In this paper, I will be discussing the meaning of E-Commerce. Then I’m going to select two business net types out of the five and compare and contrast two examples depending on the commonalities and differences that are between them. Also, I will be discussing each of the two types in terms of the organizational gains that are made possible by E-Commerce related to profitability, increased market share, improving service, and faster delivery of products. Electronic Commerce, which in short is E-Commerce, refers to the buying and selling of goods or services throughout the use of the Internet between organizations or different people through a globally standardized network infrastructure.
E-Commerce also describes different kinds of commercial transactions facilitated through the Internet (Bloomenthal, 2019). There are five business net types, which are “Business web agora, business web aggregator, business web integrator, business web alliance, and business web distributor” (Kutz, 2016, pp. 28-29). I chose business web agora and business web aggregator. An example of a business web agora would be eBay, or it could be Priceline, but I will talk about eBay since I have used it in the past. An example of a business web aggregator would be Amazon or Alibaba, but since I have been on Amazon more, I will talk about it. Let’s first talk about the differences between eBay and Amazon.
A business web agora like eBay makes the exchange between the buyers and sellers possible and the negotiation process over the price can occur. On the other hand, a business web aggregator like Amazon is the opposite, where there is no negotiation process between the suppliers, and the buyers and so the price is fixed (Lowy et al., 2000). The role of the customer on eBay would be a market participant, while its role in Amazon would be a customer.
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The objective of eBay is to run a marketplace for different goods and values, while the objective of Amazon is to be to run a digital supermarket (Kutz, 2016). Amazon sells products to buyers at a reasonable price, whereas eBay sells merchandise at the lowest price. One more difference most people know is that eBay is a wholesaler, while Amazon is a retailer. The similarities/ commonalities between the two lies in the different selection of products that are available on both sites and apps whether for sale or auction/ bidding, they are online shopping sites, they both provide the customers with shipping to the desired locations (“How Are eBay and Amazon Different?”, 2019).
Moving on to the last part of the paper, which is discussing business web agora and business web aggregator in relation to the different organizational gains that E-Commerce makes it possible. Firstly profitability, when we talk about business web agora (eBay), we can understand that revenues are generated throughout the commission and the fees applied to each item sold on the site. The item is sold through the bidding process, where the customer adds a bidding price (increasing or decreasing the value) depending on the products. As I previously explained, in this type of business web the price is not fixed. It is negotiable between the buyer and the seller.
The company’s profit isn’t affected since it is based on the commissions. On the other hand, for a business web aggregator (Amazon), the price is not negotiable, it is fixed where you might see a third party offering the same product on Amazon, but there is no need for bidding, and so they can save on costs and that way they can increase the profits when they sell more of a certain product (“How Are eBay and Amazon Different?”, 2019). Secondly, increased market share, market share refers to “The percent of total sales in an industry generated by a particular company” (Hayes, 2019, para. 1). And so, for a business web aggregator and business web agora to be able to increase market share, they need to make more sales than their competitors to increase their share in the industry.
From what we have studied so far, we can see that E-Commerce helps to accomplish that by helping them to spread globally. We are starting to do everything through the Internet, where most people now are on lockdown, and they would use the Internet to buy their needs. For a business web agora to increase their market share, it’s between the buyers and the sellers where the buyers will write the highest price they are willing to pay and the seller will designate the lowest price they will accept, then once they settle on one price the exchange is complete and the sale is made. Increasing the market share in this type of business web is not as efficient as it is in a business web aggregator.
According to Lunden (2018), “Amazon is set to clear $258.22 billion in US retail sales in 2018, according to eMarketer’s figures, which will work out to 49.1 percent of all online retail spend in the country, and 5 percent of all retail sales” (para. 2). Whereas eBay only represents 6.6%. Since Amazon provides a variety of products to achieve fulfillment from the customer point of view, they are successfully increasing their market share, and the value of their products is higher than eBay. They are so far dominant in each category (Lunden, 2018). Thirdly is improving service, and it means providing the customer with a better experience each time they are on the site or the app because the better the service they are receiving, the more they’re going to be loyal to the site, and the more profits earned.
Business web agora (eBay) isn’t very efficient because different sellers operate the process of selling the products, and the sellers are being charged a monthly rate for listings. I have some friends who got scammed for selling their handmade products, and after shipping, they discovered it was a scam (no payment was received). The process of figuring things out was not very efficient, but eBay has worked to improve it. Also, eBay provides return or refund services, and they provide package tracking services.
On the other hand, business web aggregator is more efficient because it focuses on the fulfillment from the customer point of view, and they try to give the customer the best experience possible from the high-quality product available that range in prices, the payment methods, gift cards, special subscriptions, returns or refunds, digital services, device support, and package tracking (Godin, 2018). Fourthly is the faster delivery of products, E-Commerce businesses need to consider a lot when it comes to delivering products, for example, the product’s size, weight, shipping domestic or international, carriers for the products, and the time that will be promised to the buyer.
Due to the technological advancement that we are experiencing faster delivery is accomplished in Ecommerce, where a couple of years ago same-day delivery was not common, but now it is becoming more common. According to Begg (2019), “same-day delivery will become the norm for order fulfillment – especially on Amazon, Target, and Walmart. The platforms seem determined to provide the fastest service possible to win over customers” (para. 17). Amazon put a lot of effort to provide the customer with fast delivery, recently they considered delivering products by using drones, eBay is improving too, but it seems that Amazon is more efficient at improving their fast delivery to satisfy their customers.
In conclusion, there are five business net types, two of them are business web agora (eBay), which rely on negotiation and a business web aggregator (Amazon), which doesn’t negotiate the price. They are different in many things, but similar in that they are both using ECommerce to gain and sell products to customers despite the different ways they do so. Many organizational gains are made possible by E-Commerce like profitability, increased market share, improving service, and faster delivery of products.
