E-Business refers to business activities which are conducted over the internet (Amit and Zott, 2001) such as transfer of funds, communication with consumers for the trading of goods and services through the medium of the internet, collaborating with business partners or conducting any other activities related to business and commerce (Turban et al., 2002).
E-business creates tremendous potential for businesses since activities are simplified and exceed geographical barriers, enabling organizations to reach consumers globally rather than simply locally. Technological developments and advancements have brought about a sea of change in the way people communicate and conduct business with each other, as compared to the traditional means of communication including fax, telephone and mail, which have now been replaced by scans and emails through the medium of the internet.
Research confirms that through effective implementation of e-business, firms are able to augment their speed and effectiveness and provide a suitable platform for introducing their products and services at the global level (Tobias, 2002).
Speed and efficiency of business transactions is facilitated greatly and consumers have a variety of services and options available to them for conducting trade and commerce on the net (Sharma et al., 2006). However, different companies adopt different models for the success of their e-business. This paper aims to analyse three different new e-business models which have gained immense popularity in recent times.
Malaga (2007) identified three emerging e-business models which are described below:
Pay-Per-Click Intermediary model
In this model, the affiliate uses a Pay-per-click campaign on several search engines including Google, MSN and Yahoo and the traffic generated from these clicks is driven to the merchant. The model works successfully if commissions earned are higher than the pay for the ad campaigns. As such the merchant should be aware of the earnings per hundred clicks (EPC). This model was successfully used for the sale of outdoor beanbag games by the merchant who profited through the 529 visitors sent to the merchant by the affiliate resulting in a profit of $144 (Malaga, 2007).
Mini-Sites and Micro-Sites Model
This is a marketing intermediary model which involves the building and creation of websites which include several links to other merchant sites. The model works optimally for small niche markets and the only important requirement of the model is search engine optimization (SEO) which is the primary marketing instrument used in this model (Malaga, 2007).
The model has been implanted with a mini site, Hoodia Mini-site, which has numerous pages providing detailed information about the products and services they offer. Hoodia Gordonji is an appetite suppressor which is marketed for loss of weight.
Many merchants offer Hoodia (Micro site) through their websites and drive the visitor to the homepage of the site which contains basic information regarding the product and other details such as previous successful clients. When users click on the Hoodia ad, the site owner shares the generated revenue with the search engine, Google or Yahoo (Malaga, 2007).
B2C Affiliate site
This model of business to consumer has a broad focus and offers numerous products on a single site, functioning like an online store with a wide ranging menu of products, prices, description etc. When users click on the desired product, they are taken to the main site of the merchant rather than the information page.
This model has been successfully implemented and worked for several companies like the Vitamin and Nutritional Supplement Site which used two primary merchants for most of their offered products and both the merchants displayed these products on their sites, which were displayed to visitors who would then be diverted to the main page of the main site when they clicked on a particular product (Malaga, 2007).
References
Amit, Raphael and Christopher Zott. (2001). Value creation in e-business. Strategic Management Journal, 22 (6/7), 493-520.
Malaga, Ross A. (2007). The new marketing intermediaries–a multiple case study of three new e-business models. Journal of Academy of Business and Economics 7.3 : 158(6).
Sharma, Varinder M., Vincent P. Taiani, and Arif A. Sariteke. (2006) Impact of e-business on the exporting services of export management companies. International Journal of Commerce and Management 16.1: 29(12).
Tobias Henk. (2002). Using e-business to gain advantage. Journal of Database Marketing, 9 (2), 132-136.
Turban, Efraim, David King, Jae Lee, Merrill Warkentin, and H. Michael Chung. (2002). Electronic commerce: A managerial perspective. Prentice Hall: New Jersey.