1. E-Commerce Business Models
Ing. Athanasios Podaras, PhD

2. Content What is business model? Components of a business model
Revenue Models on Internet
Functions and objectives of BM
Typical EC Business Models
Classifications of EC Business Models

3. What is a BM?
A business model describes the manner in which business is done to generate revenue and create value.

4. Components of a BM
Description of the customers to be served and their value proposition
A description of all products and services the business plans to deliver
Growth strategies.
A description of the required business process and the distribution infrastructure (including human resources)
A list of the resources required, their cost and availability (including human resources).
A description of the organization’s supply chains
Value chain structure
List of competitors and competitive advantage
Expected organizational changes
Expected revenues

6. Revenue Models on Internet
Sales . Companies generate revenue from selling products
Transaction Fees. Commissions are based on the volume of transactions made
Subscription Fees . Customers pay a fixed amount, usually monthly, to get some type of service
Advertising Fees
Affiliate Fees . Companies receive commissions for referring customers to certain websites
Licensing Fees (i.e. Microsoft charges fee for each workstation using Windows NT)
Other Revenue Sources . Some companies to watch a sports competition in real time for a fee

7. Functions of BM Describe the supply and value chains.
Formulate the venture’s competitive strategy and its long-range plans.
Present the customer value proposition
Identify who will use the technology for what purpose; specify the revenue generation process; where the company will operate.
Estimate the cost structure and amount and profit potential.

8. Typical EC Business Models
Online direct marketing (b2b, b2c)
Electronic tendering systems
Electronic marketplaces and exchanges.
Viral marketing
Group purchasing

9. Classification of EC BMs (Rapa, 2010)
Brokerage
Advertising
Infomediary
Merchant
Direct
Affiliate
Community