E-commerce Business Models & Concepts

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    Selling Products

    • Offering products for sale on the Internet through a shopping cart is the fundamental e-commerce business example. Rather than have to drive to a physical store, consumers can browse the Internet and complete purchases of just about any tangible item online. Brick-and-mortar retailers often build shopping cart websites to reach customers who are outside their immediate geographic reach and to offer an additional convenience to existing customers.

    Advertising & Media

    • Websites that have a high numbers of visitors or are frequented by a very specific audience can often sell advertising space in the form of banners, text links and email newsletters. Internet advertising rates are expressed in terms of cost per thousand impressions, or CPM, rather than in monthly rates. An impression is simply a set of eyeballs that view a specific Web page; CPM is the cost the advertiser pays to reach 1,000 sets of eyeballs. Advertisers pay higher CPM rates for more targeted media buys aimed at certain age groups, special interests or genders.

    Premium Content & Subscription

    • The Internet and its search engines have made it far easier to locate specialized information. Publishers and owners of such content and information are able to offer their information online versus printed materials. Content providers often generate money by selling advertising space but make premium or more in-depth content available to interested parties on a paid basis in the form of subscription fees. Content owners can also syndicate their content to other websites and receive licensing revenue.

    Lead Generation

    • Local and national service providers, from home improvement contractors and movers to Internet service providers and home security companies, have tremendous appetites for new service inquiries, leads and customers. Compared to print advertising, where measuring the success of a specific marketing campaign can be difficult, tracking the source of a phone call or service inquiry generated from a specific Internet marketing campaign is simple. Rather than charge upfront fees and ongoing costs, companies may generate leads for businesses in exchange for a transaction fee or bounty on the lead or customer acquisition. This performance-based marketing allows the company paying for the leads to determine an exact return on investment and unlimited upside potential for the seller of the leads.

    Infrastructure

    • The successful operation of websites requires the support of a variety of elements that function behind the scenes. These items are usually invisible to the consumer but are the lifeline of the e-commerce business owner. Infrastructure service providers collect periodic or transactional fees for the services provided. Website operators rely on virtual payment gateways to securely authorize and approve credit card transactions in real time; analytics and reporting services provide valuable customer behavioral data, such as when people are most likely to abandon a website. Let's also not forget the hosting companies that provide hard-disk space and connectivity to the Internet for your website to live on.

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