• What is a business model?

• Describe the business model’s properties.

• Describe a revenue model and a value proposition.
How are they related?
• Describe the following business models:
o direct marketing,
o tendering system, and
o electronic exchanges - vertical marketplaces
o electronic exchanges - One-stop Shop
Chapter 2
E-Commerce:
Mechanisms, Platforms, and Tools
 Learning Objectives
1. Describe the major electronic commerce (EC) activities and processes and
the mechanisms that support them.
2. Define e-marketplaces and list their components.
3. List the major types of e-marketplaces and describe their features.
4. Describe electronic catalogs, search engines, and shopping carts.
5. Describe the major types of auctions and list their characteristics.
6. Discuss the benefits and limitations of e-auctions.
7. Describe bartering and negotiating online.
8. Describe virtual communities.
9. Describe social networks as EC mechanisms.
10. Describe the emerging technologies of augmented reality and
crowdsourcing.
11. Describe Web 3.0 and define Web 4.0 and Web 5.0.
 Electronic Commerce
Mechanisms: An Overview
• EC Activities and Support Mechanisms
• The Online Purchasing Process
o e-catalogs at fixed prices
o dynamic pricing (auction)
o Process
• Login (registering)
• E-catalog (search)
c e
• compare prices
l a
• shopping cart t p
ke
• checkout page
a r
• payment option
- m
• submits e
marketplace Vs marketspace
 ty
ri
cu
se

Figure 2.1 The EC activities–mechanism connection

 E-Marketplaces
• *E-Marketplace
o e-market, virtual market
o an electronic space where sellers and buyers
meet and conduct different types of
transactions
 E-Marketplaces
• *E-Marketplace
o functions:
• enabling transactions to occur by providing a meeting place for
buyers and sellers;
• enabling the flow of relevant information;
• providing services associated with market transactions, such as
payments and escrow; and
• providing auxiliary services such as legal, auditing, and security
o More efficient
• providing more updated information and various support
services,
 E-Marketplaces
• *E-Marketplace
o changed several of the processes
o driven by technology
• Lower search time for information and cost to buyers
• Reduced information misunderstanding between sellers and
buyers
• Possible reduction in the time gap between purchase and
possession of physical products purchased online (especially
if the product can be digitized)
• The ability of market participants to be in different locations
while trading online
• The ability to conduct transactions at any time (24/7) from
any place
 E-Marketplaces
• Components of and the Participants in
E-Marketplaces
o Customers - Internet users worldwide - social customers
o Sellers – webstores – private/public
o Products and services - marketplace Vs marketspace
o Infrastructure – networks, databases, hardware, software
o *Front end - seller’s portal, e-catalogs, a shopping cart, a search
engine, an auction engine, a payment gateway, and more
o * Back end - activities that are related to order aggregation and
fulfillment,
o * Intermediaries
 E-Marketplaces
• Intermediary:
o a third party that operates between sellers and buyers.
o electronic (online) intermediaries Vs regular
intermediaries
• manage the online markets.
• match buyers and sellers
• provide escrow services,
• help in complete transactions.
 E-Marketplaces
• *Disintermediation and Reintermediation
o types of services:
• they provide relevant information about demand: supply,
prices, and trading requirements; - automated -
disintermediation
• they help match sellers and buyers; - automated -
disintermediation
• they offer value-added services such as transfer of
products, escrow, payment arrangements, consulting, or
assistance in finding a business partner. - expertise
 E-Marketplaces
• Types of E-Marketplaces
o Private E-Marketplaces
• Starbucks.com, dell.com
• sell-side e-marketplace
o B2C, B2B, one-to-many
• buy-side e-marketplace
o many-to-one, B2B, walmart.com
o Public E-Marketplaces
• owned by a third party
• serve many sellers and many buyers