Small Business Management

Business Ecommerce Model

Business Ecommerce Model Solutions: An Overview

Business Ecommerce Model

Definition of ecommerce: Ecommerce is essentially the provision of goods and service or exchange of information for monetary consideration over the internet.

Business ecommerce models have evolved in response to the growth in the internet. Most ecommerce business models involve the transaction of goods and services or the provision of information. Business websites often utilize several different models to monetize web properties. The following article introduces several of the most common business models on the web today.

Merchants:

Whether this is an offline retailer with an online presence or a home based business, individuals and organizations can establish a virtual storefront, advertise and conduct sales over the internet. Many niche marketers specialize in this approach and have done well catering to small audiences who make online purchasers. The mark up on the cost of goods sold is the profit after deducting expenses. This is a popular business ecommerce model.

Digital goods are also classified under the merchant model. Information based ecommerce models have high margin because there is no holding costs for inventory. There are product establishment and transactions costs but these are incidental. Digital delivery sites such as Clickbank provide a centralized counterparty clearing for individuals who want to specialize in digital products.

Service Models:

These ecommerce business models typically provide access to information on a once off or ongoing basis. This is a popular model for financial based sites. Membership sites are an adaptation of this. Subscription options are offered on a month to month, quarterly, six month or yearly basis.

Broker/Auction Models:

Sites such as EBay or online classified websites provide a centralized marketplace for individuals to register goods and services for sale. The listing may attract a once off fee or be calculated according to a percentage of the sale price. This has become a popular way for individuals to dispose of personal goods such as household items and motor vehicles. Some vendors have created online stores that leverage off EBay's popularity.

Online Advertising:

Online advertising has created several different opportunities for individuals and organizations. Companies such as Google, Yahoo and MSN derive a large percentage of their revenue from text, image and video based advertisements. Merchants establish an account and bid on keywords according to their budget. The cost of advertising is shared between the provider the publisher who initiated the click through to the advertisers website. This is one of the most popular ecommerce solutions for monetizing a website or blog.

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