Page 32 - DCAP306_DCAP511_E-COMMERCE_AND_E-BUSINESS

Unit 2: Business Models of E-Commerce

Service Providers
Service providers are companies that make revenue by selling a service instead of a product. These
services are available at a lower cost and is time saving.

Web sites such as, Lawinfo.com and myCFO.com make revenue by selling services
to the customers.

Market Creators
Market creators create Web sites and make use of the latest Internet technologies to create markets that
bring buyers and sellers together for auctions.

Web sites such as Priceline.com and eBay.com create markets for buyers and sellers.

Community Providers
Community providers provide sites where individuals with common interests and common
experiences can transact and exchange notes.

Web sites such as About.com and Friendster.com create communities for people
with common interest.

2.3.2 Advantages and Disadvantages of B2C Models
The advantages and disadvantages of B2C e-commerce can be considered from the viewpoint of either
the consumer or the business.
From the consumer’s viewpoint, advantages include:
1. Consumers can shop at any time of the day, from the privacy of their homes or other remote
locations.
2. Consumers can have access to a greater variety of goods and services on offer.

From the business viewpoint, advantages include:
1. Business can reach worldwide market with access to more potential customers.
2. B2C can lower transaction costs associated with sales.
3. B2C can display information, pictures and prices of products or services without having to spend
much on the advertisement.

The disadvantages from the consumer’s viewpoint include:
1. Security issue such as credit card information is very sensitive, and there are chances of scams and
frauds.
2. Customer service is compromised as consumers are not always satisfied with their purchases and
they often do not get timely answers to their queries.
The disadvantages from the business viewpoint include:
1. The competition is more on the Web and the customer can go to other sites to purchase the same
product.

2. There can be technological problems due to which sales might come down.
2.3.3 Differences between B2B and B2C
Business-to-Business e-commerce differs from Business-to-Consumer e-commerce in many ways.
Business-to-Consumer merchants sell the products on a first-come, first-served basis and Business-to-
Business transactions are performed through negotiated contracts that enable the seller to think and

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