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Chapter 9

BUS 237 Chapter Notes - Chapter 9: Retail, Ebay, Customer Service

Business Administration
Course Code
BUS 237

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What Is Ecommerce, and How Is It Used?
- Ecommerce - the buying and selling of goods and services over public and private
computer networks
- Merchant companies - in ecommerce, companies that take title to the goods they
sell. They buy goods and resell them
- Nonmerchant companies - ecommerce companies that arrange for the purchase
and sales of goods without ever owning or taking title to those goods
Ecommerce Merchant Companies
- There are three main types of merchant companies:
1. Those that sell directly to the consumers
2. Those that sell to the companies
3. Those that sell to the government
- Business-to-consumer (B2C) - ecommerce sales between a supplier and a retail
customer (the consumer)
- A typical information system for B2C provides a web-based application or
web storefront by which customers enter and manage their orders
- Business-to-business (B2B) - ecommerce sales between companies
- Raw materials suppliers use B2B systems to sell to manufacturers,
manufacturers use B2B system to sell to distributors, and the distributors use
B2B systems to sell to retailers
- Business-to-government (B2G) - ecommerce sales between companies and
governmental organizations
Nonmerchant Ecommerce
- The most common nonmerchant ecommerce companies are auctions (such as eBay)
and clearinghouses
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- Ecommerce auctions - applications that match buyers and sellers by using an
ecommerce version of a standard auction. This enables the auction company to offer
goods for sale and to support a competitive bidding process
- Clearinghouses - entities that provide goods and services at a stated price and
arrange for the delivery of the goods, but never take title to the goods
- I.e. Amazon.ca
- Electronic exchanges - sites that facilitate the matching of buyers and sellers;
- the business process is similar to the of a stock exchange.
- Sellers offer goods at a given price through the electronic exchange,
and buyers make offer to purchase over the same exchange. Price
matches result in transaction from which the exchange takes a
Benefits of Ecommerce
- Disintermediation - elimination of one or more middle layers in the supply chain
- The general results of disintermediation are higher revenues for manufacturers and
lower consumer prices, but the broader implications are more significant
- Consumers have generally benefited from ecommerce, and the net effect has not
been quite negative
- Manufacturers have found it much more difficult to eliminate intermediaries,
and although distribution channels have become more efficient, new players
have inserted themselves into the sales and distribution process
(intermediation or sometimes re-intermediation)
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