new
ideas, and deploy infrastructure applications that enable the seamless communication to
each other’s proprietary IT systems.
References

9. Haag, S. & Cummings, M. Information Systems Essentials. International Edition.
McGraw-hill Irwin.
Haag, S. & Cummings, M. (2002). Management Information Systems for the Information
Age. Third Edition. McGraw-hill Irwin.
Laudon, K. C. (2002). Management Information Systems. Seventh Edition. Prentice Hall.
O’Brien, J. A. & Marakas, G. M. (2006). Management Information Systems. Seventh
Edition. McGraw-hill Irwin.
.