The history and evolution of e-commerce

One of the most popular activities on the net is shopping. You can shop through web anytime and anywhere no matter you are wearing pajamas. E-commerce is a selling and buying process that done electronically through technology. Generally, e-commerce can be done with electricity, cable, computer, modem and the internet. E-commerce was started to be use in 1991 when the web are open for commercial use. From that time, thousand of businesses are started in the web and many of the people gain profit through this e-commerce.

At first, e-commerce was developed with Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) which were introduced in late 1970s. These two applications enable user to send or receive business document like purchasing order, sale invoice and so on. With the rapid growth of e-commerce, credit card, automated teller machine (ATM), telephone banking, airline reservation system were introduced in 1980-1990. Online shopping was introduced by Micheal Aldrich in 1979. However, this was widely used transport manufacturers such as Ford, Peugeot-Talbot, General Motors and Nissan.

• 
  1990: Tim Berners-Lee writes the first web browser, WorldWideWeb, using a NeXT computer.

• 1991: commercial enterprise on the Internet was strictly prohibited. Although the Internet became popular worldwide around 1994, it took about five years to introduce security protocols and DSL allowing continual connection to the Internet.
  
  
• 1992: J.H. Snider and Terra Ziporyn publish Future Shop: How New Technologies Will Change the Way We Shop and What We Buy. St. Martin's Press. ISBN 0312063598.
  


• 1994: Netscape releases the Navigator browser in October under the code name Mozilla. Pizza Hut offers pizza ordering on its Web page. The first online bank opens. Attempts to offer flower delivery and magazine subscriptions online. Adult materials also becomes commercially available, as well as cars and bikes. Netscape 1.0 is introduced in late 1994 SSL encryption that made transactions secure.
  



• 1995: Jeff Bezos launches Amazon.com and the first commercial-free 24 hour, internet-only radio stations, Radio HK and NetRadio start broadcasting. Dell and Cisco begin to aggressively use Internet for commercial transactions. eBay is founded by computer programmer Pierre Omidyar as AuctionWeb.
  




• 1998: Electronic postal stamps can be purchased and downloaded for printing from the Web.
  
  
• 1999: Business.com sold for US $7.5 million to eCompanies, which was purchased in 1997 for US $149,000. The peer-to-peer filesharing software Napster launches. ATG Stores launches to sell decorative items for the home online.
  
  
• 2000: The dot-com bust. A lot of European and American business companies offered their services through the World Wide Web. Since then people began to associate a word "ecommerce" with the ability of purchasing various goods through the Internet using secure protocols and electronic payment services.
  


• 2002: eBay acquires PayPal for $1.5 billion. Niche retail companies CSN Stores and NetShops are founded with the concept of selling products through several targeted domains, rather than a central portal.
  
  


• 2003: Amazon.com posts first yearly profit.



• 2007: Business.com acquired by R.H. Donnelley for $345 million.
  


• 2008: US eCommerce and Online Retail sales projected to reach $204 billion, an increase of 17 percent over 2007.

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

Revenue models indicated how an organization or E-commerce company generated sales. They are generating sales by using revenue models such as sales, transaction fees, subscription fees, advertising fees, affiliate fees and other revenue source.

Google

Google's revenue model has generated revenue from variety of revenue models. It earns profit from advertising fees such as Google AdWords. Advertising fees refer to a publisher allocate some advertisements in their website for banner in return for a fee. Google AdWords is a pay per click advertising program of Google which allows the advertisers to present advertisements to people at the instant the people who are looking for those related information.

Google has generated revenue from the revenue model by collecting affiliate fees which is Google AdSense. Website owners can enroll in this program to enable text, image and, video advertisements on their sites. Revenue is generated on a per-click or per-thousand-ads-displayed basis and the ad are administered by Google. Pay per click basis means the advertisers have to pay to Google for how many times the users have clicked in their advertisement.

Amazon

Amazon's worldwide revenue comes from media categories such as books, music, video, Amazon's product footprint in the US has expanded into over 40 categories. Amazon is not just in the business of selling products via the Internet. Besides that, Amazon sells a variety of new and used products for which Amazon receives a commission on products sold via its Marketplace, and although commisions for these products are affiliate fees. Other than that, there are few advertisement displays in their main webpage where users browsing through some items. So that, the Amazon are generated revenue from sales and affiliate fees.

Ebay

Most of the common eBay's revenues come from online auction and shopping website in which people and businesses buy and sell goods or services worldwide. eBay generates revenue from a number of fees. The eBay’s fees may consist of insertion fees, promotional fees and final value fees. Insertion fees are charged for any item that is listed on eBay, but the fees paid is nonrefundable. Promotional fees are charged for extra listed options that attract attention for an item, while for final value fees are a commission at the end of the auction that is charged to seller.

Google, Amazon and eBay are the most successful e-commerce companies in the world. Nowadays, they are selling variety types of products and services to generate different variety revenue model. For Google's revenue models may mainly generated from the advertising fees, Amazon's revenue models are widely generated from sales, transaction fees, affiliate fees and etc whereas eBay's revenue models are generated from transaction fees.

In order to complete the transactions in these e-commerce website, customers are highy encouraged by using Paypal service instead of credit cards. This is because customer need not expose their credit card or bank account number by using Paypal service. Paypal website is shown as below:

An example of an E-Commerce failure and its causes

EBay, Amazon, and Dell are the example of successfully operating business through e-commerce. However, there still have many companies that are not able to perform well through e-commerce and lead to winding up. For example the Boo.com.

Boo.com was a European company founded in 1998 and operating out of a London head office, which was founded by three Swedish entrepreneurs, Ernst Malmsten, Kajsa Leander and Patrik Hedelin. This British company dealing business through Internet by selling the clothes and comes tic. However, the vision of Boo.com was became the worlds first online global sports retail site. Unfortunately, Boo.com has been liquidated on May 18th 2000, the investors funds could not be raised to meet the spiraling marketing, technology and wage bills.The failure of Boo.com as an e-retailer:

Bad planning
The founder of the Boo.com was too ambitious in their business plan. Instead of starting small and then expanding slowly, they wanted to dominate the market immediately.

Lack of sound financial management
The grandiose and sizable vision of Boo.com’s founders and investors came with huge costs which spiraled out of control due to lack of sound financial management. In addition to the initial outlay website, there were high maintenance expenses.

Cash burn

Over the course of two years, the company managed to burn through $130m of investors' money, as well a substantial amount of the founders' savings. It indicates that the endless rounds of raising finance, glamorous parties, staff clashes and bitter sparring with the press.

Poor design, browsing and navigation
The website was heavily relied on Java Script an Flash technology to display 3D views of wares. Besides that the Boo.com website has the poor design for its targeted audience, going against many usability conventions. Not only that, the website also very time consuming to load and this make the vast majority of users have to spend their time when using the website. This is due to the poor broadband technology at that time. The complicated design also required the site to be displayed in a fixed size window. It makes the users hard to see all the products one time because the space available has been limited.

Poor marketing

Nevertheless, Boo.com marketed itself as a premium sports, urban street wear and fashion retailer, stocking quality products for the fashion conscious young individual. However, with premium products came expensive charges but the customer wish to buy cheaper products through Internet. Besides that, the clothing concern by customers is to see, feel and try before buying.

An example of an E-Commerce success and its cause

There are several E-Commerce Companies that attract people about E-Commerce such as Amazon.com , eBay, and Yahoo. Lets talk about one of the famous success E-commerce in the world which is Amazon.com.

Amazon.com was founded by Jeff Bezos in year 1994. According to the study in ecommerce-guide.com , Amazon.com is the premier e-commerce company, having translated its Brand Performance into value on the Bricks Interaction. The research shows Amazon's value here is essentially the equivalent of a retail storefront, something that customers don't see in the other e-commerce companies.

There are many causes that develop the success in Amazon.com. They are also the key of building a success E-commerce company.

Design of the web page

The website famous in selling books. But, there are also different products provided. As a user of the website, I found that Amazon is a user-friendly website. The design of the website can clearly make me how to find and purchase products that I want.

Amazon.com has a very good electronic storefronts which provided with electronic catalog, search engine, electronic cart, payment gateway, shipment court and customer services.

Special Events provided

Besides that, Amazon also added some special festival offers such as Fathers' Day. They provide us a special deals for fathers' day. http://www.amazon.com/Fathers-Day-Gifts-Sale/ .This link will bring you to the gifts that suitable for your dad. They also category them into different departments that help users to find what they want in the shorter time.

Strategic of the company

Amazon.com hires local employees in foreign countries to help them gather information about the local market and demand of the local potential customer. With this, they are on top of other e-commerce companies.

Satisfaction of Customer

The continuous study of the buying pattern of consumer that results in continuing making their customers happy. Amazon.com attracts and retains their customers by offering various rewards to their customers. Besides, Amazon.com also provides the free of charge additional services such as gift-wrapping to their customers. Amazon.com has also managed to improve their shipping system throughout the year.

Effective marketing process

Amazon.com frequently communicates with their customer effectively. The punctuality of the product shipping also contributes to the effective marketing process. They has increased their capabilities to quote the available product on the real time basis. Amazon.com also acts as a middleman between the consumer and other retailer.

Thank you for reading. Post a comment ya..