An example of an E-commerce failure and its causes

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Post by Jaeme, 18 June 09 @ 9:35pm


One of the companies that failed in E-commerce is Boo.com. Boo.com was a United Kingdom internet company founded by Ernst Malmsten, Kajsa Leander and Patrik Hedelin. Boo.com was launched on 3rd November 1999 and their intention was to sell branded fashion wear over the internet.


According to “Financial Times”, Boo.com incurred a lot of consultancy fees to get the website launched. When the site was eventually available to the public, the customers felt frustrated to shop on their website. Miss Boo who was the online virtual shopping assistant failed to help customers with the purchasing experience. Customers faced slow browsing, poor navigation and lousy technology. This was a major problem for the company and Boo.com resulted in bad reputation. On 18 May 2000, Boo.com went into liquidation and was placed into receivership. Now, it is owned by Web Reservations International.


Major causes that resulted in the failure of Boo.com:-


1. Poor Web Design and Usability.
  • The site relied heavily on JavaScript and Flash technology to display the 3D views. At that time, User’s internet connection did not have such high bandwidth (56K modems and above) for 3D viewing. Consumers have to wait for a long time for the site to load. Besides that, the site was display in a fixed size window which limits the space of displaying the products’ information. Boo.com also placed a limit on the amount of transactions a consumer made. This resulted in the lost of potential customers from their website.

2. Bad marketing

  • Although Boo enable consumers to view the products in 3D image, they were unable to set attractive products prices. Studies sponsored by KPMG, Hewlett- Packard and VNU Publications showed the three importance of web purchasing in; UK – “Ease/ Convenience”, “Better Prices”, and “Speed of Process”. However, Boo.com did not fulfill any of these three criteria.

3. Bad planning.

  • The Swedish founders of Boo.com were too ambitious in their business plan as they wanted to expand their business into internet marketing immediately, instead of starting from a small business. This lead to the failure of their company.

4. High Maintenance Costs.

  • The company was unable to cover its construction costs which incurred a high maintenance expense of five thousand pounds a month. The cost was used in creating 3D photographs of the products in the web.



For a company be successful in e commerce, their website should be launched only if it has been strictly tested. Besides that, companies should implement the most effective method to advertise and promote their website and products. Furthermore, an e Commerce Company can maintain consumer loyalty by offering rewards and discounts on their products.


References:


http://www.edigitalretail.com/Most_Famous_Dotcom_Failure.pdf


http://www.bookrags.com/wiki/Boo.com


http://www.techcrunch.com/tag/boocom/

An example of an E-commerce success and its causes

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Post by Jaeme, 18 June 09 @ 8:59pm



Amazon.com is a very successful company in E-commerce. Amazon is one of the first and biggest companies to sell goods over the internet. Jeft Bezos is the person who formed Amazon in 1994, and launched in 1995. Amazon started an online bookstore and soon quickly diversified to selling VHS tapes and DVDs, music CDs, software, vidoe games, electronic, MP3s, clothing, furniture, toys and even food items one year after its stock market launched. Amazon was able to generate $15.7 million in sales since 1996. In May 1997, Amazon.com raised $54 million in an initial public offering as it launched itself on the stock market. Currently, Amazon is know to have achieved a multibillion-dollar business and is in the lead of the online busines world. it has a community of about 40 mllion customers worldwide.


The factors that contribute to Amazon’s success are:-


1. Amazon places a heavy emphasis on user experience.

  • Amazon will deliver the goods to consumers on the and consumers will be able to track the shipment easily through the web. Amazon also offers a very competitive price compared to other retailers.

2. Amazon remembers users' shopping cart.

  • Amazon is different from other online retailers. Many online retailers are not competent in their use of shopping-cart technolgy. They will delete your shopping cart within minutes if you do not complete your order right away. However, Amazon will save the items in the shopping cart for a few months before deleting it. The shopping cart alsogives consumers the ability to group their items into a few shipments and ship it as fast as possible.

3. Amazon knows their consumers well.

  • Amazon understands the profile of the customers without infringing customer privacy. Besides that, Amazon will recommend hose items or products that may interest a consumer based on the products they have purchased previously. Consumers will only get the information relevant to them from Amazon based on their purchasing behavior.

4. Superior search function.

  • Amazon's search function is amazing as consumers can just key in certain keywords such as author's name and book titles. It will then search on its inventory and display a catalog containing millions of products based on the categories such as home and kitchen, books, harware and even videos that they are actually seacrhing for.


For further information, you may visit to the website stated as below:
http://www.internet-story.com/amazon.htm
http://www.naturalnews.com/020038.html

Identify and compare the revenue model for Google, Amazon.com and eBay

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Post by Jackie, 16 June 09 @ 7:07pm

Revenue model is a combination of strategies and techniques which an organization uses in order to generate income. There are five main types of revenue models :-

1. Sales.

  • Revenue from sales of goods, product information and services of an organization.

2. Transaction Fees

  • Commision generated based on the volume of transactions achieved. The more transactions are made, the more revenue incurred.

3. Advertisement Fees.

  • Organizations allow other companies to advertise in their websites in return for a fee paid. This fee is called advertisement fees.

4. Subsrciption Fees.

  • Organizations charge a fixed amount of fees to customers that subscribe to their contents and services. Fees are charged monthly or annually.

5. Affiliate Fees

  • Organizations get commission for referring customers to other companies websites.

Google's revenue Model

Google gets a large amount of revenue from advertising fees. Their advertising revenue is generated mainly from Google AdWords, Google Adsense and Froggle. Besides that, Google Answers also produce some revenue for the company.

Google AdWords generates more than 90% of the total advertising fees. It is a pay per click advertising program which allows the users to get the information that they need as soon as they start searching for it. Google generates revenue when advertisers present advertisements to the public whom are looking for the information related to what the advertiser is offering and everytime the advertisement is clicked, Google gets paid a certain amout.



Google AdSense is a progamme where owners need to enroll to allow text, image and, video advertisements on their sites. Google generates revenue when the advertisement is clicked or per-thousand-ads-displayed basis.


Froggle is a service which enables users to easily search for products selling online. Froggle is unlike other search engines as it does not charge any fees for listing nor commision on sales. However, it generates revenue by providing advertising space for lease in Froggle in the form of AdWords.

References:
http://www.organicspam.com/google_revenue_model.asp



Amazon's Revenue Model


Amazon generates their revenue mainly by the retail sales of music CDs, DVDs, software, books, personal care items, household, electronics, toys and etc. They are one of America's largest online retailers. This is all done on Amazon Marketplace.

Amazon Marketplace is also a good revenue model for Amazon. A commission rate is charged based on the sale sprice, transaction fee, and a closing fee. These consist of the sales revenue and transaction fee revenue model.

Moreover, Amazon.com also generates revenue by their Amazon Associates Program. This progam is an affiliate program which contributes to their revenue. The fees charged for the affiliate links ranges from 4% to 10% of the product price. For example, Amazon.com receives a commision based on how many products or services of other company's are displayed.

References:

http://www.davechaffey.com/Internet-Marketing/C2-Internet-micro-environment/Online-revenue-models


http://www.ecommerce-guide.com/solutions/affiliate/article.php/3493196


eBay Revenue Model

 eBay is an online auction and shopping website where a community of individuals and businesses are able to buy and sell goods and services worldwide. The eBay Marketplace generates a major amount of revenue for eBay as thousands of eager users go online everyday worldwide to buy and sell collectibles, furniture, vehicles, equipment and many more. The items are available for purchase through auction-style or fixed-price trading.

PayPal is one of the revenue models of eBay. It allows for payments to be made and transferred through the internet. It charges a transaction fee at a certain percentage for the collection of money.

Besides that, another revenue model of eBay is Skype. It generates revenue by making premium offerings such as making and receiving calls to and from mobile phones, landlines, voicemail, call forwarding, and even personalization of ringtones.

References:


http://www.davechaffey.com/E-commerce-Internet-marketing-case-studies/eBay-case-study-e-commerce


http://pages.ebay.com/aboutebay/thecompany/companyoverview.html

History of e commerce and its evolution

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Post by Jackie, 15 June 09 @ 5:49pm
E-commerce began in the 19th century when telegraphs was commonly used with the help of the railway transportation system. Computers were only introduced in the late 1980's..

The development of E-commerce started when Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) was used to exchange business information and carry out electronic transactions. These technologies only appeared in the late 1970s which allowed organizations to send commercial documentation electronically. This was followed by the occurence of the first web browser, Mosaic web-browser in 1992. The next step of development was the development of Red Hat Linux. Linux is a type open sourced operating system other than Windows.

The internet played an important role in the evolution of E-commerce in the 1960s. The World Wide Web and browsers appeared in early 1990s. It took approximately four years to develop the security protocols (for example, HTTP) and DSL which helped to expand the volume and capacity of communication that helped in the process of rapid growth of the Internet. In 2000, business companies in United States and Western Europe represented their services in the World Wide Web.

The evolution of E-commerce has made become the most important tools in carrying a business over the internet. E-commerce has transformed traditional shopping beyond recognition nowadays. Today, E commerce has gained so much popularity because it is able to offer 3D images which provides consumers with a better understanding of its shape, size and texture. Although, most consumers prefer to go to “brick-and-mortar” stores to purchase goods and services, e commerce businesses has a bright future of success as people get more accustom to internet purchasing. The evolution of E-commerce which we are witnessing today brings in so much adventure into our lives that it is enjoyed by the online community. For example, Amazon and eBay are the first Internet companies that allow sales and purchases to be conducted online. As for Malaysia, PizzaHut was the first to do business online.

Besides that, E-commerce has evolved from Web 1.0 to Web 2.0. Web 2.0 is a popular term for advanced Internet technology and applications such as blogs, wikis, RSS and social bookmarking.
Web 2.0 floating about:

  1. the web as platform.


  2. underlying philosophy of relinquishing control.


  3. glocalization (making global information available to local social contexts and giving people the flexibility to find, organize, share and create information in a locally meaningful fashion that is globally accessible)


  4. data, interface and metadata no longer need to go hand in hand.


  5. action-at-a-distance interactions and ad hoc integration.


  6. giving up control and setting the data free.





Electronic commerce is the cheapest and fastest way to do business as one can simply go on the internet 24 hours a day, 7 days a week and 365 days a year with just a click of the mouse.

References:


http://www.ecommerce-land.com/history_ecommerce.html

http://www.mapsofworld.com/referrals/internet/internet-history/history-of-e-commerce.html

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