A203IAE – Making Money Online Simon Hill

Timetable / Topics Title Introduction Evolution of E-Businesses PPC and E-Marketing The E-Business Model Operational Issues in E-Businesses Online Productivity and Payment E-Commerce Social Media The future of online trading Recap / Revision

What could you sell online? Write a short list of 5 types of things you could sell online? What will people pay for? Solutions!! What form can these solutions take?

Models of e-business Auctions Drop shipping Affiliation Operations e-commerce Instant delivery (media / ebooks etc) Mobile based / apps Info Based e-business (ads) MLM (BE WARNED)

Auctions / 3rd Parties Advantages of eBay... On top of the general benefits of marketplaces mentioned above, eBay has some specific advantages worth highlighting: Branding. EBay offers multiple opportunities to create a branded presence including HTML listings and eBay shops. Feedback. ebay’s famous feedback system provides a trading history for every member, acting to reassure customers that they are dealing with a reputable business. Payment protection. For products purchased via PayPal, consumers and retailers are both covered for up to £3,250 per year (some conditions naturally apply). Disposal of distressed stock. Whilst a good marketplace for just about any product, eBay is particularly good for disposing of distressed stock and gets far higher prices than traditional liquidation channels. http://econsultancy.com/uk/blog/5918-selling-on-ebay-pros-and-cons-for-smes

Auctions / 3rd Parties ...and disadvantages   Low prices. EBay is the place where buyers go to find bargains. Subsequently, there is fierce competition in the marketplace and prices there tend to be lower than on the high street, or even on the wider internet. This has lead to accusations that eBay drives down prices and devalues brands. Many sellers on eBay are sole traders with low fixed costs and no requirement to charge VAT on their sales. Fraud. Unfortunately the very openness, ubiquity and ease-of-use of the eBay system make it a magnet for fraudsters of all types. This takes several forms including identity theft, items not as described and products not arriving at all. Poor practices. Most sellers provide an excellent level of service but as in any organisation there are some rotten eggs. Fees. Some sellers complain about the high level of fees. At 8% to 10% of the sale value of an item, eBay compares very favourably with other forms of online marketing. Time. Answering buyer questions and providing feedback can make selling on eBay time consuming. http://econsultancy.com/uk/blog/5918-selling-on-ebay-pros-and-cons-for-smes

Auctions / 3rd Parties Advantages of Amazon...   Easy to list. As Amazon has its own catalogue, listing products is trivial. Products which are not already in the catalogue can be added as long as they have an EAN or UPC number (a barcode, basically). A-to-Z guarantee. Amazon guarantees all marketplace transactions so consumers can buy with complete confidence. Chargeback protection. Payments are managed by Amazon Payments, so sellers are protected from fraud-related credit card chargebacks. Sellers still bear responsibility for chargebacks related to their service. http://econsultancy.com/uk/blog/5918-selling-on-ebay-pros-and-cons-for-smes

Auctions / 3rd Parties ....and disadvantages   Painfully high fees. Whilst Amazon does not charge to list items, it adds a hefty sales commission of 15% (+ VAT) for most items. However, unlike eBay, which separates marketplace and transaction fees, Amazon‟s fee includes transaction processing. Lack of branding opportunities. Unlike eBay, there are very limited branding opportunities available on Amazon for standard sellers. Strict service levels. Marketplace sellers must adhere to Amazon‟s performance level policies which relate to refunds, shipping times and feedback. If a seller fails to meet certain criteria, their account can be suspended. http://econsultancy.com/uk/blog/5918-selling-on-ebay-pros-and-cons-for-smes

Drop Shipping A drop shipper is a product supplier who is willing to ship individual orders. Usually when products are purchased for resale, you have to buy them in bulk quantities, have them shipped to you and then ship them out to your customer. Drop shippers are the exception because they don’t have minimum purchase requirements and will ship the item directly to your customer when you place an order. SOME PROS: No need for your business to stock inventory, eliminating a significant cost for your business. Your site can be open for business very quickly. No need for your own warehouse or for filling your garage full of products that you might never sell. Many drop shippers will also sell to the etailer in “light bulk” (units of 500 or less), allowing the etailer to do his own fulfillment. http://www.practicalecommerce.com/articles/209-Drop-Shipping-Pros-and-Cons

Drop Shipping SOME CONS: When doing research, know there are a lot of scams and poor lists of drop shippers out there, and get one that is regarded as credible. Since you don’t own the inventory, you usually can’t control packaging and can’t include coupons or offers to boost return business. There are different fees from different companies for drop shipping, so do your research. You don’t want shipping costs to be so high that it turns away customers. You won’t get as good a deal on products because you’re ordering one at a time as opposed to buying in bulk. Selling multiple products from multiple suppliers can result in a significant drop-ship fee for the customer. Many suppliers that provide drop-shipping services also provide various ways to integrate their products into your website. There may be fees involved for using certain services from a supplier, so be sure to do thorough research before beginning any partnership. http://www.practicalecommerce.com/articles/209-Drop-Shipping-Pros-and-Cons

Affiliate Marketing Affiliate marketing is a home based business by which a person or group sign up to represent products and or services offered over the internet. Simply put, the affiliate marketing agent works as an independent marketing or advertising agent who attempts to draw more customers to purchase goods from the company the affiliate marketer represents. Just about anyone who owns a computer and can afford internet service is a candidate to make extra cash through affiliate marketing. What are some pros and cons of becoming an affiliate marketing agent? http://www.articlesbase.com/internet-marketing-articles/affiliate-marketing-14-pros-and-cons-of-affiliate-marketing-as-a-home-based-business-3234528.html

Affiliate Marketing Some of the pros for becoming an affiliate marketing agent are: Affiliate marketing is a relatively new field. Ecommerce continues to grow at a rapid rate expanding the opportunities for affiliate marketing agents. Start up costs can be are relatively low ranging from $2000 down to $250 depending on what equipment a person already has and how quickly that person wants to get up to speed. Most people have a computer and internet service already, so they only need to purchase a couple ebooks on the subject to be on their way. There many low or no cost training materials available to help get started. You are your own boss. You make your own hours.

Affiliate Marketing Some of the cons of affiliate marketing are: Learning how to become an effective affiliate marketing agent can be time consuming and frustrating. Affiliate marketing takes patience and perseverance. The new entrant will not make money overnight. Affiliate marketing is not a get rich quick scheme. As the opportunities for affiliate marketers increase, so do the number of active competitors who are pushing the same or similar product as yours. Some of your friends and family members will think you are lazy and weird. Unless you have a huge amount of seed capital to get started, you will probably have to work 16 hour days to get things going. Choosing the right products or services to represent can be a daunting task http://www.articlesbase.com/internet-marketing-articles/affiliate-marketing-14-pros-and-cons-of-affiliate-marketing-as-a-home-based-business-3234528.html

Models of e-business Auctions Drop shipping Affiliation Operations e-commerce

Task Look into one of the following e-business models and identify the pro’s / con’s. Instant delivery (media / ebooks etc) Mobile based / apps Info Based e-business (ads)

What is your idea? Take 10 minutes now to develop your idea further using today's discussion. Provide me with a couple of sentences describing your idea before leaving the class today.

Q’s? ?