Typical EC Business Models

There are many types of EC business models. Examples and details of EC business models can be found throughout this text, in Rappa (2010). The following are five common models. The most obvious

EC model is that of selling products or services online. Sales may be from a manufacturer to a customer, eliminating intermediaries or physical stores (e.g., Dell), or from retailers to consumers, making distribution more efficient (e.g., Net-a-Porter, Walmart online). This model is especially efficient for digitizable products and services (those that can be delivered electronically). This model has several variations (see Chapters 3 and 4) and uses different mechanisms (e.g., auctions). It is practiced in B2C (where it is called e-tailing) and in some B2B types of EC.

2. Electronic tendering systems. Large organizational buyers usually make large-volume or large-value purchases through a tendering (bidding) system, also known as a reverse auction. Such tendering can be done online, saving time and money. Pioneered by General Electric Corp., e-tendering systems are gaining popularity. Indeed, many government agencies mandate that most of their procurement must be done through e-tendering.

3. Electronic marketplaces and exchanges. Electronic marketplaces existed in isolated applications for decades (e.g., stock and commodities exchanges). But as of 1996, hundreds of e-marketplaces (old and new) have introduced new methods and efficiencies to the trading process. If they are well organized and managed, e-marketplaces can provide significant benefits to both buyers and sellers. Of special interest are vertical marketplaces that concentrate on one industry.

to be countinue…

Source:

Efraim Turban, David King, Jae Kyu Lee, Ting-Peng Liang, Deborrah C. Turban (2015), Electronic Commerce A Managerial and Social Networks Perspective