Ecommerce Business Models

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ESSAY 2: Select two ecommerce websites with totally different business models and describe their business models. Select one Australian and one International site.

Electronic commerce is the term that refers to any type of business, or commercial transaction, that involves the transfer of information across the Internet (Le 2013). Ecommerce can include different types of businesses form consumer based retail sites such as asos.com, auction sites such as eBay or music sites such as iTunes or Pandora (What is ecommerce 2013). As a consumer I use ecommerce websites regularly including iTunes, Asos, Eastbay and Pandora. Ecommerce is the largest retail growth area in the world, after getting off to a relatively slow start (What is an ecommerce website 2013).

An ecommerce business model is an approach to conducting electronic business over the Internet (Baltzan et al. 2010, p. 123).

Figure 1: e-Business models (Baltzan et al. 2010)

Figure one details the major Ecommerce business models are used by organisations, business and consumers.

EBay is an example of an International C2C model, because its site brings people together to buy sell and trade online. This C2C Ecommerce business model has its origins from the previous newspaper classifieds such as the trading post.

EBay was launched in 1995 by founder, Pierre Omidyar as a global commerce platform and payments leader connecting millions of buyers and sellers and eBay is now the world’s largest online marketplace EBay’s success has seen its expected 2013 first quarter net revenues to be in the range of $3,650-$3,750 million and full year in the range of $16, 000 - $16,500 million (Reports strong fourth quarter and full year 2012 results 2013).

EBay utilises the brokerage e-business model as it is a website that brings two parties together to conduct business. The brokerage model generally collects a fee for their service which in eBay’s case is called an insertion fee, when a user...
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