eCommerce

The Single Channel e-Tailer

2008-05-20T07:36:00Z

The single channel e-tailer is the standalone company selling their wares online. While this is a common eCommerce business model these folks can have a hard time competing with the conglomerate e-tailers and the big box stores out there.

This site sells one product, or one type of product or a single brand. You'll find examples of these that adhere to the clicks and bricks methodology and some that are online only. They often excel at niche marketing, focusing on a specific demographic and look and feel that will appeal to their target consumer. These sites also focus on offering the best and most innovative products and excellent customer service to differentiate themselves in the marketplace.

Sites like these will often use conglomerate e-tailers and shopping portals as marketing initiatives while working specifically on branding and standing out among their competitors on their own websites to increase direct traffic.

http://www.avenabotanicals.com/

Avena Botanicals is a small e-tailer of organic medicinal herb and bodycare products. They have a small, niche web presence and they operate as a B2B and B2C presence. Their marketing efforts are specific and niche oriented and their presence in physical storefronts through their B2B relationships is a primary driving force in their branding. Once they secure customers through their presence in physical stores, consumers can return to the store or purchase their products online. In some instances, if people can't purchase exactly what they need, they can also go to the website to access the full array of products.

http://www.brooklynindustries.com/

Brooklyn Industries is a great example of a clicks and bricks niche e-tailer scenario. They have specifically geo-located stores in and around the Brooklyn area and their simple and trendy web presence which serves to solidify their brand and offer their wares to anyone unable to hit a physical storefront. This allows them to promote their local locations and ultimately will help them grow their business as their online presence grows more profitable.

http://www.davidandgoliathtees.com/

Message and printed t-shirts have been hot for a few years now and David and Goliath take their messages to the edge of propriety...and occasionally beyond. With a couple of stores in specific locations - like Las Vegas - they clearly market to a young, hip and slightly off color crowd. They also engage in B2B relationships with other clothing websites out there, offering David and Goliath tees to a wider audience and ultimately drawing traffic to their own site.

The Conglomerate E-tailer

2008-05-16T07:57:00Z

In this model, a single website will pull from multiple brands and companies and sell through one single portal. Amazon.com is a great example of this, as is Overstock.com which focuses on discount products and extra inventory. In the clicks and bricks category of conglomerate e-tailers, we can look at monsters like Target.com, JCPenney.com or Walmart.com.

The information comes into these sites in various ways - and this is when we get into the nitty gritty of IT and Marketing coming together in the Vulcan mind meld. In the example of Target.com or JCPenney.com, these department based stores essentially offer their products in the online environment much as they do within their brick and mortar storefront. Their supply chain and their product information is already highly organized and is merely translated by their inhouse team onto the web. (heh. Merely...)

In the case of an Amazon.com or Overstock.com, smaller e-tailers literally create feeds of the products they want to offer through the conglomerate website, and the products are then offered within the category schema of the larger website. Although the transaction goes through, for example, Amazon, when you buy an item, it may actually ship from the original e-tailer. Amazon gets their cut, the e-tailer gets the benefit of the traffic and marketing power of Amazon and the consumer gets the benefit of finding what they wanted easily on Amazon and enjoying their simple, secure checkout process.

This model requires advanced technology to offer feeds into the conglomerate and smaller companies need to ensure that the profit margins work - but the benefit is the trust these types of companies have already established with consumers. While some might think this sounds very much like an affiliate program or a comparison shopping engine, these sites are different because you will always check out through the conglomerate website ensuring that, at the end of the day, their brand further saturates the market - not that of the smaller e-tailer.

http://www.amazon.com/

It almost goes without saying that Amazon is an incredible example of a site that sells across brand and industry. They bring in feeds, the partner with other companies, they offer user reviews, their checkout is easy and secure and they pay attention to what you buy so they can offer suggestions of what you might like in the future.

Even if you don't buy from Amazon, you can probably do research and find enough information on the site to make an informed decision. Not only are they a conglomerate e-tailer, they are also an information provider.

http://www.overstock.com/

Overstock.com is another excellent example of a conglomerate e-tailer, bringing together "over stock" from multiple stores and brands and selling their goods at a discount. The high end look, excellent shipping rates and security of the site have secured their success.

They, like Amazon, contract with many smaller e-tailers and offer products on the site via a feed.

http://www.bluefly.com/

We consider Bluefly.com to be an example of a conglomerate e-tailer because they sell multiple brands from multiple providers - but they are niche in that they specifically sell designer clothing.

With a great niche and smart marketing through venues like Project Runway, BlueFly.com is positioned well to offer designer clothing and accessories in a new way and it has become a go-to website for fashion followers everywhere.

Service Based Websites

2008-05-01T03:51:00Z

In this model, the company is offering a service to customers through their web site. This could include services of graphic designers, marketing companies, home furnishing services like carpeting or even financial transactions like the buying and selling of stocks. There is sometimes crossover with the Advertising model if a website is offering a tool as a free service and profiting from web advertising revenues but for the sake of this information.

eCommerce Service companies can come in a variety of shapes and sizes. For example local businesses in your area could fit into this model as they use their online presence to draw local web traffic, book appointments or even to complete transactions.

These sites can be very text heavy, to achieve the listings in the Search Engines they need, or they may be interactive, offering a tool to plan the layout and décor of your home. They can be large or small, like your local service business web presence which is mainly there to draw traffic to their physical service location.

http://www.freecreditreport.com/:

FreeCreditReport.com is an excellent example of a service provider web site. They gather the credit scores from all three agencies and put them in one place, create a usable analysis of that information and provide other tools and services to protect or improve your credit.

The site even goes one better and simultaneously offers space to financial and loan company advertisers so they make money from subscribers and advertisers. This service provider actually offers the service online and you can access the information immediately upon payment.

The lines here get a bit blurry, because in reality, their reports are a product that they sell, but because they are not necessarily shipping you any goods, we are identifying them as an eCommerce service provider.

http://www.seo.com/

This is a great example of a straight up service provider website. They offer SEO services to companies all over the web. The site is simple and content rich, explaining their offering resources and finally, their call to action is to Request a Proposal.

They use their website to draw traffic into the business, which is physically located in one location but can service companies nation and even potentially worldwide.

The site is rich in text and information offering useful resources, but it is not cluttered or weighed down with anything other than the simple call to action. Their services and transactions are conducted offline.

http://www.edmunds.com/

Edmunds.com is a fantastic informational resource and service provider for car owners and buyers. They offer the ability to find new and used cars in your area and they offer end user reviews and information about makes, models and safety.

They have an interesting combination of information and advertising as well as services for finding the vehicle, finding insurance and finding a car loan. Edmunds.com also has a booming virtual community full of enthusiasts that chat over makes, models and features.

Edmunds is a fabulous hybrid example because they truly use every revenue stream available but all in the name of creating a positive user experience.

GoDaddy.com is a hosting service provider - their product is URL and hosting for websites. Their website is not purely informational in relation to their service because you can also complete transactions and manage your domains and even your website through their portal.

This is another good example, like FreeCreditReport.com of a service provider who has to have all of the functionality of an e-tailer eCommerce business model but who is truly providing a service rather than a physical item.

Like FreeCreditReport.com, Edmunds offers valuable consumer information as a service provider, but they have intelligently incorporated not only advertising but partnerships with related service providers of car loans and insurance - not to mention the car dealerships that send Edmunds information about what cars they have on hand.

Supply Chain Management - Tasks necessary to obtain, move, transport, process, and deliver goods from vendors, through manufacturing to the final customer.

Supply chain management in the service website can be very much like that in the advertising model. If the service is information, the supply must be on tap at all times. This means that any technical feeds, news feeds, RSS Feeds, content production or other information resources must be maintained at all times so that the reader or customer can get up to the minute information. Edmunds.com is the best example of this. They need constant updates from car dealerships as to which vehicles are available and as they have honed their own search functionality they have added to and customized the information they need from the dealers. Likewise they have relationships with insurance companies from whom they need specific information and they have car loan companies that need to supply information as well.

Edmunds.com also needs to make sure the subjective or review content they provide is up to par. In this case, all of these various sources of information are the "supply" that must be maintained.

From a technical standpoint, you'll need to ensure/consider that you have:

A standard feed technology into which dealers and providers and submit information that will be accurate and will meet users needs.
Content Management Solution to manage user reviews and content provided by the website.
Advertiser tracking software
Accounting program to manage financial partnerships
Consumer feedback tool

If the service is the product, like GoDaddy.com, the supply is actually more complicated. GoDaddy.com has to manage the domains that its customers have purchased. They have to maintain not only the website, but the portal that allows customers to manage their domains and the servers necessary to support other websites. They have to maintain a large customer service organization and information relating on site usage for beginners and advanced users. They also have to maintain the search functionality to help users determine the availability of a particular domain and they need to accept user and customer feedback and constantly improve the site's functionality. As GoDaddy has grown, they have also added services relating to their domain purchasing clientele including marketing tools, eCommerce and merchant based tools, domain auctions and more. In this case, GoDaddy.com must maintain the supply chain on all of these services, whether it be the information relating to the availability of domain names or the services themselves, email availability, the speed of the site overall to handle the traffic of all of their users and website managers, the human element to ensure quick turnaround of service based customers and they are constantly striving to add more.

From a technical standpoint, you'll need to ensure/consider that you have:

Robust Database technology
Robust hardware investment
Integrated customer service management, accounting, marketing and end user account management functionality
Fast and efficient web technology that is scalable to meet the needs
Lead and feedback submission tools to physical staff
Email marketing functions tied into the database for automated update and notifications
Shopping cart functionality and credit card processing
Robust site security
Advertiser/Reseller Management Program

Product and Process Design Management - Tasks required in the design and development of products and processes used in both manufacturing and service applications.

Developing the product and process related behind these Service related sites can be simple and can be incredibly complex. In a site like Edmunds.com they have designed the site in simple sections. You can look for new cars, certified cars, used cars and then you can access information like Car Reviews, Tips and Advice and then you can access service providers in Insurance and Finance and you can access the user community or forum.

The basic user process could be: select make/models to research and compare > assess costs > assess consumer satisfaction and reviews > review financing options and insurance costs > make informed decision > share information with other consumers.

To that end, they have their "product" offerings designed to help people along in that process while exposing them to partners, advertisers and building trust with impartial reviews from professionals and consumers. They also effectively cross link their "product offerings" but each can stand on its own.

The one consistent theme is credibility - so that wherever you see an advertiser or a partner, you are also seeing general consumer information that will help you make an informed decision. They have designed the content and the site around this credibility.

We could group these into various "product" offerings:

1)      Search: for New Cars, Certified Cars, Used Cars

a)      You can find a car near you and identify various dealerships quickly.

b)      Design/Process of search behavior. Edmunds.com offers browsing by category or by make and it offers additional potential search initiators like "2007 Consumers Most Wanted," "2008 Lowest True Cost to Own," "More Best Car Awards" to help consumers. Once you have identified the make(s) and model(s) of the cars you are considering, Edmunds.com is already prepared with tools to help you further research your decision.

c)      Edmunds.com offers useful tools relating to price quotes with and without options, warranty information, car comparison tools and information about incentives and rebates. They link to resource articles about road tests and new model reviews as well so that a consumer can look at a vehicle, consider the pricing and options, read reviews and find the best deal possible, all before setting foot in a dealership. In this sense, they offer you the tool to look at and identify makes and models, they then offer a tool to find them in your area and then they offer you additional information critical to your decision making process.

d)      Edmunds.com identified the process a car buyer does/should go through and they created a series of tools, information and processes to support that.

2)      Access Information: Car Reviews, Tips & Advice

a)      This section is designed for getting even more information about a car in which you are interested. There are both Edmunds.com generated car reviews and consumer reviews as well as Buying Guides, Best Car Lists, Photos, Road Tests and more. Again, this is designed with the consumer in mind, whether they want "best car lists" or visual information or information about how the car drives. They also build credibility by hosting consumer reviews from real people as well.

b)      Edmunds understands that consumers come at information and the initial part of the buying decision from many different angles. This section is designed to be consistent with the New Cars and Used Cars sections in that it is organized by Vehicle Type, Price and Feature and then you can look at makes and models.

c)      Edmunds has also designed information specific to demographic groups. There are guides about eco-friendly cars, young drivers, women and family drivers. The content served up is both generic and niche specific, thereby serving their huge audience (car drivers) effectively.

d)      Tips & Advice offers good generic questions and quick pieces of information to help car buyers. "10 Steps to Finding the Right Car For You" and "Spotting a Good Lease" help with specific topics and again, help consumers to wade through the glut of options in the industry and the industry hype to find the vehicle right for their circumstance.

3)      Service Providers and Information: Insurance and Finance

a)      The Insurance and Finance sections are interesting because they really integrate the consumer information that you also find in the review section and the tip and advice section with partner providers so the consumer can apply for insurance or financing options right then and there. They are able to maintain credibility, offer quick access to other service providers and profit from the setup.

4)      Community

a)      The community aspect might seem like an investment in resources that does not directly benefit - but by offering community members the ability to speak with each other and talk about common issues they bring people back into the site and generate a community and participate in valuable viral marketing for their advertisers. This also encourages people to post information about their experiences and ultimately feeds back into the credibility of information on the website.

From a technical standpoint, you'll need to ensure/consider that you have:

Analytics to test overall success of product/site design and usability as well as to measure marketing results.
Robust database for cross linking within a site with deep informational resources
Robust search functionality
Consumer feedback mechanism/tool
Software for the integration of partner tools

Purchasing Management - Tasks related to setting up, running and monitoring purchasing activities of an organization.

In the case of purchasing management within a service based website, the company needs to ensure that its paid resources and purchasing processes are in alignment. Essentially, if we use Edmunds as an example again, they need to ensure that any content they need to purchase is lined up and ready and that the revenues related to the content production (SEO results, popularity) are in fact sustaining the investment.

If we are talking about a service organization using the web as a portal for advertising their business, they need to ensure that all service related resources are available, whether that is any sort of reporting, tool used in conducting the service, supplies etc.

From a technical standpoint, you'll need to ensure/consider that you have:

Accounting solution to manage purchasing and forecasting
Analytics to watch for seasonal, traffic and industry trends for enterprise planning
Analytics to measure success factors of purchasing
Credit card processing

Forecasting and Scheduling Management - Tasks relating to the management of the analytic process of determining customer demand including determining the demand on internal OM processes.

With all companies, forecasting and scheduling management are critical. Seasonality, changes in the market and current events can all directly impact service organizations. All of these service organizations need to be able to maintain security and functionality no matter the fluctuations in traffic and customer acquisition. Primarily this means maintaining accurate means of traffic and purchasing.

From a technical standpoint, you'll need to ensure/consider that you have:

Analytics to measure and analyze traffic
Accounting System to manage customers and service purchasing and accurately forecast trends and seasonality

Inventory Management - Tasks relating to the acquisition, maintenance and delivery of inventory to destinations inside and outside production operations.

Inventory management, in relation to items, is not germane in a discussion about service based websites but staffing, feed management and content generation are concerns which could be considered the "inventory" of a service based website.

Accounting System
Content Management System
Analytics Tools
Human Resources Management

Quality Management - Tasks required relating to the maintenance of product or service quality in finished products an organization provides to customers

Human Resources Management - Tasks relating to the planning, organizing, staffing and directing human resources.

Reengineering and Consulting Management - Tasks relating to the management of the restructuring of production processes in an effort to improve efficiency.

The EBS Introduction to eCommerce Business Models

2008-04-30T01:57:00Z

eCommerce is such a huge topic. Tackling it in any sort of organized fashion is going to be difficult, so what we've done is created a series of articles based on business models that will serve as a launching point for various topical discussions. This means that whether you are an individual e-tailer or an advertising site, you'll find information about technology, IT, marketing and traffic generation.

One thing that is important to note as we discuss eCommerce business models is that most sites on the web do have some crossover. It is very rare to find a site that is purely operating a single business model at any time. What we've done here is looked at a number of ways you can make money on the web -and we have offered example websites that have used a primary business model to become profitable.

Additionally, these are business models we've identified that can cross over from B2B or B2C, they may hold inventory, drop ship or do both, they may have POS systems in place if they are bricks and clicks and they may use RFID technology and advances warehousing.

They may also be tiny businesses that operate out of a home or small office space, managing multiple web software applications and cobbling them all together with staff. They could be service providers that merely use their web presence to drive traffic to their organization.

The beauty of the web is that you can start with an idea, or a product and you can build your business model almost as you go. You'll see websites that started as web only and have now opened successful branch stores to further their brand. You'll see boutique stores that have launched a website which has then generated traffic nationwide which prompted growth in all facets of their business. You'll see manufacturers capitalizing on low overhead by selling direct to consumers while managing their relationship with their B2B customers.

Web business is by nature quixotic and it prompts out of the box thinking.

Why stick to advertising only revenue when you can offer a service to subscribers?
Why only offer banner ads when you could also generate affiliate commissions?
Why sell only shoes when you could capitalize on your supply chain and shipping strengths and sell apparel and accessories as well?

The options are endless as people come up with more and more creative ways to market, brand and drive traffic to their websites all in pursuit of making online shopping the experience it should be.

That being said, the matrix of business models out there can get pretty complex. We've tried to come up with some simple categorizations that can be applied to a lot of the businesses out there as well as some basic success factors that should be assessed within the context of those business models.

Business Model	Examples Highlighted
Advertising Websites and Information Providers	www.cnn.com www.Ezinearticles.net www.webmd.com www.gawker.com
Service Websites	www.Edmunds.com www.freecreditreport.com www.seo.com www.godaddy.com
Conglomerate E-tailer	www.Amazon.com www.overstock.com www.jcpenney.com www.bluefly.com
Single Channel E-tailer	www.avenabotanicals.com www.brooklynindustries.com http://www.davidandgoliathtees.com/
Sales Portal	www.shopzilla.com/, www.bizrate.com/, www.pricegrabber.com www.dealcatcher.com

Advertising Websites and Information Providers

2008-04-28T15:02:00Z

In this eCommerce model, you will usually see a company offering some sort of free service, tool or information and their revenues are generated through advertisers. They may use Google AdSense or they may develop advertising packages where companies can place banner ads, text ads or other advertising throughout the site for a specific fee.

Traffic is the key to the success of this model - page views and clicks through draw advertisers so the service or information must have real value. These could be local newspapers, blogs that cover specific topics or informational sites.

In many ways, the product is the information in these cases, so the best sites that depend on this model are those that have real experts generating content or excellent writers. In some case, poor sites can manage to get good listings in Google and still manage to make a profit, but that just means the door is open for real information providers to jump into the fray.

Some good examples of the advertising model:

http://www.ezinearticles.com/

EzineArticles.com is an interesting content portal. It is based on the tenets and success of article marketing, a concept where companies or writers syndicate their work throughout the web to generate public relations benefits and inbound links back to their home website.

EzineArticles.com encourages authors to submit their work and then, as they publish articles, contextual ads are pushed onto the pages as well. The sheer volume of content provided on this site helps it to generate traffic. The only downside is that this is syndicated content, rather than purely original which means it won't secure the same success as a site that generates only its own information.

http://www.webmd.com/

WebMD.com offers an information portal related to health issues. The site caters to all ages and covers a great many topics. The right column of the site offers various spotlight articles on health concerns and also advertises medications that relate to those conditions. For instance you might see a sleep poll that is brought to you by Tylenol PM or a blurb on bladder control that is sponsored by Novartis, the makers of Enablex. You can then click through and see a profile page of a specific drug.

On other parts of the site, they also have rotating banner ads with information relating to other medications. They offer full disclosure about their Sponsors so you can identify sponsor or sponsor influenced content.

http://www.cnn.com/

CNN.com is one of the largest web news portals out there and they maintain their website through advertising revenues. You can find a rotating banner ad above the fold on the main page and you'll find text ads below the main story. For the most part, these are contextual ads as well, fed through an advertising service like AdSense.

http://gawker.com/

Gawker.com is a great example of a niche information or gossip site. They are powered by advertisers as well - some are the companies or individuals about whom they write. This is a niche website, really geared towards New Yorkers and the media players in that city. While they have a self limited readership, they have loyal readers and niche advertisers so the relationship is successful for everyone involved.

Critical Success Factors

Purchasing Management - Within the advertising eCommerce business model, the content itself is the product, therefore it is imperative that you have resources from which you can purchase or solicit content. In some instances, you can position your advertising portal with forums in mind, generating an additional channel for the production of content, as well as securing the potential of return visitors to the website.

Monitoring the process of hiring and assessing the success of the writer and their content is the other piece of purchasing management as the quality of the work, timeliness of production and delivery and the prompt payment of your resources will correlate directly to the success of the site.

From a technical standpoint, you'll need to ensure/consider that you have:

Content Management Solutions
Analytics to Assess Content Popularity (and therefore author or developer) and Success
Methods to Solicit Service Providers
Accounting Software to Gather Critical Service Provider Data and Payment Reporting Data
Reporting to Optimize Purchasing Process

Supply Chain Management - In the advertising model the supply chain, like the purchasing management, relates to the content itself, or the technology necessary to support the success of the website. If you have a tool, like Edmunds.com for finding cars, your supply chain management is going to relate to finding the right developers to build the tool, securing relationships with car dealers regionally, getting the data to your website and providing that data to the customer.

Likewise if you are a different brand of information portal, you need to obtain the information, ensure that is of high quality, publish it to the website properly and thus provide it for the end consumer.

From a technical standpoint, you'll need to ensure/consider that you have:

Primary Assessment of Extensible and Flexible Development Platform and Code Structure
Tools to manage (Content Based Advertising Site):
- Editorial Process and Feedback Loop of Content
- Publishing of Content
- Feedback on Content
Tools to manage (Tool Based Advertising Site):
- Feedback on Tool
- Enhancements/Additions to Tool
- Functionality of Tool
- Delivery of Tool Online at Optimal Speed

Product Design and Development - The product design and development stage within the advertising model relates to the tone and content of the site and identifying the consumer niche to which you wish to appeal. You'll want to have an initial niche identified at launch and then you'll want to pay attention to your users to identify subtopic and sub-niches that are of interest.

For instance, WebMD.com is appealing to almost all people and publishes content related to health topics of all kinds. As holistic medicine has increased in popularity, they have worked to design and develop content relating to that topic to ensure they are appealing to that subset demographic.

From a technical standpoint, you'll need to ensure/consider that you have:

Forum Capability
User Feedback Solicitation
Data Architecture that Allows for Growth and Evolution
Content Management Solutions
Subscriber Ability to Niche Subtopics

Forecasting and Scheduling - Estimating Demand and Preparation - In the advertising model, there needs to comprehension of demand relating to both traffic and advertising. As you grow the site with rich content, the traffic will exponentially increase and you must prepare the site for that onset, ensuring that the site speed is maintained.

Also, as the traffic increases, so will the demand from advertisers so you must ensure there is space for advertising to fill that demand as well as ensuring that the quality of clicks through and page views is maintained to offer good value to both consumer and advertiser.

From a technical standpoint, you'll need to ensure/consider that you have:

Analytics to Assess Traffic and Content Popularity
Reporting on Seasonality
Server and/or Hosting Management to Ensure Speed and Functionality of the Site
Reporting on Advertising Clicks Through, Page views and transactions to maximize value to all "customers"

"Inventory" Management and Control - In the advertising model, inventory becomes the content of the site. It must be consistent and of good quality to ensure repeat visitors to the site and to build a loyal following.

In some cases, you may want to manage your content in such a way that you have items to publish several days ahead but in the case of a news organization, you'll need to manage your inventory on a day to day or even hour to hour basis on the internet. In this case, inventory, or supply also relates to the speed of your site and its ability to handle burgeoning traffic.

From a technical standpoint, you'll need to ensure/consider that you have:

Publishing Tools (Scheduled or Timed)
Site Speed Measurement
Analytics Tool

Quality Management - In the instance of the advertising model, the quality relates to the content or the tool that draws traffic to the site. The quality of the content provided relating to the target audience is what will draw repeat direct traffic to the site.

While some sites will use various techniques to secure listings on the search engines to get initial traffic, they will not be successful in the long run because consumers or readers will not return to the site to consistently build traffic and therefore a high number of advertisers.

From a technical standpoint, you'll need to ensure/consider that you have:

Analytics to assess popularity of content
Analytics to assess overall positions in the search engines
User feedback solicitation tools
Forums

Human Resource Management - Human resource planning relates to all businesses, small or large and independent of business model. If you have people in your organization or if you plan to grow, you need to be able to plan for, organize and direct your human resources.

From a technical standpoint, you'll need to ensure/consider that you have:

Project Management Tools
Customer Service Software for managing "cases" and/or customer service representatives
Accounting Software for managing payroll issues or Contract with a Payroll Company
Benefits Considerations like Health Insurance, 401K Plans etc.
Benefits of Contractor vs. Full Time vs. Part Time Employees

Reengineering and Consulting - Managing operations in such a way that someone can look at the overall direction of the site, the success of advertisers, the popularity of the content and making it all work together.

From a technical standpoint, you'll need to ensure/consider that you have:

Customer service software or feedback tool. This means the feedback can be organized and decisions can be based on fact.
Analytics and Reporting

JIT or Just In Time Inventory Control

2008-04-21T11:20:00Z

JIT is a business model where an eCommerce company carries as little inventory as possible but they do complete most of the shipping of the products they sell. This is not the same as having the manufacturer drop ship the item direct to the consumer, rather the eCommerce website will order the items upon receiving the customer order, put everything together at their own site and then ship the order.

In some instances, these companies must process partial orders but the business model limits the amount of space the business needs to take up and limits the amount of “pre-bought” items or inventory expenditure.

This works better in some industries than in others, but it operates on the principals espoused by Ford way back in the day who felt that, in an ideal world, ordering supplies for his assembly line (as long as delivery of those supplies was not an issue) as they were needed rather than trying to anticipate the market would be more cost effective and efficient.

B2B or Business to Business

2008-03-07T10:35:00Z

B2B, also known as Business to Business, are websites that are out there to sell items to businesses that will then turn around and sell to consumers. These are the manufacturers, the suppliers and the importers that make the goods and get them out into the market.

For example, perhaps my company designs and imports Christmas ornaments. I then launch a website to market these Christmas ornaments and offer online ordering. I only sell these ornaments to other businesses who are the ones that ultimately complete the transaction with the customer who hands said ornament on their happy, twinkly tree. I am a business to business website.

B2B websites and businesses face a lot of interesting challenges in the online space. In many instances they can’t even post their prices openly online, so their design, pricing functionality, shipping functionality and even how they engage their customers and their own vendors is different than that of business to consumer websites.

Bulk pricing and ordering, for instance, is often a topic with these folks. B2B clients have a lot of trouble finding small business technology that can help them. I mean, if you have different pricing and even inventory for different “groups” of customers that are sorted according to how much they order, you need to have web pricing that appears according to those tiers, most likely attached to a customer record.

On top of that, if they bulk order, you don’t want to force them to create a brand new, giant order every time they come back for more – so you need logic to help them re-order according to their order history. And this is just a couple of the scenarios that come up for these folks – we haven’t even talked about establishing business accounts!

This is more often than not a way more complicated feature set than the standard out of the box eCommerce system can provide. Additionally, B2B website owners have an equally challenging time with web marketing. Traditional means of web marketing, like SEO, affiliate marketing and banner campaigns are just not that great for them. Yes, you can market to your keywords and pop in some PPC, but targeted business traffic is what a B2B business really needs to achieve measurable ROI. In many instances, hybrid models of web marketing and more traditional scenarios like tradeshows are a must.

Some B2B websites don’t use web marketing techniques at all in fact – they just use the website to facilitate ordering and reordering – like an online catalog. B2B sites have all the potential to increase their own productivity and increase their buyers by making the ordering process easier and by making themselves more accessible on the web. Although print media, trade shows, and old school sales calls and other techniques are still the norm in B2B, there is space out there in the web marketing world.

There are also innovative ERP and software providers who have their eyes trained on the business to business market because there are so many small businesses that could benefit from improved standardized B2B eCommerce products. Here at EBS, we'll discuss a lot of these challenges in depth and we'll also talk to B2B business owners who are capturing market share in new and innovative ways.

B2B on the web is growing quickly and consumer companies are starting to demand a more efficient method of ordering goods. With creative thinking and as business to business websites realize how much web technology can improve their work processes; this is a growth market with no limit!

Click and Mortar, or Clicks and Bricks

2008-03-07T10:32:00Z

“Click” and Mortar is also known as Bricks and Clicks and is a hybrid business model where a company has two channels of developing customers - both a physical storefront or location and a web site. For example you might sell sporting goods equipment in Chicago, Illinois and you may have a business of the same name online, selling the same or a broader offering of sporting goods equipment.

For our purposes here at EBS, we’ll be focusing on click and mortar businesses that are small – perhaps one or two physical locations and a varied level of online presence.

This business model can be used in many different ways.

You might sell items online and allow for on-site pickup or show sample items in a physical location and offer electronic ordering and delivery.
You might operate the online business almost independently of the store but use the same Poin of Sale, accounting, inventory and other software systems to run both businesses.
You might use the physical location to drive traffic to the website or use your website to drive traffic to your brick and mortar storefront.
You might have significant local events relating to your business that the web can help promote and support.

Obviously there are tons of scenarios out there – but you get the idea.

Click and Mortar works for a number of reasons – the most important being that creating an online presence after you have been established as a brick and mortar entity effectively builds on what you already know. You know about your audience, you know about your products and you probably know how to run one kind of business already.

Now, in most cases, the successful people in this business model have an established storefront and then expand into the online world. They already have systems in place to handle the growth and with the right tools, it can be a way to expand without increasing your overhead (with another store) and it can be an effective marketing tool for the already up and running brick part of your business.

Supplier networks and distribution channels will already be established and those partners will be excited at the idea of expansion with an already trusted retailer. Additionally, if you capitalize on your brand identity within your niche marketplace you can use your local reputation as a subject matter expert to propel your online presence.

In some cases, you’ll even have an existing customer base that you can leverage – which is a great luxury.

Now, click and mortar may sound awesome, but there are challenges that they face that are unique to many others.

Of course, they can all be overcome with smart use of software, tools, technology and marketing techniques that can serve both markets and by truly engaging in your own self created business community. In all things, the key is to get and stay organized and then your bricks and clicks can support each other into growth and expansion!

Read about a company considering the transition from Brick and Mortar to Clicks and Bricks and find more about the Click and Mortar business model here in eCommerce.

B2C or Business to Consumer

2008-03-07T05:46:00Z

B2C is also known as Business to Consumer and is probably the most common eCommerce model out there. These are sites like Amazon.com, Zappos.com and smaller web sites that sell products, services and even information to you and me.

This is a relatively simple business model at first glance – put up a website, add some products, do some marketing, Harry and Jane come to the site, choose their item, check out, pay and it gets shipped. Maybe it was simple several years ago but not anymore.

Now the web is rich with competition and many different advertising and marketing methods. Not only does your whole site have to be constructed with Search Engine Optimization (SEO) in mind, it also needs to be graphically interesting, completely usable, and securely functional and your products and service needs to stand up to the competition.

Huge companies like Amazon have not only cornered the market on products, but also on incorporating user behavior, likes and dislikes. I can go on to Amazon right now and they will show me the cookbooks I might like, the newest family videos for my daughter and the books from my favorite authors without me having to even log in. They send me emails when things I might like go on sale or are newly released. When I want to look for the right Indian cookbook to incorporate into my library, I can compare the user reviews to see which best suits my needs.

Their partner programs with other sites like Borders not only make it easy for me to shop and find everything I need, but I have confidence that my credit card and account information are secure because they are huge and experts on this stuff.

Small sites can have trouble competing with the big budget technology and the safety and security associated with a company like Amazon but it can be done. For instance, I love supporting small business because I have one, so I’ll specifically go out and find niche sites that sell handmade baby accessories, graphic t shirts, crafts and even shoes. The sites I go to again and again aren’t the giant ones because I like to be a little different and these sites market to me because of that.

These sites do answer my needs, with easy to use navigation, good look and feel, excellent product descriptions and customer service and an easy to use checkout funnel but they are not “big” by any means. We’ll discuss the technology that can offer you the best bang for your buck, including pricing rules, inventory availability and high quality images. We’ll even talk about the pie in the sky technologies debuted across the web by the big boys, but I want to underscore in this article that being bigger isn’t the only way to win.

I see a change in the market, where some people are sick of hitting the mall and seeing the same stuff in every store. They don’t like the hard sale, maybe they don’t even like the environment in the mall and they want to stand out and be cool – and you can’t do that if you look just like everyone else out there.

After all, shopping from your home PC, or more likely from your work PC is the easiest shopping of all. You can cover ten stores in just a few minutes rather than driving, parking, walking, browsing and moving from store to store. You can multi task, on the phone for work, putting in face time at the office and still finding the right gift for your father's birthday, all at the same time. It may not be what your boss wants you doing, but let's just all be realistic, shall we?

There are also people who respect the entrepreneurial spirit and a lot of them are willing to spend the extra buck to be an individual or to find just the right thing rather than spending money on a bunch of generic junk.

It is to these people that niche marketing is targeted. The “mommy bloggers” are a great example of this revolution. They constantly find cool websites, cool products and cool ideas and then they write about them and link to them, perpetuating the web and unwittingly supporting SEO in the most natural and organic way possible.

They also support each other, sharing “linky love” and commenting frequently on each other’s blogs, which in turn drives traffic and perpetuates all of these mini-businesses. This is virtual community marketing in its purest form. These women are all different and face different challenges but they have found their niche and they are creating business and having a good time simultaneously. In fact, one group of women founded a website specifically about sites and products they all love and that is the kind of marketing and endorsement you just can’t pay for.

Small sites in the B2C space need to differentiate themselves in the market through branding, specialized products, smart marketing and site promotion and solid eCommerce technology. Using their community is key and engaging in that community is the first step towards success.

A lot of topics in the B2C marketplace crossover with topics in B2B and subtopics like whether you carry inventory, are Just In Time (JIT), or if you have drop ship relationships all change how you do business in subtle ways. We’ll talk about a lot of different challenges and you’ll find great anecdotal information in our From the Trenches section of the site.