Unit -II E-commerce

TYPES OF E-COMMERCE

Different types of e-commerce are distinguished by the nature of the market

relationship—who is selling to whom. They are:

1. Business to Consumer(B2C)
2. Business to Business(B2B)
3. Consumer to Consumer(C2C)
4. Mobile e-commerce (M-commerce)
5. Social e-commerce
6. Local e-commerce

Mobile, social, and local e-commerce can be looked at as subsets of these types of
e-commerce.

1. Business-to-Consumer (B2C) e-commerce

 Business to Consumer. Here the company will sell their goods and/or
services directly to the consumer. The consumer can browse their websites
and look at products, pictures, read reviews. Then they place their order and
the company ships the goods directly to them.
 In this online businesses attempt to reach individual consumers. B2C e-
commerce includes purchases of retail goods, travel, financial, real estate,
and other types of services, and online content. B2C has grown
exponentially since 1995 and is the type of e-commerce that most
consumers are likely to encounter.
 Ex: Amazon is a general merchandiser that sells consumer products to retail
consumers.

2. Business to Business (B2B) e-commerce

 This is Business to Business transactions. Here the companies are doing
business with each other. The final consumer is not involved. So the online
transactions only involve the manufacturers, wholesalers, retailers etc.
 There are two primary business models used within the B2B arena: Net
marketplaces, which include e-distributors, e-procurement companies,
exchanges, and industry consortia, and private industrial networks.
 Ex: Metalshub is an independent third-party marketplace that serves the
paper industry.

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3. Consumer-to-consumer (C2C) e-commerce
 Consumer-to-consumer (C2C) e-commerce provides a way for consumers
to sell to each other, with the help of an online market maker (also called
a platform provider).
 In C2C e-commerce, the consumer prepares the product for market,
places the product for auction or sale, and relies on the market maker to
provide catalog, search engine, and transaction-clearing capabilities so
that products can be easily displayed, discovered, and paid for.
 Ex: eBay, Craigslist, and Etsy were the original C2C platform provider
pioneers in the United States, but today they face significant competition.
For instance, third-party sales on Amazon have skyrocketed. Facebook
has also entered the arena with Facebook Marketplace. There are also a
number of new entrants focused on the C2C market, such as Gumtree,
Quikr, Depop, and Vinted. On-demand service companies such as Uber
and Airbnb can also be considered as C2C platform providers.

4. Mobile e-commerce (m-commerce)

 Mobile e-commerce (m-commerce) refers to the use of mobile devices to
enable online transactions. M-commerce involves the use of cellular and
wireless networks to connect smartphones and tablet computers to the
Internet. Once connected, mobile consumers can purchase products and
services, make travel reservations, use an expanding variety of financial
services, access online content, and much more.
 Factors that are driving the growth of m-commerce include the increasing
amount of time consumers are spending using mobile devices, larger
smartphone screen sizes, greater use of responsive design enabling
websites to be better optimized for mobile use and mobile checkout and
payment, and enhanced mobile search functionality.
 A variation of m-commerce known as conversational commerce involves
the use of chatbots on mobile messaging apps such as Facebook
Messenger, WhatsApp, Snapchat, and Slack as a vehicle for companies to
engage with consumers.

5. Social e-commerce

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 Social e-commerce is e-commerce that is enabled by social networks and
online social relationships.
 Social e-commerce is often intertwined with m-commerce, particularly as
more and more social network users access those networks via mobile
devices.
 The growth of social e-commerce is being driven by a number of factors,
including the increasing popularity of social sign-on (signing onto websites
using your Facebook or other social network ID), network notification (the
sharing of approval or disapproval of products, services, and content),
online collaborative shopping tools, social search (recommendations from
online trusted friends), and the increasing prevalence of integrated social
commerce tools such as Buy buttons, Shopping tabs, marketplace groups,
and virtual shops on Facebook, Instagram, Pinterest, YouTube, and other
social networks.
 Social e-commerce is still in its relative infancy, but with social media and
networks playing an increasingly important role in influencing purchase
decisions and driving sales, it is continuing to grow. According to Policy
Factory, a series produced by ThinkTanks+, a Paris-based news agency
dedicated to think-thanks.

6. Local e-commerce
 Local e-commerce, is a form of e-commerce that is focused on engaging
the consumer based on his or her current geographic location. Local
merchants use a variety of online marketing techniques to drive
consumers to their stores. Local e-commerce is the third prong of the
mobile-social-local e-commerce wave and is being fueled by an explosion
of interest in local on-demand services such as Uber.
 Ex: Groupon offers subscribers daily deals from local businesses in the
form of Groupons, discount coupons that take effect once enough
subscribers have agreed to purchase.

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CONSUMER-ORIENTED E-COMMERCE

Consumer-oriented e-commerce or e-retailing involves selling directly to

consumers who are the end users on the internet.
 It frequently involves a temporary relationship.
 The buyers visit the selling site either casually or very infrequently,
perhaps only once.
 It has a relatively low volume of transactions and involves relatively
small payments.

In business-oriented (B2B) e-commerce involves transactions between two business

organizations.
 These transactions may frequently be specified within a formal contract.
 It usually involves much more documentation and record-keeping, which is
necessary for a business.
 The volume of transactions in B2B e-commerce is likely to be high and certainly
much higher than in customer-oriented transactions.
 The amounts of payments involved are also quite large. As the transaction
volumes and the payment levels are high, the buyer normally has much more
buying leverage in B2B e-commerce.

INTRODUCTION:

E-retailing
 E-retailing essentially consists of the sale of goods and services. Sometimes
we refer to this as the sale of tangible and intangible goods, as shown in
Figure(1).
 We can divide tangible goods into two categories: physical goods and digital
goods.
 Examples of physical goods would be a book, a television set, a video
recorder, a washing machine, etc.
 Examples of digital goods are sohare and music, which may be downloaded
from the internet. The sale of intangible goods is sometimes called e-
servicing.
 Examples of services(intangible) that may be sold are information such as the
most recent stock prices, the most recent foreign exchange rate, or education.
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Entertainment such as games that would be played on the internet is also
examples of e-services. So are the sales of services such as
telecommunication services or banking services.
 The sale of tangible and intangible goods is all referred to as customer-
oriented e-commerce or e-retailing, if they are sold directly to the consumer
who is the end user.

Figure(1): Selling of different types of goods

TRADITIONAL RETAILING AND E-RETAILING

Traditional retailing
 Traditional retailing essentially involves selling to a final customer through a
physical outlet or through direct physical communication.
 This normally involves a fairly extensive chain starting from a manufacturer to a
wholesaler and then to the retailer who through a physical outlet has direct
contact with the final customer.
 Examples of physical outlets that retailers currently use are:
1. Malls
2. Generalized stores (e.g. department store)
3. Specialized stores
4. Franchise stores
Malls consist of a collection of individual stores, each of which is under
their own separate management. The mall management only provides the
physical location where the retailer can create his outlet.

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Generalized stores are stores that essentially have one unified management
but carry several different product lines. So a generalized store may carry
everything from shoes to books, to beds, to television sets. It does not
specialize in a specific area of merchandise that it actually retails.
Specialized stores, on the other hand, sell a specific product line. They may
choose to be in clothes and may be in a particular segment of the clothing
market. Thus, a specialized store may position itself at the high end of the
clothing market and sell only brand names.
Franchise stores, on the other hand, are stores where there is a single
marketing chain and brand name for the store, but the individual store may
be run by a different management with a royalty arrangement back to the
franchisee. The franchisee would normally be responsible for the marketing,
advertising, and sometimes supply of merchandise.
More recent forms of traditional retailing include:
1. Direct mailing
2. Telemarketing
3. Door-to-door sales
4. Vending machines
Direct mailing to a customer normally involves sending a brochure or
catalog to a customer. The customer browses through this catalog and then
carries out mail ordering.
Direct mailing, telemarketing, door-to-door sales, or the use of vending
machines includes other forms that have actually moved away from a
physical fixed outlet and in a way are intermediate forms of the movement
away from traditional physical retailing outlet to the virtual retailing we see
on the internet.

E-retailing
 The internet has allowed a new kind of specialization to emerge.

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 Instead of specializing just in a special product line, they allow specialization in
particular classes of customers and sellers.
 Thus, we see lastminute.com, which allows last minute purchases of travel
tickets, gift, and entertainment to be matched against last minute sellers of the
same items. Here, we see specialization not in a product line but in a class of
purchasers and a class of sellers. This kind of specialization would not have
been possible before we had the internet.
 In addition to these specialized stores, we also get generalized e-stores where a
store sells several product lines under a single management. Examples of these
generalized stores include JC penny and Walmart.

Map traditional forms to e-retailing as follows:

Specialized stores specialized e-stores
Generalized stores Generalized e-stores
Malls E-malls
Franchise stores ?
New form of business: e-broker

BENEFITS OF E-RETAILING

To the customer:
The numbers of benefits of e-retailing to the customer are:
1. Convenience:
 It is convenient for the customer as he does not have to move from
shop to shop physically in order to examine goods. He is able to sit in
front of a terminal and search the net and examine the information on
goods.
 Customer gets is in terms of time. Normally, the traditional shop has
an opening time and a closing time and the customer can only visit
the shop within these periods. On the net, the customer can choose at
any time to visit a site to examine the goods that are available and
actually carry out his purchasing at one’s own convenient time.
 The customer gets is that he has access to a search engine, which will
actually locate the products that he describes and also the site where
they may be available, or perhaps even locate the sites where they
may be available at the best price.
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2. Better information:
 The Internet and the World Wide Web are essentially communication
media that allow retailers to put on quite extensive information
related to their products, which is available to the customers.
 Since the customer can look at several sites, he will be able to obtain
different pieces of information from each site to build a far better
picture for himself about the products that he is interested in.
 Customer reviews of different products as well as reviews by the
business itself.
3. Competitive price:
 Customer gets is competitive pricing. This is due to two factors.
The first is lowered costs to the retailer because he does
not have to maintain a physical showroom, he does not have to hire
several shop assistants, and these savings can be passed on to
customers in the form of reduced prices.
Secondly, competitive pricing pressure that arises from the fact
that the customer is now able to look at prices at several sites.
Therefore, the pressure is always there on the retailer to maintain a
competitive price for his products.
4. Customization:
 The customer can actually specify the features of the products that he
would like and thus in some cases it is possible that the retailer may
allow a customized product to be delivered.
 An example of this is on the Dell site. The computer site allows
shoppers to custom specify their own computer software and
hardware configurations. Thus, the customer is able to select exactly
what he wants. This ability to get the business to deliver a product
that the customer specifies he wants is the essence of C2B e-
commerce.

5. Shopping anywhere, anytime:

 The customer can shop anywhere at any time around the globe
without being restricted to his local vicinity.

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To the business:
The numbers of benefits of e-retailing to the business itself are:
1. Global reach: The retailer now is no longer restricted to customers who are
able to reach the store physically. They can be from anywhere around the
globe. The retailer must, of course, deliver the goods of a purchase to the
customer.
2. Better customer service: The use of e-mail and the use of electronic
interchange of messages between the customer and the retailer allow better
communication between the customer and the retailer.
These allow one to easily field inquiries and deal with complaints.
These also allow a much more rapid response time than was possible in the
days of faxes and postal mail.
3. Low capital cost: The retailer does not have to maintain showrooms, he
can probably have lower inventories. Thus, while Amazon.com lists over a
few million titles, it keeps an inventory of a few thousand best selling titles
only. Therefore, the retailer has lower warehousing costs. He does not have
to have many shop assistants who are physically answering questions and
showing the customer goods.
4. Mass customization: Based on requests by the customers, the retailer is
now able to carry out mass customization with reduced time to market for
the customized products.
5. Targeted marketing: The retailer is now able to pick on a specific targeted
group of customers and direct marketing towards these customers.
6. More value-added services: The retailer is also able to provide more
value-added services in the way of better information, add-on services to
basic services, or add-on options to products that he is selling.
7. New forms of specialized stores and niche marketing: The retailer
consists of different new forms of specialized stores that he is now able to
utilize.

KEY SUCCESS FACTORS

1. For traditional retailing:

The key success factors for traditional retailing are:

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 Size: The larger the retailer, the greater the buying muscle and therefore
the lower the price for procurement.
 Number of outlets: The number of outlets also allows the retailer to
spread the purchase costs over a larger inventory.
 Visibility: The number of outlets also allows the retailer to spread the
purchase costs over a larger inventory.
 Location: Location is an extremely important success factor in
traditional retailing. The retailer may choose to be sited in the central
business district, in a regional area, in a shopping complex, or in a street
of shops.
 Store atmosphere: Store atmosphere evokes a particular look and feel
about the retailer and is therefore important to the positioning in the
market.
 Store layout: Store layout is important in creating an atmosphere but is
also important in ensuring that one groups different sets of products
together, so that the purchase of one product will frequently lead to the
purchase of another, thus allowing for cross selling.
 Price: price is important and here it is not necessarily the cheapest price,
but the price which is consonant with what the customer expects to pay
for the goods.
 Variety of goods: In the case of a large store, particularly of a
department store, is also important because a customer would come in
looking for one set of goods and then choose to purchase others.
 Profit margins: It is a measure of profitability
 Turnover: The amount of money taken by a business in a particular
period.

2. For e-retailing:
The success factors of traditional retailing translate to e-retailing.
 Size: The important point to realize here is that no matter how large the
company is your e-store presentation is still limited to the size of the
computer screen, which may be, 15 in.
 Number of outlets: It is not necessary to look at number of outlets in
cyberspace because you probably need only one web site set up. Also it
is important that the number of links from other important sites to your
web site which is far more important.

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 Visibility: When looking at visibility, the important point to realize here
is that most people find information on the internet through the use of
search engines. Therefore, it is very important to register the web site or
e-store with the most common or the most widely used search engines,
such as chrome, Yahoo, etc.. It is also important to link your web site
with other well-known web sites that have similar interests, or major
portals such as Yahoo, which link back to your e-store. This can greatly
increase the visibility of the web site.
 Location: The geographic boundaries no longer exist. A local e-store
and a foreign e-store are both just “one click” away.
 Store atmosphere: Store atmosphere is particularly important on the
web. The “look and feel” of the web site should match with the
company’s image as well as the market position that it seeks to address.
Thus, if you are selling very up-market clothes your web site for these
stores should have a sophisticated look and feel about it. On the other
hand, if you are selling other kinds of goods, you could choose to have a
slightly more jazzy image on your web site. The front page or the
homepage of your e-store is particularly important.
 Store Layouts: The advantage of using store layouts in the e-store is
that the layout can actually be made dynamic and be determined by the
customer’s interests. The customer’s interests could be obtained from
data mining his previous purchases at the e-store.
 Price: it is very important in cyberspace because the customer can easily
carry out comparison pricing between your e-store and other e-stores not
just in your immediate neighborhood but all around the world. Also
some e-brokers provide agents or services that carry out comparison
pricing; therefore, the customer can easily find the cheapest price.
 Profit margins per item tend to be lower with e-retailing, and so
turnover must be higher.

MODELS OF E-RETAILING

There are several models for e-retailing and these include

1. Specialized e-store

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2. Generalized e-store
3. E-mall
4. Direct selling by the manufacturer
5. Supplementary distribution channel
6. E-broker
7. E-services

1. Specialized e-store

The first class of model in e-retailing was the specialized e-store and they are
two kinds of specialization: The more traditional specialization along product lines and
specialization by function.
When you have specialization by product line, essentially you have a store that
decides to pick one particular product line, say books, flowers, CDs, clothes, and sells
only this particular product line. It may also choose to position itself in a particular part
of the product line, e.g. clothes; it could choose to position itself at the very expensive
end of the market selling brand names. Alternatively, it could do more mass marketing
by selling non brand names at a much lower price, or it could go into discount selling.
Specialization by function: a new kind of specialization is emerging on the
internet, as mentioned earlier, namely specialization by function. A good example of this
is lastminute.com. Generally, when one purchases an item at a very short notice (e.g.
travel), he often pays a premium, which is an extra amount for the convenience of
booking the travel at the last minute. In lastminute.com they sell gifts, travel tickets, and
other items for last minute shoppers who want to purchase these items at a very short
notice.

Case study: Amazon.com, 1-8OO-Flowers, CDNow

Basic features of an e-retailing system

Features of e-retailing web sites are:

 A method for selecting your purchases (e.g., Amazon.com provides a shopping
cart facility).
 A mechanism for creating and submitting an order.
 A secure e-payment facility for your purchases.
 An appropriate distribution mechanism, which has to be carefully thought out for
the particular category of goods that are being sold.
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 A browsing facility, normally by subject or by category.
 A searching facility, which will search for a particular good that you need.
 A mechanism for customer service and feedback.

Specialization by function – lastminute.com

2. Generalized e-stores
 Generalized e-stores sell a large number of product lines rather than confining
themselves to just one or a very few product lines.
 First we examine Value America as an example of a generalized e-store that
markets only through the internet and does not have physical stores to support it.
 In contrast, we see Walmart which started as a physical store and then moved on
to utilize the internet as an alternative mechanism or channel for selling.
Case Study – Value America, Walmart.

Case study: Value America, Walmart.

3. E-mall
 In an e-mall, cyberspace is rented out to cyber e-stores that wish to sell
their goods.
 This store could be a specialized or generalized e-store. So, several product
lines can be present in a single e-mall.
 However, unlike the generalized e-store which is under a single unified
management, in an e-mall, each store is under its own management.
 E-mall management is responsible only for creating the cyber sites that can
be rented and can support services and marketing of the mall. It, thus,
provides a web hosting service.
 Several e-malls also provide software tools, which can be utilized by a
prospective e-store to create and maintain its e-store.
 The advantage for an e-store is that it is grouped together with other stores
in a well-known e-mall site and, therefore, is likely to pick up visitors to
the mall.
 Well-known examples of e-malls are Yahoo!Store and CNET stores.

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Case study: Yahoo!Store

4. Direct selling by the manufacturer

 A number of manufacturers with well-known brand name products have
chosen to use the internet to carry out direct selling via the internet.
 One of the best known here is Ford, which utilizes the internet to achieve
direct selling but uses its dealer network to facilitate distribution and
delivery.
 The other wellknown examples are Cisco systems and Dell computers.
 This approach permits mass customization to meet customer preferences.
 This direct selling by the manufacturer has an important disintermediation
effect leading to reduced costs to the end customer and increased
profitability to the manufacturer.
 A note of caution is important here.
 By and large, this approach can be used by manufacturers of well-known
brands of products because the customer already knows the product.

5. Supplementary distribution channel

Several retailers that already have a highly successful “bricks and mortar”
operation have turned to the internet and created an e-store.
They have several motivations for doing this and these include:
1. Fending off a challenge by an aggressive e-store in their line of product. An
example of this is Barnes and Noble’s response to Amazon.com’s success in
grabbing market share or Toysrus.com as a response to eToys.com.
2. Providing an additional sales-ordering mechanism.
3. Enhancing their service, such as customer service operation, through the
internet.
4. Providing a mechanism of drawing people into their physical store as these
could often be used for delivery and distribution for products sold on the
internet.

Here, there are several different ways in which a bricks and mortar company could enter
the e-retailing world. It could

1. Integrate e-retailing into its business, e.g. Dell, Cisco, or Ford.

2. Create an e-retailing subsidiary, e.g. Toysrus.com and Barnesandnoble.com.
3. Develop an alliance with an existing e-retailing company, e.g. Petsmart.com.
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Case study: Barnes and Noble

6. Brokers or intermediaries
This class of e-retailers is essentially an extension of the notion of a broker from
the physical to the cyber world.
A broker is an intermediary who
 May take an order from a customer and pass it on to a supplier.
 May put a customer with specific requirements in touch with a supplier
who can meet those requirements.
 May provide a service to a customer, such as a comparison between goods,
with respect to particular criteria such as price, quality, etc.

Case study: anewShop.com, Priceline.com, mySiirnon.com.

Features of e-retailing

The most important features and these include:

1. The provision of an on-line catalog, which allows one to browse through different
categories of goods. Thus, it is dynamic and linked with order process.
2. The provision of a search engine, which is a very important feature that does not
exist in traditional retailing.
3. The provision of a shopping cart, which allows convenient goods selection. An to
provide an automatic price update.
4. Personalization of store layouts, promotions, deals, and marketing.
5. The ability to distribute digital goods directly. Thus, these goods can be
downloaded instantly.
6. An on-line customer salesperson, “who” can help customers to navigate through
the site.
7. An order status checking facility, which is a useful feature before submission.
8. The use of Forums (collaborative purchasing circles) to create a customer
community and thus increase “stickiness.”

The future of e-retailing:

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1. Technologies that help you see and experience the product better, e.g. virtual
reality, Java 3D, etc.
2. Technologies that help you not to see at all but use an intelligent agent (or reality,
Java 3D, etc. mobile agent) that does all the shopping tasks for you.

Developing a consumer oriented e-commerce system

Software engineering is the discipline associated with building software

systems. Software engineering has been progressively maturing as a discipline.

It has moved through description techniques, which characterize aspects of

control, through data flows, and eventually through methods that capture both structure
and behavior.

Figure(3s): Three-stage modelling of software engineering process

The emergence of object-oriented, component-based paradigms have allowed one to
characterize a wide range of real world systems as the first step in constructing a
software system. Dillon and Tan have characterized the software engineering process as
a three-stage modelling process, as shown in Figure(3s). The following are the three
models of interest:

1. Conceptual model
2. Software structure model
3. Code model
The conceptual model, which is the output of the analysis phase, is essentially
a description of the relevant features of the real world using an expressive set of
constructs. Here, no attention is payed to the implementation media or tool to be used to
build the system.
The software structure model, which is the output of the design phase, must
pay careful attention to the constructs available in the implementation medium as it
essentially forms the blueprint for implementation.

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Different categories of systems such as traditional procedurally oriented
systems, database systems, and knowledge-based systems can be described by object-
oriented and components-based models, during conceptual modelling and software
structure modelling.

The emergent business model as the basis of e-commerce system development:

The creation of an e-commerce system presupposes a new way of doing business through
the internet. This factor implies the following:
1. In the case of an existing “old economy” business, one would need a fusion of the
“old economy” business with the new business leading to a metamorphasis of the
business model. We call this new business model “An Emergent Business Model”
or “E-business Model”.
2. In case of a start up without any previous business operations, one would go
through a nascent process to create an emergent business model or e-business
model.
This building of an emergent business model requires a description of the
associated business processes.
A business process can be defined as “a set of logically related tasks performed
to achieve a defined business outcome”.
On examining the first case, we note that it has some similarities and some
very important differences from Business Process Reengineering (BPR). BPR is
essentially aimed at a “radical redesign of business processes to achieve dramatic
improvements in critical, contemporary measures of performance such as cost,
quality, service, and speed”. The metamorphosis process leading to an emergent
business model involves a transformation of the business processes to effectively
incorporate a new way of doing business through the internet. It frequently
involves
1. The addition of new products and services, such as the sale of information.
2. Introduction of new sales and marketing modes.
3. Automation and streamlining of the backend processes to mesh with these.
4. Movement from mass production to mass customization.
5. Linking of the marketing process to ordering.
6. Targeted marketing.
7. An electronic payment system.
8. Customization and personalization.
Thus, one not only moves to reduce costs and improve efficiency but also
adds new products and introduces new sales and marketing modes with a
completely different reach from those that existed before. This is why it is
important to distinguish the emergent business model from a purely
reengineering business model.

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Process-oriented e-commerce development approach:

An important first step in developing e-commerce systems is the definition of
an emergent business model. This requires
1. A clear choice at the outset of the type of e-commerce system that is going to be.
2. A definition of the goods and services that will be traded or some combination.
3. A clear definition of the market mechanisms that will be adopted. For example,
will the e-commerce system:
 Carry out direct selling.
 Act as intermediary or agent passing the orders onto someone else for order
fulfillment
 Provide a virtual market where sellers and buyers could trade.
 Act as a partial outlet for a bricks and mortar company.
 Provide a fixed pricing structure or permit a request for quotation structure.
 Carry out cross selling.
 Provide an auction or reverse auction facility.
 Define an e-payment mechanism.
4. One next needs to determine the type of goods and services that are to be traded.
5. The mechanism for order fulfillment and distribution has to be carefully worked
out and this has to be appropriate for the goods being traded.
The next step in the overall scheme is to define the business processes involved. This
requires a very clear delineation of
1. The set of logically related tasks.
2. The intended functionality of each task.
3. The sequencing in time of these tasks.
4. The preconditions that apply before a task can be carried out and the post
conditions that apply after it has been carried out.
5. The information or data required by each task.
6. The exception conditions that could arise.

Steps in the development methodology:

The steps in the analysis, design, and development of an e-commerce system
can be summarized as follows:
1. Develop description of existing business model
2. Develop e-business model
3. Develop requirements statement through analysis; this leads to the
conceptual model of the system.
4. Choose system architecture and implementation platform(s).

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5. Carry out design to develop software structure model including software
architecture.
6. Develop detailed design, including web U1 interfaces, databases, system
integration aspects with legacy systems.
7. Programming and customizing the system.
8. Testing and piloting the e-commerce system.
In Step 3, besides the normal conceptual model with object property diagrams,
sequence diagrams, or other dynamic representation, it is also important to.
 Develop a category hierarchy and structure for the goods and services
being sold.
 Define the search and browsing capability, e.g. browse by category and
search by keywords.
 Define a goods selection mechanism such as a 1-click, shopping cart, etc.
 Define a careful purchase requisition and purchase order submission
process.

The Pass* Model

 How to make a B2C e-commerce web site can really “make cents.” We call the
revenue model: PASS (i.e., Publicity, Advertisement, Sale of goods/services,
and Subscription).
 In the early days, electronic payment methods were not mature enough to
support B2C e-commerce. At that time, companies usually set up web sites for
publicity reason. This is an indirect way of generating revenue because the web
sites may lead to sales possibly through physical commerce.
 For web sites with significant number of visitors such as Yahoo, advertisements
provide a good source of income. Again for most companies, these are indirect
income.
 Now with the advent of SET and other electronic payment methods, companies
can carry out secure transactions particularly payments directly on the internet.
 This is a more direct way of generating revenue.
 Finally, subscription is a means of generating constant revenue. However, this
may be difficult to implement unless you have very attractive products/services.
 For example, some well-known newspapers and magazines do offer
subscription services. While the web sites are open to the public, certain parts
are restricted for subscribers only.

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