Exercise 01

1. Visit http://yahoo.com and http://zope.org as examples of online communities.

a. What is meant by an online community and how is it important for e-commerce?


An online community gathers together groups of people with common interests which facilitates e-commerce in the following aspects:

• Online contacts between potential customers, buyers and suppliers;
• Increase the business opportunities with e-commerce.

Some typical online communities provide e-commerce opportunities are list below:

• Auction sites which auction items on the Internet and make profits by taking some commission from the sales.

• Affiliate sites which contain a link to a normal retailing site and are paid when a visitor from the affiliate site makes a visit to the retail site to make a purchase. The affiliate site will usually attract visitors by offering some information such as providing links to resources and tutorials on some specific topic or technology such as Java.

• Bulk-buying sites where a site collects a number of user’s together all of whom want to buy some item; the site negotiates a discount with the supplier and takes a commission.

• Shopping malls where a number of e-commerce sellers congregate together on the same Web site; often these sellers will be related to each other, for example they may all sell luxury goods. The mall owner takes a percentage of their profit.

• Portals which contain massive amounts of material on a particular topic, for example a portal devoted to fishing. Such sites will contain thousands of resource links, tutorials and indexes.

• Digital publishing sites which are effectively magazines on the Web. They make profits in a number of ways including advertising and charging vendors for references to their Web site.

• Licensing sites which make some software available to other sites, for example search engines which allow a visitor to the site to search for material more easily.

b. Visit the three auctions sites at http://ebay.com, http://ebay.co.uk and http://ebay.com.au:

i. Are there a common thread and a local community sense in action?

The three auctions sites are in similar format and structure. Users need to subscribe to the websites before buying and selling products. The websites included forum, discussion groups and news to generate an online community among the members. The default users and members are local residents i.e. US citizen for ebay.com site, UK residents for ebay.co.uk sites and Australia residents for ebay.com.au sites. The prices of the products are expressed in local currencies.
The products are default locally and similar assumptions are applied for the delivery location for the sellers as well. However products can choose to be shown worldwide. Therefore local community senses are expressed in the ebay websites.

ii. What electronic payment systems are used? Are they globally acceptable?

PayPal electronic payment systems are adopted by all the three auction sites. PayPal is an electronic payment system processing online payment via internet. PayPal is acquired by eBay since 2002. Users open an account with PayPal and register their credit card or bank account into their PayPal account. Payment via PayPal can avoid the need for the buyer to give financial information to the seller. PayPal is accepted globally.

iii. What are the benefits to of an online auction sale to a buyer, a seller and E-bay owners?

The buyer can access products and contact seller directly national wide or even world wide without physical boundaries. The direct transaction can minimize the overhead profits charged by middle traders resulting in a cheaper price.

Similarly, the sellers’ products can be shown to all potential buyers national wide or even world wide without physical boundaries. The direct contact between the buyers and sellers can minimize the overhead profit charged by middle traders resulting in a higher seller price for sellers.

For the eBay owners who can make profit by charging commission on the transactions, advertisement via banners, links to other commercial sites and handling charges via PayPal electronic systems.

c. Find three others examples of an online business using an online community approach.

There are three examples of an online business an online community approach:

1. PCWorld is the most widely computer or business magazine website at http://www.pcworld.com/shopping/?tk=cxpfdr is an online business using an online community approach. Members would receive daily mails regarding software download for trial uses or freeware or sharewares. Through the mail and their websites, PCWorld provide links to other retail websites and display advertisement banners.

2. Intercontinental.com is one of the world’s best hotels and resorts website at http://www.ichotelsgroup.com/intercontinental/en/gb/home/ a worldwide accommodation booking websites. Subscribed members would receive e-mails containing special offers of hotel accommodations. Intercontinental.com makes profits by charging commissions and by referring to the concerned hotels.

3. Netvigator.com is the most popular website at http://www.netvigator.com/ a portal includes massive information on promoting their add-on services of their internet broadband. It also contains links to their customers services WebPages and webmail services and also other commercial websites.

2. Visit the famous online store front at http://www.amazon.com

a. Why has it been a successful site? How does the purchase of a book work?

Amazon has been a successful site over the years since it launched online in 1995 due to it is large range of products, and ease of use, because it was first in the market, first to get sufficient funding, and first to achieve scale. Amazon is satisfy the criteria in e-commerce such as efficiency, user friendly, open non-stop, globalization and competitive. The success of Amazon as she able to meet the consumers needs, and fully integrated of demand chain and supply chain stated by (Pereira & Fife 2000).

Amazon offers a range of products and services, facilitated by strong brand recognition. Amazon could facilitate readers to seek other and authors to discuss ideas. Amazon builds browsing and searching capabilities in its site, and provides product information, reviews, recommendations, and searches on the technology and personalization on a broad selection of products. Amazon was one of the first sites to customize pages for each registered customer, using collaborative filtering.

The following steps of a book purchase at
http://www.amazon.com/gp/help/customer/display.html/ref=hp_navbox_lnor_new?nodeId=524700

1. Find the book. Browse or search the book. Type keyword in search box and located it in the page.

2. Add the book into shopping cart. Click 'Add to Shopping Cart' button on the book detail page.

3. Proceed to Checkout. Review all books in the shopping cart and click 'To Buy Now' button to checkout process.

4. Sign in or Create a new accounts. Enter e-mail address and click 'Sign in' button.

5. Enter a shipping address. Enter the correct address.


6. Choose a shipping method. Items requiring special shipping and handling.

7. Provide payment information and password. Accept credit cards such as American Express, Diners Club, Discover, MasterCard, and Visa.

8. Review and submit the order. Check the accuracy all of the information and make any necessary adjustments.

9. Check order status. Review or change about the order that placed before it enters the shipping process.

b. Is there any secure transactions not involving money?

There is a secure transaction is a transaction that is founded on a security agreement. A security agreement is a provision in a business transaction in which the obligor, or debtor, in the agreement gives to the creditor the right to own property owned or held by the debtor.

Create a customer account record for maintenance, access and view purchase history are a secure transactions process that is not involving money. Those Web pages are protected by Secure Sockets Layer (SSL) communications protocol, indicated by the 'https:' show at the beginning of Web page address.

Day-to-day use of SSL:

• Financial institutions who implement online-banking so their customers can conveniently view their own account details from their homes.

• Business partners, who need access to Universities enabling their students to view statement or online payments, like my.csu.edu.au.

• Most e-commerce sites, like PayPal and which collect personal details and credit card numbers through the net is protected under SSL.

c. What is the range of items that you can buy?

The ranges of items that can be buy in Amazon, including on the main page:

• Books
• Movies, Music & Games
• Digital Downloads
• Computers & office
• Electronics
• Home & Garden
• Grocery, Health & Baby
• Apparel, Shoes & Jewellery
• Sports & Outdoors
• Tools, Auto & Industrial

i. List the steps involved and comment.

The above list is showed in the 'Shop All Departments' on the left hand side of the menu bar and changed into a pull down menu in other pages. It is a quite easy way for users to locate what their want on any pages in the site. Select the department by moving the pointer to it, the sub-category list will be show at http://www.amazon.com homepage. For example of shop all departments:

The same as buying books and games from them, which is very normal and many commercial websites used nowadays. So this was the list of steps involved in buying any item from the site http://www.amazon.com.

3. What happens with new models such as price comparison sites?

Price comparison sites are the service on Internet and allow individuals to see different lists of prices for specific products. Most price comparison services do not sell products themselves, but source prices from retailers from whom users can buy.

Price comparison sites typically do not charge users anything to use the site. Instead, they are monetized through payments from retailers who are listed on the site. Depending on the particular business model of the comparison shopping site, retailers will either pay a flat fee to be included on the site or pay a fee each time a user clicks through to the retailer web site or pay every time a user completes a specified action (Wikipedia, 2009).