Business and Revenue Models for E-commerce
The Internet is certainly one of the best technological inventions that the world has experienced in the recent times. The Internet has grown to be an indispensable tool for business not only between consumers and firms but also between firms (Duff, 2009). The key beneficial feature of the Internet is the fact that it has opened up a large platform for trading to various firms and as such creating a new field of trading known as the Internet commerce or e-commerce. Through e-commerce, organizations have access to unlimited global reach at limited costs taking into consideration that it eliminates the role of intermediaries. E-commerce is not only beneficial to businesses but also to consumers, who enjoy ease and convenience of shopping as well as a wide range of choices and price variety for products and services (Morley, Parker & Parker, 2010). E-commerce has created a wide opportunity for unique business models and sources of revenue for business.
Business model refers to the method a business uses to do business and sustain itself through revenue generation. Business model explains how an organization earns its revenue. Morley, Parker and Parker (2010) assert that there is a wide range of business models in the Internet commerce just like in the traditional space that are used by various companies to generate revenue. The policies, technologies and operations used by the company will often be used to define and categorize business model. Online business models are categorized based on various classes ofe-commerce, which include Business-to-Business (B2B), Business to Consumer (B2C) and Consumer-to-Consumer (C2C) commerce.
B2C commerce involves businesses selling goods and services to individual consumers, and it is one of the first major types of e-commerce to be implemented over the web (Duff, 2009). Business models under B2C include E-tailer/storefront, portal models, content providers, transaction broker, market creator and service provider. Under e-tailer model, the consumer and the seller interact directly, and its key features include shopping cart technology, online catalogue of products and online payment. Notable e-tailers include amazon.com, dell.com and play.com. The portal model involves sites that allow free access to the variety of information to content users, which range from news updates, sports, online shopping, gambling, weather updates and searching (Mahadevan, 2000).
The content provider model involves distribution of digital content such as music, artwork, news and videos to the subscribers. The transaction broker model involves sites that process transactions for consumers, and they include E-trade.com, Ameritrade.com and Monster.com. According to Mahadevan (2000), Market Creator model involves the use of the Internet technology to create a trading platform that makes it easier to co-operate for both the buyers and sellers. Both parties can display products, establish prices and search products. Notable market creator includes eBay.com and Priceline.com.
Business model under B2B includes E-distributor, E-procurement, Exchanges, Industry Consortia and Private Industrial Networks. E-distributor model involves companies that supply products and services directly to individual organization, and they include Grainger.com and Geae.com. E-procurement model includes companies that create and sell access to digital electronic market, and they include Ariba and CommerceOne. Exchange model involves an electronic digital marketplace that gives room for both commercial buyers and suppliers to transact, and they include Exchange.eSteel.com and GEPolymerland.com. Private Industrial Networks model involves a digital network designed solemnly for enhancing exchange of information and data between transacting firms.
The existing revenue models in e-commerce come from the business models. For instance, E-tailer, portal, content provider and transaction broker models earn revenue from sale, advertisement, subscription and transaction fees respectively. Notable revenue streams in the Internet commerce include advertisements, subscription, and transaction fee, sale of goods or services and affiliate (Mahadevan, 2000).
Empoweringglobalnews.com (EGN) can be classified under a content provider model with respect to business model for e-commerce. This claim can be justified that EGN is involved in collecting and distributing digital content to be specific inspiring, positive, balanced and objective news. EGN main revenue model is advertisements.
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