Chapter 10 starts by discussing some of the features that are unique to e-commerce, digital markets and digital goods. E-Commerce includes digitally enabled commercial transactions between companies and people. Ubiquity, global reach, universal technology standards, richness, information density and interactivity are all unique e-commerce features. Digital markets tend to be more transparent and they have reduced information asymmetry, transaction and search costs as well as the ability to change prices based on market conditions. Music, software, videos and books are all digital goods and can all be delivered over a digital network. Digital products are great because once the original has been created the price of delivering the product is typically lower.
E-tailers, market creators, transaction brokers, content providers, community and service providers and portals are all e-commerce business models. The main e-commerce revenue models are sales, advertising, free-freemium, subscription, affiliate and transaction fee.
E-commerce has transformed marketing by identifying marketers new ways of communication with millions of customers and at a low cost. Companies use crowd sourcing to use the "wisdom of crowds" and improve product offerings and grow customer value. Behavioral targeting techniques are also used to increase the effectiveness of rich media, banner and video ads.
Business to business transactions have also been affected by e-commerce. It is used to enable companies to locate suppliers, place orders, solicit bids and track orders electronically. Net marketplaces provide individual, digital marketplace for sellers and buyers. Even more private industrial networks link a company with its suppliers and other strategic business partners and develop extremely efficient and responsive supply chains.
For location based applications like, finding local hotels and restaurants m-commerce is best suited. Millions of people use mobile phones and other hand held devices to pay bills, banking, securities, music and games. M-commerce does require wireless portals and digital payment systems.
Anytime you build an e-commerce website you must ensure that you have a clear understanding of the business objectives that must be achieved and the technology necessary to hit those goals. E-commerce sites can be hosted locally or outsourced to external service providers.
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