How E-Commerce can reduce cycle time, improve employees' empowerment and facilitate customer support.

E-commerce is the process of buying, selling, or exchanging products, services, or information via computer networks. It can perform faster and efficiency to the traders by reducing cycle time, improve employees’ empowerment and facilitate customer support.

Cycle time is the time required to complete a given process. For example, customer orders process which is included of many sub-process such as order entry, assembly, inspection, packaging, and shipping. By conducting E-commerce, it can eliminate or reduce non-value-added activity, which is defined as any activity that does not add value to the product like repair due to defects, machine set-up, inspection, testing and schedule delays, so it can lower the cost and the product can be deliver on time or even faster. Dell Co. is a successful example which use E-procurement for improve purchasing of components, collaborative commerce with its supplier and others.

Employee is the human capital for the organization even through in E-commerce. Empowerment of employees meant that giving the authority to the employees to make decision regarding all the aspect of E-business. An intranet is created in order to allow the employees to access the internal corporate or government network and update and provide guidance about the company’s activity or its products and services, and respond to customers' product information requests and handle the complaints. Ford motor Co. had just been awarded ‘Best internal corporate website ever’ in year 2001. Its intranet support over 175,000 users across 92 countries, which also allow employee to customize their site and view to get information and tools they need for their job.

Customers are the very livelihood of business organizations. So, customer satisfaction is as a necessary condition for the success of organizations. Therefore, various types of E-commerce solutions are accommodated to the retailer as to facilitate the customer support. Then, customers can easily to get the information about the product and service, asking question (FAQ), and select the available given product, collaborate with the company better and others.

E-commerce could create competitive advantages; reduce cost/ cost leadershipand widening strategic network amongtraders for the company.

The failure of an e-commerce example and its causes

eToys Inc. was founded by Edward C. Lenk, known as Toby. Lenk was born in Boston in 1961 and graduated with a degree in economics from Bowdoin College, Maine, in 1983. eToys Inc. is a leading on-line retailer of children's products. Its emphasis is toys, but it aims to sell parents a vast array of things that their children might want or need.

Being first to the market is always considered a business advantage, and investors began shoving money at Lenk. He collected over $15 million from the venture capital firm Sequoia and other venture capital firms, plus $250,000 in seed capital from a web business incubator called Idealab. He raised money from friends at Disney as well. eToys seemed to be in the position Amazon.com had been in when it became the first on-line bookstore. Lenk was sure that the giant mass-market toy retailer Toys `R' Us would soon start its own web site, and he rushed to get eToys going before that happened. In March 1997, eToys went on line.

By September 1999 eToys had announced that it had 80,000 children's book titles available for sale through its site. It hyped its new bookstore by arranging on-line interviews with notable children's authors, and it made sample pages of some 400 books available for on-line browsing. Then it teamed up with television talk show hostess Rosie O'Donnell. O'Donnell began a 'Rosie's Readers' children's book club on her show, and eToys tied in with her with a special 'Rosie's Readers' portion of its web site. Part of the proceeds of eToys' Rosie's Readers sales went to O'Donnell's charitable foundation.

To prepare for the Christmas season, eToys began running advertising on television and in parenting magazines. There is alsoa campaign with a tag line ran, 'Where will you find the perfect gift for your child? EToys. Where great ideas come to you.' The campaign cost eToys $20 million, which represented a significant portion of the company's total revenues. The soft tone of the advertising sought to convey a new, broader image of the company. eToys was not just another place to shop for toys, but a parent's ally in finding the best for a child.

Also to prepare for Christmas, eToys outsourced some of its order fulfillment to Fingerhut.

However, like many of its failed brethren, the spending of millions on advertising, marketing, and technology and battled a host of competitors was outweighed the company's income, and investors quickly jumped ship.

eToys closed in March 2001, but after being owned for a period by KayBee Toys, it's now back for a second run.

The successful story of Amazon.com

E-commerce, also known as electronic commerce, where by utilizing the Internet, has become a very powerful tool in modern business trading.

One of the very successful e-commerce examples is Amazon, which is an American electronic commerce company in Seattle, Washington. Amazon is the largest bookstore in the world. According to the industry experts, Amazon is well positioned to maintain a firm grip on its title as the undisputed e-commerce leader.


The founder of Amazon, Jeffrey Bezos, had the mindset of creating an online bookstore because of his eager inspiration to search for the perfect Web business.

Why is Amazon so successful?

Jeffrey Bezos knew where to get the venture capital. He is a smart person that he got an early start on his strategy for Amazon and disbursed whatever it took to build up the business and its name. Jeff Bezos spent heavily on advertising to establish his new venture. Amazon has banners to appear on at least 28,000 other sites on the Internet to attract those customers to just order books using a computer instead of actually going to a bookstore. For instance, if a person is browsing on a search engine for a particular subject, when the search brings up a menu of selections, it will also bring up the Amazon banner that says, “for books about (whatever) go to amazon.com.” Thus, as expected, the business took off more quickly than anyone had predicted.

Furthermore, open source is also another main player of the successful Amazon story. Linux on commodity hardware has permitted Amazon to reduce its costs since it launched. Besides, Amazon is laos a heavy user of Perl, MySQL, and Mason. At the same time, Amazon has also presented a key challenge to many parts of the open source story. The licenses compelled Amazon to not release its source as its software is never distributed although it has its own open source software.

Nevertheless, Amazon has created its own "architecture of participation," that is perhaps even richer than that of many open source software development communities. Amazon has built a lot of contributors that numbers in the millions. Everyone who rates books, creates Listmania Lists, or just buys the books and contributes to the sales-rank calculations, helps to build the Amazon interface. Even though Amazon has closed codes, another robust architecture for participating in the data layer of the interface has existed.

Amazon found out that there is an incongruity between its closed code and the benefits it received from the open source software, and that leads the leader rethink about how to redress the balance.

The history and evolution of E-commerce

History of ecommerce dates back to the invention of the very old notion of “sell and buy”, electricity, cables, computers, modems, and the Internet. The commercial-oriented sharing of electronic data among computers become possible in the 1950s with the advent of geographically dispersed computers. However, in the early years of computers, data formats used to be highly specialized (closed). Subsequently the systems too were closed; in other words, the software applications of a certain producer were not able to communicate with the applications of another producer, which hindered the data exchange between the computers that were not running the same software application. None of these many systems ended up by being adopted as a standard for commercial applications.

The first extended use of a form of electronic commerce appeared in the early 1970s
when system called Electronic Fund Transfer (EFT) was introduced. This enabled
banks and financial institutions to transfer over secure networks large amounts of
money either among themselves or with associated businesses.

In the year of 1984s, EDI, or electronic data interchange, was standardized through ASC X12. This guaranteed that companies would be able to complete transactions with one another reliably.

A significant change for e-commerce occurred in 1991, when the United States
government allowed public access to the internet. CompuServe offers online retail products to its customers. This gives people the first chance to buy things off their computer.



Netscape arrived in the year of 1994. Providing users a simple browser to surf the Internet and a safe online transaction technology called Secure Sockets Layer.


E-Commerce is not just a term but a revolution for the online industry in the year of 1995. The two of biggest names in e-commerce are launched: Amazon.com and eBay.com.

DSL, or Digital Subscriber Line, arrive in the year of 1998, provides the fast, always-on Internet service to subscribers across California. This prompts people to spend more time, and money to online.
History of ecommerce is a history of a new, virtual world which is evolving according to the customer advantage. All the tasks, letters, messages and data transferred within a flick of a second at any place no matter how far or how near. This all was impossible even for a thought or a dream, for things to be like that just a few years ago. It is a world which we are all building together brick by brick, laying a secure foundation for the future generations.

Revenue model for Google, Amazon.com and EBay

Revenue model is a description of how the organization will earn revenue, produce profits, and produce a superior return on invested capital. The major revenue models are:

Sales revenue model: A company gets the revenue by selling goods, information or services.

Transaction fee revenue model: A company receives a commission for enabling or executing a transaction. It is based on the volume of transactions made.

Advertising revenue model: A company provides a forum for advertisements and receives fees from the companies that advertise their products.

Subscription revenue model: A company charges a subscription fee for the users that access to the content and services offered.

Affiliate revenue model: A company receives commissions for referring customers to others web sites.


Google’s Revenue Model
A major percentage of Google yearly income is generated by the advertising revenue model. Google advertising revenue model includes Google AdWords, Google AdSense and Froogle.

Google AdWords is pay per click advertising program of Google designed to allow the advertisers to present advertisement to people are looking for information related to what the advertiser has to offer. Google generate most of the revenue from Google AdWords.

Google AdSense is an ad serving program. Website owners can enroll in this program to enable text, image and, video advertisements on their sites. These ads can generate revenue on either a per-click or per-thousand-impressions basis.

Froogle is a price engine website launched by Google Inc. It is a service from Google that makes it easy to find information about products for sale online.

Besides, Google is currently testing a new advertising program that pays site owners based on a Cost-Per-Click model, called Cost-Per-Action. It differ from AdSense ads in that a site owner gets paid whenever a visitor clicks on an ad and performs a specific action, such as purchasing a product from the advertiser.


Amazon.com Revenue Model
Next to Ebay, the best known name on the Web is Amazon. It was one of the first major companies to sell goods by Internet. Amazon generates revenue primarily by selling books, videos, electronics, and kitchen equipment on domestic and international Web sites, such as Amazon Marketplace.

Amazon Marketplace is Amazon.com’s fixed price online marketplace that allows sellers to offer their goods alongside Amazon’s offerings. Buyers can buy new and used items sold directly by a third party through Amazon.com using Amazon Marketplace. This sales strategy and program has been very profitable for Amazon.com. Amazon charges a commission rate based on the sale price, a transaction fee, and a variable closing fee. Which are sales revenue model and transaction fee revenue model.

Moreover, Amazon.com also generates revenue by Affiliate revenue model. Amazon was one of the first online businesses to set up an affiliate marketing program. AStore is an Amazon.com affiliate product which website owners can use to create an online store on their site. The store does not allow website owners to sell their own products directly. Website owners pick products from Amazon’s store and earn referral fees on the products purchased by their readers. The fee structure is currently the same as for the other affiliate links and ranges from 4% to 10% of the product price.

Ebay Revenue Model
Ebay is an online auction and shopping website in which people and businesses buy and sell goods and services worldwide. Millions of collectibles, appliances, computers, furniture, equipment, vehicles, and other miscellaneous items are listed, bought, and sold daily. EBay generates revenue from a number of fees such as insertion fees, promotional fees, and final value fees.

Insertion fees: When an item listed on Ebay, this nonrefundable fee is charged.

Promotional fees: Fees that charged for additional listing options that help attract attention for an item, such as highlighted or bold listings.

Final value fees: Commission that charged to the seller at the end of the auction.

Furthermore, Ebay generate revenue by sales revenue model through its subsidiary, Half.com, offers fixed price, person-to-person selling of goods, including books, CDs, videos and games, charging a 15% commission on completed sales.

Additionally, a portion of Ebay’s revenue also comes from direct advertising on the site, as well as end to end service providers whose services increase the speed of transactions. The acquisition of PayPal, whose products allow the exchange of money over the Internet, brings additional transaction based fee revenue.