What Are eCommerce Business Models?

Christoph Zott, of INSEAD, and Raffi Amit, co-director of the Wharton School of Business e-Business Initiative (WeBI), state that an e-commerce business model defines the "...relevant perspective for understanding new business structures in the information age."

eCommerce offers unique models for business evaluation.

Value Drivers

Value driver models are things that consumers value in a business. These factors, such as product range, website use ease, affordable pricing and user product reviews, are quickly and easily evaluated using ecommerce site design.

Novelty

The ecommerce model allows businesses room to experiment with new products, without making major financial commitments. It also creates an atmosphere where businesses may experiment with new revenue models, according to Zott and Amit.

Lock-In

Lock-in is the capacity to encourage buyers to return to purchase additional items. The ecommerce personal information storage system allows buyers easy shopping and one- or two-click sales checkout.

Complementarities

Complementarities are outside products that compliment company sales offerings. The ecommerce model matches complimentary products to encourage consumers to spend on additional products.

Efficiency

Amit and Zott found the ecommerce business models are more efficient, compared to traditional businesses. Sales information is quickly evaluated and matched to meet immediate consumer needs in online sales.

References

• UP: Wharton: Creating Value Through E-Commerce Business Modles
• Predicting Market Success; Robert Passikoff

Resources

• UP: Wharton: "Leadership in E-Commerce," Mukul Pandya
• eCommerce and eDistribution; Eric K. Clemons, et al.; Nov. 10, 2003