An example of an E-Commerce failure and its causes

Pets.com is an example of E-Commerce failure. Pets.com was a San Francisco-based e-tailer existing only as a virtual firm that offered pet products, information, and resources to consumers. This website was launched by Greg McLemore in 1998 about the same time as several other online firms offering pets products. Therefore, Petstore.com, Petopia.com, Petsmart.com, and PetPlanet.com were the major competitors in the online pet industry although Pets.com is the first virtual pet stores enter into the market.

In the beginning of 1999, Pets.com appeared to be on a road to success. By October of year 2000, Pets.com decided to close its door as it realized that they never brought profits for the online firm.

There are several factors that contribute to the failure of Pets.com:

1. An unsustainable business model and unachievable expectations
Basically, Pets.com “bet everything on the market”. Pets.com acquired large amounts of funding from venture capitalists without demonstrating any background of achievements or success. Pets.com assumed that the market and its revenues would grow quickly enough to earn for a profit before the funding money was exhausted. Overestimated the number of online customers by e–tailer also is a reason of the failure of Pets.com.

2. Pets.com went public too soon and spent money too quickly
The main reason that Pets.com spent money too quickly is the excessive spending on marketing and advertising. During its lifetime Pets.com spent more than $70 million on marketing and an average of $400 to acquire each new customer. Pets.com made advertisement more heavily than another online pet e-tailer. The excessive advertising made by Pets.com did not only benefit them, it also helped the entire online pet industry to increase sales.

3. Failed to position itself in an effective manner.
It is necessary to provide customers with a good reason for its existence and to satisfy their needs. Pets.com just offered the products that could be easily obtained at the nearby retail stores and pet information about health, grooming, behavior and etc. that did not justify a virtual shopping trip.

4. In a very competitive arena
The online pet market was a crowded one in the time period when Pets.com was still alive, which include Petstore.com, Petopia.com, Petsmart.com, and PetPlanet.com. Pets.com failed to compete with a unique positioning strategy but instead decided to compete with low prices just like its competitors.

An example of E-Commerce success and its causes

Dell is one of the most successful example of E-Commerce company in the world. Dell was founded and established by Micheal Dell in 1984 with a simple concept by selling computer system directly to customers in order to meet their needs. Dell began by selling upgrades of IBM-compatible PCs. In 1985, Dell began to sell its own brand of PCs, called Turbo, which had an eight-megahertz processor. The first, the first Dell laptop is made in 1991 and by 1993it became the top five computer companies in the world. In 1996, Dell beagn to sell their compuer products through the website and they took over Compaq in 1999


From the beginning, Dell operated on the direct sales model, taking orders over the phone and building PCs to the customer’s specifications. In 1996, Dell is creating its first website and moving many of its business activities to the Internet. By launching Dell’s website, the customers can buy the computer products of Dell according to their specification. Their strategy of selling products is no middleman and no retail outlets. Therefore, we can buy the computer products of Dell with cheaper price and saving our time.

Causes that contribute to the success of Dell Inc.:

1. Customer Service
Customer can customize their own computers by launching Dell’s website. Besides, salespeople had to install their own computers, so they gained hands-on experience with the equipment they'd be selling, and can better help customers make informed decisions and solve problems with the product.

2. Cutting operation costs
Dell’s strategy of selling their products with no middleman and no retail outlets can cut down the cost of middleman and sell to the end user directly at a lower price.

3. Good communication
Good communication exists with suppliers about customers’ specifications, so that they are able to deliver on time. Good communication with employees about customers’ information also can make them serve customers better.

4. Being a low cost provider creates flexibility and market advantage
Dell is as a low cost provider, their products are cheaper and in good quality. The low costs can attract customers and the quality of their products is maintained from time to time.

5. Effective and efficient delivery services
Products will be delivered to customers in 5-8 working days.

Identify and compare the revenue model for Google, Amazon.com and Ebay

Nice weather. I am going to introduce revenue model today. In business, revenue is income that a company received from its business activities, usually from the sale of goods and services to cusomers. Revenue models can basically consist of sales, transactions fees, subscription fees, advertising fees, affiliate fees and etc.
Google is an American public corporation, which the revenue model is focused on advertising. Google has generate services and tools for the public and business environment such as web application, advertising network, and solution for business. 99% google's revenue is derived from its advertising programs. Google AdWords is google's advertising product and main source of revenue. It is a pay per click advertising program for advertisers to present their advertisements. The Google AdWords program includes local, national, and international distribution. All AdWords advertisments are eligible in Google, AQL search, Ask.com, and Netscape. AdSense is the other advertisement application run by google. These advertisements generate revenue either a per-click or per-impression basic. There are few types of AdSense such as AdSense for feeds, AdSense for search, AdSense for mobile content, and AdSense for domains. AdSense allows the website owners to show different advertisements from different advertisers on their website and receive revenues for it. AdWords allow users to advertise their website on many other websites running AdSense. Google gains commission for providing both these services. Though many other competing programs exist on the network, Google is having good reputation.
Ebay is an online auction and shopping website that enable users buy and sell variety goods and services. Ebay offers several types of auction. Auction-style listings allow the seller to offer one or more items for sale for a specified number of days. 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. The last type of auction is Dutch Auction. It allows 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. Ebay has established localized websites in thirty other countries. Products provided by ebay include online auction hosting, E-commerce, shopping mall, paypal, skype, StubHub, Kijiji, and other business. Ebay generates revenue from a number of fees. The U.S.-based eBay.com takes $0.10 to $4 for a basic listing.
Amazom.com is America's largest online retailer. Products that provided by Amazom.com includes Amazon Kindle, Amazon Web Services, Amazon Marketplace and etc. Amazon.com has branched into retail sales of books, musics, movies,games and digitals download. It launched its own website auction services on March 1999. Amazon Marketplace is fixed-price online marketplace that allows sellers to offer their goods. Buyers can buy new and used items sold directly through Amazon Marketplace. This revenue model is quite similar with eBay.com. This program generates big profit to Amazon.com. Amazon charges a commission rate based on the sale price, a transaction fee, and a variable closing fee.

The history and evolution of e-commerce

What is E-commerce?

Electronic commerce, normally known as e-commerce, can be defined as a moderm business methodology that fulfill the needs of organisations, merchants, and consumers. E-commerce is any business related transactions partially or totally carried out by electronic medium especially on internet using Open networks or Closed network. The most attractive feature of e-commerce is it allows people to buy or sell anything at anytime and anywhere. It also helps to reduce the costs and increase the speed of delivery. E-commerse is not just about buying and selling, it also consists of electronically communicating, colloborating, and discovering information. It is about e-learning, e-government and etc.

History and Evolution of E-commerce

The history of e-commerce is a history of how information technology has transformed business process. The meaning of e-commerce has changed over the last 30 years. Originally, e-commerce is only an electronically tool that facilitate the commercial transactions by using Electronic Date Interchange (EDI) and Electronic Funds Transfer (EFT). EDI is used to transfer electronic documents from one computer system to another. EFT is used to perform financial transactions electronically. These were both introduced in late 1970s. The acceptance of credit cards, automatic telling machine (ATM), and telephone banking in the 1980s were also another form of E-commerce. Another form of e-commerce includes arline reservation system, online shopping, and etc.

In 1991, Tim Berners-Lee developed World Wide Web and started the first internet transaction.
Later in 1993, graphic web browse which are Mosiac and Netscape, were develop by Marc Andreessen. On the other hand, Microsoft came up with Microsoft Internet Explorer. In 1991, DSL was lauched into market, which is a family of technologies that provides digital data transmission over the wires of a local telephone network. The development of Linux is considers as a major improvement of e-commerce. Linux is one of the most prominent examples of free and open sourse software collaboration.
Amazon and eBay were the first International companies that implemented electronic transactions. According to the Internet audience measurement website, Amazon attracts approximately 50 million U.S. consumers to its website on a monthly basis. As conclusion, e-commerce already become a famous and success business methodology. By 2009, 47 percent of Business to Business (B2B) commerce was estimated to be carried out online.