MIRPUR UNIVERSITY OF SCIENCE AND TECHNOLOGY (MUST), MIRPUR
DEPARTMENT OF COMPUTER SCIENCE & INFORMATION TECHNOLOGY
E-COMMERCE
BIT - 3604
Lecture 03 : E-Commerce Business Models
Ms. Saeeda Kouser
(Lecturer)
Date: ______________
LECTURE CONTENTS
1. Introduction
2. E-Commerce Business Models
3. Business-to Business model
4. Consumer –to-Consumer model
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INTRODUCTION
• Key concepts and skills for the strategic use of e-commerce and related information technology
are presented from three perspectives: business to consumers, business-to-business, and intra-
organizational.
• E-Commerce business models are key components of e-commerce business activities.
• The important business models are Business-to Business model, Business-to-Consumer model
and Consumer –to-Consumer model.
• The different type of business models elaborate and map the interaction between website, seller
and buyer at discrete level.
• Graphical representation of each model shows the request and response mechanism of e-
commerce system
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BUSINESS - TO – BUSINESS MODEL
Business - to – Business Model
• A website following the B2B business model sells its products to an intermediate
buyer who then sells the product to the final customer.
• As an example, a wholesaler places an order from a company's website and after
receiving the consignment, sells the end-product to the final customer who comes to
buy the product at one of its retail outlets.
• B2B identifies both the seller as well as the buyer as business entities.
• B2B covers a large number of applications, which enables business to form
relationships with their distributors, re-sellers, suppliers, etc.
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BUSINESS - TO – BUSINESS MODEL
Fig. 6 - B2B Model
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BUSINESS - TO – BUSINESS MODEL
• Following are the leading items in B2B e-Commerce.
• Electronics
• Shipping and Warehousing
• Motor Vehicles
• Petrochemicals
• Paper
• Office products
• Food
• Agriculture
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BUSINESS - TO – BUSINESS MODEL
Key Technologies
The key technologies used in B2B e-commerce are−
• Electronic Data Interchange (EDI) − EDI is an inter-organizational exchange of business
documents in a structured and machine process able format.
• Internet − Internet represents the World Wide Web or the network of networks
connecting computers across the world.
• Intranet − Intranet represents a dedicated network of computers within a single
organization.
• Extranet − Extranet represents a network where the outside business partners, suppliers,
or customers can have a limited access to a portion of enterprise intranet/network.
• Back-End Information System Integration − Back-end information systems are database
management systems used to manage the business data.
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BUSINESS - TO – BUSINESS MODEL
Architectural Models
Following are the architectural models in B2B e-commerce −
• Supplier Oriented marketplace -
• In this type of model, a common marketplace provided by supplier is used by both
individual customers as well as business users.
• A supplier offers an e-stores for sales promotion.
• A Classic example of a supplier-oriented B2B marketplace is that of Cisco connection
online (CCO)which operates Cisco’s electronic marketplace.
• The various services of B2B that cisco’s website provided to its customers
• 1. Customer Service
• 2. Online Ordering
• 3. Tracking Order Status.
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BUSINESS - TO – BUSINESS MODEL
Architectural Models
• Supplier Oriented marketplace -
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BUSINESS - TO – BUSINESS MODEL
Architectural Models
• Buyer Oriented marketplace −
• In this type of model, buyer has his/her own market place or e-market.
• He invites suppliers to bid on product's catalog.
• A Buyer company opens a bidding site.
The advantages to the buyers are:
• Identifying and building relationships with new suppliers worldwide.
• Cutting down sourcing cycle times and reducing the costs of sourced goods.
• Transmitting information to multiple suppliers simultaneously and quickly.
• Quickly receiving and comparing offers from a large number of suppliers to get the
best deal.
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BUSINESS - TO – BUSINESS MODEL
Architectural Models
The advantages to the Sellers are:
• Access to global buyers
• Boosted Sales
• Lowered costs for sales and marketing activities
• Improved sales productivity
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BUSINESS - TO – BUSINESS MODEL
Architectural Models
• Intermediary Oriented marketplace −
• In this type of model, an intermediary company runs a market place where business
buyers and sellers can transact with each other.
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BUSINESS - TO – BUSINESS MODEL
Architectural Models
• Intermediary Oriented marketplace −
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BUSINESS - TO – BUSINESS MODEL
THE ONLINE B2B AUCTIONS: B2B auctions can be categorized into three major types:
• Independent Auctions:
A co. may use a third-party auctioneer to create the site and sell its goods. E.g. www.fairmarket.com
• Commodity Auctions:
Many buyers and sellers come together to a third-party web site for the auction of the same product.
E.g. www.fastparts.com
• Private Auctions:
Many co’s auction their products themselves on their own sites, without taking the help of intermediaries.
Such auctions may be open or by invitation only.
E.g. www.auctionblock.com
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BUSINESS - TO – BUSINESS MODEL
B2B APPLICATIONS
• - Supply Chain Management (SCM)
• - Electronic Marketing
• - Procurement Management
• - Just-in-Time (JIT) delivery
• - Electronic Data Interchange (EDI)
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COSUMER - TO – CONSUMER MODEL
Consumer - to – Consumer Model
• A website following the C2C business model helps consumers to sell their assets like
residential property, cars, motorcycles, etc., or rent a room by publishing their
information on the website.
• Website may or may not charge the consumer for its services.
• Another consumer may opt to buy the product of the first customer by viewing the
post/advertisement on the website.
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CONSUMER - TO – CONSUMER MODEL
Fig. 7 - C2C Model
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ACKNOWLEDGEMENTS
• Dave Chaffey :E-Business and E-Commerce Management Strategy, Implementation and
Practice 5th Edition ISBN: 978-0-273-71960-1
• https://www.tutorialspoint.com/e_commerce/e_commerce/htm
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THANKS