Business Models of eCommerce

E‐Commerce is a much wider subject than selling online. It is of the view that e‐commerce covers any form of transaction where technology has played a part.
There are also many different types of e‐commerce, with differing relationships existing with each. commerce models are either an extension or revision of traditional business models, such as advertising model, or a new type of business model that is suitable for the Web implementation, such as info-mediary. Merchant, brokerage, advertising, mixed, info-mediary, subscription are the most popular e commerce models.

• Merchant model
This model basically transfers the old retail model to the e-commerce world by using the Internet. There are different types of merchant models. The most common type of merchant model is similar to a traditional business model that sells goods and services over the Web. is a good example of this type. An e-business similar to utilizes the services and technologies offered by the Web to sell products and services directly to the consumers. By offering good customer service and reasonable prices, these companies establish a brand on the Web. The merchant model is also used by many traditional businesses to sell goods and services over the Internet. Dell, Cisco Systems, and Compaq are popular examples. These companies eliminate the middleman by generating a portion of their total sale over the Web and by accessing difficult-to-reach customers. An example that uses this model is Corporation.

• Brokerage model
T he e-business brings the sellers and buyers together on the Web and collects a commission on the transactions by using this model. The best example of this type is an online auction site such as eBay, which can generate additional revenue by selling banner advertisement on their sites.

• Advertising model
This model is an extension of traditional advertising media, such as television and radio. Search engines and directories such as Google and Yahoo provide contents (similar to radio and TV) and allow the users to access this content for free. By creating significant traffic, these e-businesses are able to charge advertisers for putting banner ads or leasing spots on their sites.

• Mixed model
This model generates revenue both from advertising and subscriptions. Internet service providers (ISPs) such as America On-line (AOL), and SuperOnline generate revenue from advertising and their customers' subscription fees for Internet access.

• Info-mediary model
E-businesses that use this model collect information on consumers and businesses and then sell this information to interested parties for marketing purposes. For instance, collect information related to the performance of other sites and sells this information to advertisers. provides free Internet access; in behavior of customers. This information is later sold to advertisers for direct marketing. offers free PCs to its customers for the same purpose.

• Subscription model
An e-business might sell digital products to its customers, by using this model. The Wall Street Journal and Consumer Reports are two examples., is another example of this model that sells business news and analysis based on subscription.


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