An Example Of E-Commerce Failure And Its Causes

Toys R Us Company is one of the examples of the ecommerce failure which I would like to share with everyone. This company is the leading retailer of toys, children’s apparels and baby products in the world. It provides customers with an unparalleled online selection of distinctive toy and baby products. In 1999 Toy R Us announced to create an e-commerce subsidiary – ToysRus.com. It has established as a video game, premier online toy and baby store outlet.

There are few reasons that cause Toys R Us Company towards its failure. The main reason is the formation of the company convert to the e-commerce system. Frankly, not all the company possess huge capital to invest in e-commerce system especially small company since it is large expansion for the company. Hence, if the company face the economy crisis due to the large expansion, it will influence the milestone of the company in the future.

Moreover, when Toys R Us Company changes into the e-commerce system, they neglect some common factors that will affect the operation of the company during the holidays. Shipping product takes man power during the holiday season. It will tend to slow down the process simply by the sheer volume of orders of the mail service industry receives in that short period of times.

On the other hand, the another cause of the Toy R Us Company is the inability of the customer to choose the product that are more effectively sold online than in the real world. Particularly online clothing shopping requires the customer to conjecture at what they had looked at the garments through the website. Further, the company will produce a fictitious image to catch the consumers’ attitude to purchase their products. It makes the customer hesitate for purchasing products presented on the website.

Lastly, the failure cause is delivery service provided by the company. As we know that, while delivering cannot be offered on time, the customers can request for the compensation. As a result, failure to deliver the ordered stock on time to customers created Toy R Us Company give away hundreds of $US100 vouchers to displeased customers.

Revenue Model for Google, Amazon.com and eBay

Revenue models are defined how a company creates their revenues and hence they are an integral part of business models. Revenue model also can produce a superior return on invested capital. The major types of revenue models are:

Advertising revenue model: A company provides a forum for advertisements and receives fees from the companies that advertise their products.

Affiliate revenue model: A company receives commissions for referring customers to others web sites.

Sales revenue model: A company gets the revenue by selling goods, information or services.

Subscription revenue model: A company charges a subscription fee for the users that access to the content and services offered.

Transaction fee revenue model: A company receives a commission for enabling or executing a transaction. It is based on the volume of transactions made.

Now, I’m going to compare the revenue model for Google, Amazon.com and eBay.

Google, Amazon.com, and eBay have been viewed as big e-commerce merchants and took over the lead of e-market.

Google’s Revenue Model

Google Inc is an American public corporation, earning revenue from advertising related to its Internet search, web-based e-mail, online mapping, office productivity, social networking, and video sharing as well as selling advertising-free versions of the same technologies. The principal services offered by Google include Google AdWords and Google AdSense.

Google AdWords which offers pay-per-click (PPC) advertising, site – targeted advertising for both text and banner ads. This program includes local, national, and international distribution. Google’s text advertisements are short, consisting of one title line and two content text lines.

Google AdSense is an ad serving program. Website owners can enroll in this program to enable text, image and, video advertisements on their sites. These ads can generate revenue on either a per-click or per-thousand-impressions basis.

Amazon.com’s Revenue Model

Amazon was one of the first major companies to sell goods by Internet.Amazon.com started as an on-line bookstore, but soon diversified to product lines of VHS, DVD, music CDs, MP3 format, computer software, video games, electronics, apparel, furniture, food, toys, etc. Amazon.com successfully earned distributed transaction fees which are fixed at price through creating virtual marketplace. However, Amazon is also a pioneer in affiliate partnership marketing.

Amazon Marketplace is Amazon.com’s fixed price online marketplace that allows sellers to offer their goods alongside Amazon’s offerings. Buyers can buy new and used items sold directly by a third party through Amazon.com using Amazon Marketplace. This sales strategy and program has been very profitable for Amazon.com. Amazon charges a commission rate based on the sale price, a transaction fee, and a variable closing fee which are sales revenue model and transaction fee revenue model.

eBay’s Revenue Model

eBay popularized the auction format listing. Like most auction companies, eBay does not actually sell goods that it owns itself. It merely facilitates the process of listing and displaying goods, bidding on items, and paying for them. It acts as a marketplace for individuals and businesses that use the site to auction off goods and services.

eBay offers several types of auctions such as below:

1. Auction-style listings allow the seller to offer one or more items for sale for a specified number of days. The seller can establish a reserve price.

2. Fixed Price format allows the seller to offer one or more items for sale at a Buy It Now price. Buyers who agree to pay that price win the auction immediately without submitting a bid.

3. Dutch Auctions allow the seller to offer two or more identical items in the same auction. Bidders can bid for any number from one item up to the total number offered.

An Example of E-commerce Success and Its Causes

Due to the evolution of internet, e-commerce has become more and more popular. Nowadays, many companies and individual are started to run an online business. The appropriate example of e-commerce success that I have selected to address is eBay.

eBay is the world’s largest online marketplace, where allows buyers and sellers to come together and trade anything at any time. It was founded in year 1995, by Pierre Omidyar, a computer programmer. eBay provides an online platform where millions of items are traded everyday.

eBay has become a well-known online auction website, because it has built an online person-to-person trading community, using the World Wide Web. It provides a convenient way for buying and selling online. Sellers list the item on eBay, such as antiques, cars, books and etc. They choose either bid for the item (an auction-type listing) or to select the ‘Buy It Now’ option, which allows buyers to purchase the item right away at a fixed price. Buyers can browse through the listed item in a fully automated way. Those item are arranged by topic, where each type of auction has its own category.

Another factor is that online shopping has become more and more popular and people enjoy the experience of the online shopping. A lot of people like to shop on eBay, because they believe that it is a trustworthy shopping website, and they feel comfortable to shop there, therefore it has become a very practical place that people will buy and sell things.

Recognizing the success of e-commerce relies on the number of users. There are more than 100 million people around the world who buy and sell in eBay marketplace. eBay makes its money from listing and collect the fees from registered users who use eBay site to trade their goods. In year 2000 eBayset up the 'eBay University', which is a learning program that help people to become successful eBay merchants. It encouraged people to deal in online business and make profit through the eBay system.

Related links:

http://www.ebay.com/

http://www.ecommercetimes.com/story/2127.html?welcome=1213184390

The History And Evolution Of E-Commerce

* Introduction *

Electronic commerce (e-commerce) can be defined as the buying or selling of goods and services over the Internet. This basically is the use of digital transactions between and among businesses and individuals. However, more commonly e-commerce nowadays is the use of the Internet to operate business.


* The History Of E-Commerce *

History of ecommerce dates back to the invention of the very old notion of “sell and buy”, electricity, cables, computers, modems, and the Internet. At the beginning, the term of e-commerce meant the process of execution of commercial transactions electronically with the help of the leading technologies such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT).

However, in 2000, since there are a great number of business companies in the United States and Western Europe represented their services in the World Wide Web, the meaning of the word e-commerce was changed. People began to define the term of e-commerce as the process of purchasing of available goods and services over the Internet using secure connections and electronic payment services.

By the way, the history of e-commerce is unthinkable without Amazon which was among the first Internet companies to allow electronic transactions. Amazon.com, Inc. is one of the most famous e-commerce companies and it is located in Seattle, Washington (USA). It was founded in 1994 by Jeff Bezos and it was one of the first American e-commerce companies to sell products over the Internet.

* The Evolution Of E-Commerce *


The evolution of the e-commerce is summarized as follows:

1984
EDI, or electronic data interchange, was standardized through ASC X12. This guaranteed that companies would be able to accomplish transactions with each other reliably.

1990
A researcher named Tim Berners-Lee at the European Organization for Nuclear Research (CERN, from its French name) proposed a hypertext-based web of information that a user could navigate using a simple interface called a browser. He called it the "WorldWideWeb".

1991
The National Science Foundation lifted a ban on commercial businesses operating over the Internet, paving the way for Web-based e-commerce.

1992
Compuserve offers online retail products to its customers. This gives people the first chance to buy things by using their computer.


1993
Marc Andreesen at the National Center for Supercomputing Applications (NCSA) introduced the first widely distributed Web browser called Mosaic.


1994
Netscape arrived. Providing users a simple browser to surf the Internet and a safe online transaction technology called Secure Sockets Layer.


1995
Two of the biggest names in e-commerce are launched: Amazon.com and eBay.com.

1998
DSL, or Digital Subscriber Line, provides fast, always-on Internet service to subscribers across California. This prompts people to spend more time, and money, online.


1999
Retail spending over the Internet reaches $20 billion, according to Business.com.

2000
The U.S government extended the moratorium on Internet taxes until at least 2005.

Today
The largest electronic commerce is Business-to-Business (B2B). Businesses involved in B2B sell their goods to other businesses. Other varieties growing today include Consumer-to-Consumer (C2C) where consumers sell to each other, for example through auction sites. Peer-to-Peer (P2P) is another form of e-commerce that allows users to share resources and files directly.


As a conclusion, the history and evolution of e-commerce is a history of a new, virtual world which is evolving according to the customer advantage. It is a world which we are all building together brick by brick, laying a secure foundation for the future generations.



All information are gained from
(i) www.ecommerce-land.com/history_ecommerce.htm
(ii) www.flysyk02.netfirms.com/Ecommerce/History.htm
(iii) www.mapsofworld.com/referrals/internet/internet-history/history-of-e-commerce.html
(iv) www.ecommercetimes.com/story/40249.html
(v) www.ecommerce-guide.com/news/trends/article.php/1016231