Chapter 1

1.1 INTRODUCTION

Buying and selling of products and services through electronic systems Such as
internet and other computer related networks. Recently, rapid global growth in
e-commerce has increasingly become necessary component of business strategy
for efficient transaction. E-commerce technology in business could
revolutionize relationships within organizations and individual transaction
settings , The Internet has improved traditional brick and mortar stores through
the development of e-commerce web sites. Nowadays, many e-commerce
especially online shopping had widened the access to their products through
new methods of marketing via electronically mediated e-commerce. Good
understanding of the requirements, expectations and the operational concept of
internet shopping could an advantage to effective online retailing and as well
help the manufacturers in developing more effective and targeted online retailer
operations. E-stores can be operated by either a pure or a traditional retailer ,
However, there is concern over online shopping especially when customer’s
personal information and financial transactions is required to facilitate
transaction through internet medium. A lack of trust is likely to discourage
online consumers’ intentions from purchasing via online stores. However, with
the existence ecommerce, Hardedge-March , reported that e-commerce serves as
cost-reducing strategy for customers through distribution network of goods and
services from the provider to the consumer. Unlike conventional shopping
which involves face-to-face transaction; online shopping uses internet, network
and web based technologies in creating interactive medium between sellers and
consumers. In addition, the existence of online shopping yield benefits such as
easy to business transaction network; saves times and reduces search costs
compared to conventional shopping process. Because of these benefits,
businesses and companies are widening their access to business transaction
through fascinating method of delivery via electronically mediated shopping.
With the recent growth of online shopping, it has become an attractive option
for expanding the business opportunity available for sellers. By incorporating
online shopping, into business transaction in companies can eliminate the need
to construct new building to support services in other to accommodate the
increase of consumers. E-commerce is potential tool for successful business
innovation with promising advantages over current Libyan online transaction
which are noted to have been jeopardized by insecurity. However, this paper
highlights the potential limitations associated with E-commerce transaction in
Libya and proposes relevant steps to overcoming them. Relevance of integrating
ecommerce into Libyan trade system is discussed with respect to their positive
impact.

1.2 MEANING OF ONLINE BUSINESS

A business transaction, in the context of electronic commerce, is any monetary

transaction that is made between consumers or businesses via the Internet.
Business transactions free up time when conducted online since each party does
not need to be physically present in order to make the transaction.

Electronic business (e-business) refers to the use of the Web, Internet, intranets,
extranets or some combination thereof to conduct business. E-business is
similar to e-commerce, but it goes beyond the simple buying and selling of
products and services online. E-business includes a much wider range of
businesses processes, such as supply chain management, electronic order
processing and customer relationship management. E-business processes,
therefore, can help companies to operate more effectively and efficiently.
1.3 DEFINITION

Levis, studied Economics at University of Oxford

Online business - also referred to as e-business - is any kind of business

activity that happens online (over the internet).

A business owner who does any, or all, of their business using the internet, is
running an online business. Running an online business can include buying and
selling online, and providing an online service. A wide variety of businesses can
be found online, in many different industries.

Anyone can start an online business. If you have a unique product or idea, you
can find a way to sell or trade it online. It's just like a traditional 'bricks-and-
mortar' business, except your office or shop is online, so you have to decide
how it will look and appeal to customers.

1.4 Types of online business

Online businesses can have different online business-fronts (how they appear on
the internet). These can take many forms, such as:

 websites
 online shops or marketplaces
 blogs
 social media accounts.
1.5 Advantages and Disadvantages of online business

There are a lot of things to consider before making the decision to start or move
an existing business online, particularly if you're not a computer or web guru, or
haven't started a business before.

ADVANTAGES

• No need of land to open an office if you maintain all of the working online
only.

• The structure of online business is very flexible as compared to the normal

businesses being run from office or a shop

• You don't have to be in the office to take any step; you can be in any part of
the world with a laptop and internet connection. This type of business can be
managed on the go as well.

• You don't have to worry about huge initial cost while thinking about how to
start an internet business.

 24/7 greater flexibility and efficiency in product and service delivery

 accessibility to customers all over Australia (or worldwide).
some technical or web.

 Reach – Online companies can cater to a wider range of audience as

compared to their offline counterparts. Eg. Companies like Amazon and
eBay have a global reach.
  Low Cost – the cost of spreading the message, advertising and in general
the administration costs are lesser than regular companies and far more
lesser when online companies reach economy of scale.

 Ease of shopping – Provides customers with a hassle free shopping

experience whereby customers can sit at their home and shop at the click
of their mouse.

 Choice – Gives customers more choice to choose from. Eg. Barnes and
Noble has ten thousand books in its store and million in its online store.

1.6 DISADVANTAGES
 Your business idea is comparatively more highly prone to duplication.
Someone might cheat your business idea until you do not have
copyrights bought for it.
• A lot of training and patience is required to see real profits coming
your way.
• Punctuality and self realization of importance of work are important
aspects of online business as there is no boss to guide you or make you
realize of the deadlines.

 Ease price comparison – Because customers can compare prices easily

(now with price comparison sites like confused.com,
moneysupermarket.com etc), it makes companies compete on price rather
than product differentiation and other factors which means online
companies have lesser margins.
  Security and reliability issues – With Internet and credit card fraud on
the rise, people are becoming more and more cautious and reluctant of
giving their bank details online.

 Information Overload – At times people get lost on the internet because

there is too much information which makes them delay or refrain their
purchasing decision.

 ‘Squeezing the tomato’ (Gallauher, 1999) syndrome – People still like

to have a look and try products like clothes etc before buying it.

 Trust – Because customers do not deal with the actual person but with an
internet process, trust is of the major issues.

 Shipping costs – Convenience comes at a cost and most often than not,
people have to pay for their shipping if they don’t buy stuff above a
certain price limit. Eg. Customers have to buy something greater than £5
in TescoDirect to have it delivered free of cost.

1.7 Information Technology before starting online

Learning how to use your computer and its software packages, as well as how to
navigate the internet without getting lost, will let you run your online business
much more smoothly.

Don't be intimiated if you're not a computer whiz – there are plenty of

information sessions and courses out there for you.

1.8 Digital Business Kits

The Digital Business Kits provide the tools and resources required to
help businesses embrace the world of digital business.

1.9 Need help when considering doing business online?

 Understand when a hobby becomes a business.

 Read our Home-based business topic for an overview of starting your
own business from home.
 Visit your local business advisory service if you need more
personalized advice. Head to our Advisory Services tool to find your
closest service.
 Do you need financial help? As a small business or not-for profit
organization, you may be eligible for funding assistance or training
opportunities to help grow online. Visit our Grants and Assistance tool.
 Learn more about managing finances, check out our information on
Finance.

Importance of Online Business

a) Easy Marketing and Advertising
Creating a website benefits businesses because people can market their products
and services without using traditional marketing techniques such as fliers,
mailings and newspaper ads. Online marketing saves the company money that
would otherwise be spent on traditional means of advertising.

b) Larger Customer Base

A key benefit of the Internet for business is the potential for customer growth. A
small business without a website may be able to compete only with other local
businesses. However, people conducting business on the Internet have the
potential to gain customers from around the world because Internet companies
are open 24 hours a day.
c) Increased Sales –
The biggest reason why online reviews are important to businesses is that
ultimately it increases sales by giving consumers the information they need to
make the decision to purchase a product or service from a business. People
are always much more likely to purchase a product or service that has already
been recommended by others.

d) Understand and Better Serve Your Consumers –

Online reviews can tell you whether you are doing a good job or what you are
doing wrong and how to improve your service. This allows you to better serve
your consumers by quickly and efficiently resolving any issues consumers have,
thereby creating a positive experience for the consumer that will only help your
business in the future.

e) Improve Rankings –
Online reviews do more than just create a better relationship between your
business and your consumers; they work towards improving your websites
ranking on search engines like Google, Bing, Yahoo! and more. The more that
is written about your business online, the more important a search engine
considers you to be!

f) Higher Keyword Content –

Online reviews help your business website to have a steady influx of SEO
keywords that help your business have a more prominent online presence for
consumers due to the fact that many of the keywords included in online reviews
will help to bring up your website in search results for consumers looking for
the type of product or service you provide.

g) Allow Consumers to Have a Voice and Create Consumer Loyalty –

Consumers who take the time to leave an online review for a business are far
more likely to feel a certain loyalty to your business and keep coming back year
after year. Through the act of leaving an online review and establishing a
relationship with the business, it allows your consumers to feel like they have a
voice and are able to provide feedback in a positive and meaningful way.

h) Create Consumer Engagement –

Many times online review pages can become active social communities where
consumers leave reviews and keep coming back to see if others have made
comments on their reviews or to simply see what other consumers have to say
about your product or service in general. This creates a social community of
consumer engagement that allows consumers to form an attachment to both the
business and the other consumers as well.

i) Let Consumers Do Your Marketing for You –

A handful of positive online business reviews are worth a great deal and can
offer your business benefits that a simple marketing campaign can’t. They are
like micro marketing campaigns that keep working long after the online review
has been posted, giving a constant positive image to potential consumers and
creating a continual brand awareness that benefits the business for the short
term and for the long term.

j) Reviews Breed More Reviews –

When a business, product or service has already received reviews online it
seems to encourage other visitors to leave their own feedback. Just the
appearance of a number of reviews appears to be enough to give new visitors
the confidence to add their own views on that particular product or service. It is
a new form of online ‘crowd behavior’ that psychologists are still working on
figuring out!

Characteristics of the Most Profitable Online Businesses

1. Ease of Use

No one has the patience to navigate your dinosaur jungle of a website. No

matter how good you think you are.

In fact, 76% of consumers say the most important feature of a website is ease of
use.

Let’s get real: you’re not a brick-and-mortar. When a customer walks into
Target, Target has however long it takes the customer to walk around the store
to make a sale.

You, on the other hand, only have a few minutes, if not a few seconds, to make
a sale. You only have as long as it takes a customer to click away.

And they will click away if your website is more complicated than a Victor
Hugo novel.

Use this to your competitive advantage.

2. Mobile-Friendly Website

And while you’re working on ease of use, time to get your website mobile-
friendly.

Google has been reporting since 2015 that more searches happen on mobile than
any other category. Oh, and if you don’t have a mobile-friendly website? Be
prepared to face the SEO consequences.

It doesn’t stop at mobile responsive. You know how annoying that form-fill
section is when you’re on a laptop.

Multiply it by about 50. That’s how annoying it is on mobile.

Don’t just have a website someone can pull up on their phone. Make a website
someone can use on their phone. That’s the first step towards making the list of
most profitable online businesses.

3. Speedy Delivery

In the age of social media, people are impatient jerks.

This applies to product delivery.

The majority of consumers expect their product to be delivered by a specified

day, or on a day they choose. Think about the last time you paid extra to get a
package shipped faster. Think about how satisfied you were when it worked.

Apply that to your business.

Overnight delivery, next-day signed, before noon arrival, and other related
options should all be standard fare for e-commerce sites.

4. Reliable Delivery Times

Oh, and by the way? When you tell a customer their product will be there the
next day, it better be there the next day.

Don’t send it via pony express either. If you can get the package there but in
terrible condition, your customers aren’t about to thank you for it.

You know what they’re going to do next time? Order from someone else.

If you can get the package there fast and in great condition? Congratulations,
you found one of the golden tickets to customer loyalty and positive reviews.
5. High-Quality Images

You wouldn’t buy apples without inspecting the apples for bruises or buy shoes
without trying them on.

Similarly, your customers aren’t going to buy from you if they don’t have good
images of what your products look like.

This is part of providing a high-quality online experience – making your

customers feel as though they’re in the store inspecting the product themselves.
Besides satisfying the customer, it gives you a certain whiff of professionalism.

If you’re going to invest in high-quality images of your products, then it follows

that your products will also be high-quality. Or, at least, higher quality than the
guy with bad pictures.

6. User-Generated Reviews

Reviews aren’t just for the theater. Your star-rating is the number one deciding
factor for consumers.

But don’t get paralyzed with fear over a single negative review. Having an
unfavorable review here and there where any customer could see them actually
makes customers more inclined to trust you – it shows that you aren’t censoring
negative reviews.

Now, a wall of negative reviews does not make you one of the most profitable
online businesses. Balance is everything.

Plus, if you’re one of those fancy forward-thinking sites, you can use the best
positive reviews for social proof. Brownie points to you for building a ravenous
fan base.
7. Social Proof
That thing about a ravenous fan base? Time to get busy on that.

This isn’t just where you sell yourself one of the most profitable online
businesses with the one product people can’t live without.

Social proof is like having a conversation with your customers – it’s how you
form a lasting emotional bond with them by getting your customer to relate to
your brand.

Think of the last time you responded well to an ad that read something like,
“buy now!” Probably never, and if you did, you probably didn’t go back.

Customers are looking for a brand that feels human. Social proof is your way of
making the customer feel a personal connection.

8. Wish Lists
What’s so great about wish lists? Aren’t those for kids writing Santa letters?

Think of it this way: a wish list is you literally inviting your customer to
bookmark a product that they’re probably going to go back and buy later. And if
they forget, the wish list is a reminder the next time they log onto your site.

Plus, if the wish list has a sharing functionality, or if your customers show their
wish list to friends and family, you’ve automatically generated free traffic.

So basically, you’re leaving revenue on the table if you don’t.

9. Clear Price
Do you know what happens when someone can’t see the price of something?
They either assume it’s a scam or that the price is so high that it’s not listed, and
either way, you’ve lost the sale.

Seriously, don’t be shy about showing your customer the price. It lets them
decide whether they can afford it, and you always want them to say yes.

ONLINE BUSINESS SERVICES

Online Business Research is the most economical way to capture data from a
larger pool of sources on the internet. However, most organizations invest a lot
of money and energy on primary research and this may be completely justified.
There may be quite a few reasons,

 Do not have the expertise to locate the necessary information on the

internet
 May not get the up-to-the-minute results on free sources on the internet
 Not sure about the credibility of the data as there are numerous sources
providing different information

Objectives of online business

a) Build a brand

Internet marketing objectives often include building a brand. This means

not only establishing your logo and company name in the minds of
consumers, but also what your company stands for.

Well-known brands are typically trusted more by customers, especially

when paired with positive associations. The Internet is a great tool for
building that trust, because it has a wide reach and allows you to directly
connect with individuals.

b) Improve local SEO

Many small businesses, as well as companies focused on increasing sales

in specific geographic region, focus much of their marketing efforts on
improving their local SEO. This means optimizing various elements on
their sites in order to attract local customers who are looking for the
services they provide.

c) Increase qualified traffic

Every business owner wants to see numbers rise in terms of visitors to

their site and landing pages. However, those numbers are meaningless if
they aren’t the right kinds of traffic.

d) Manage online reputation

In an age when anyone with a computer or smartphone can post their

opinions about companies, products, and services for the whole world to
see, it’s important for businesses to maintain a solid online reputation. This
means monitoring your company’s name, maintaining social profiles, and
responding to bad reviews accordingly.

e) Become an influencer in your field

Every industry has a few well-known individuals or companies that others

look to as thought leaders. They stay at the forefront of new technologies
and ideas, and are often the first to share new information.
Unfortunately, every industry only has a particular amount of room at the
top. The people who become experts and influencers are those who
strategically position themselves to give out great advice and information,
often without much obvious monetary gain.

How to conduct online marketing?

Generally online marketing are conducted using the following methods

 Websites and blogs
 Email marketing
 Online advertising

BAHADIR
KANDEMIRLI
BAHADIR MURAT
MURAT
| 2018
1.11 Background
MURAT KANDEMIRLI
2018 BAHADIR |
The story of the formation of A
mazon.com is often repeated and is now and

urban legend. The company was founded by Jeff Bezos, a computer science
and electrical engineering graduate from Princeton University. Bezos had
moved to Seattle after resigning as the senior vice-president at D.E.Shaw, a
Wall Street investment bank. He did not know much about the Internet.
But, he came across a statistic that the Internet was growing at 2300%,
which convinced him that this was a large growth opportunity. Not knowing

much more, he plunged into the world of E-Commerce with no prior retailing
2
experience .

He chose to locate the company in Seattle because it had a large pool of

technical talent and since it was close to one of the largest book wholesalers
located in Roseburg, Oregon. Clearly, he was thinking of thecompany as a
bookseller at the beginning. Moreover, the sales tax laws for online retailers
state that one has to charge sales tax in the state in which one is
incorporated. This means that for all transactions from that state the price
would be increased by the sales tax rate leading to a competitive
disadvantage. Therefore, it was logical to locate in a small state and be
Copyright 2001 SandeepKrishnamurthy All Rights Reserved.
uncompetitive on a smaller number of transactions rather than in a big state
such as California or New York.

1.12 What is Amazon Business?

Amazon Business is a B2B marketplace that has been created to address the
changing needs of business customers and provide them with a more efficient
way to buy and sell online.

According to Forrester Research, 93% of business customers prefer to buy

online and 75% agree orders made online are far more convenient than buying
from a salesperson.

At the same time, Amazon has changed the way online shoppers buy online.
The marketplace has made the online shopping experience easier, faster and
cheaper for customers across the world.

1.13 OBJECTIVES

a) Identifying the line of business of Amazon.

b) Identifying the types of business models used by Amazon for expanding
its e-commerce Business
c) Identifying the list of e-commerce strategies deployed by the Amazon
regarding its intensive growth, generic strategies and user referenced.
d) Identifying Supply Chain Management (SCM) strategies and how such
strategies are implemented.
e) Identifying what are the more steps to be taken by Amazon in coming
future.
f) Build brand equity and grow the company
g) Describe the climate and vegetation of latin America
h) Help you take your eBay and Amazon selling to the next level
i) Explore the international opportunity of cross border trade
j) Look at strategies for efficiency and growth.
 1.19 Some of the features Amazon Business offers include:

 Tailored Business Experience: Unique search, browse and shopping

experience that is tailored specifically to business purchasing.

 Business Accounts: Create a single or multi-user business account, invite

additional users to join the account, and define groups of users to easily share
payment methods and shipping addresses
.
 Free Two-Day Shipping: Fast, free shipping on orders of $49 or more on tens
of millions of eligible items, plus access to even faster shipping options.

 Multi-Seller Marketplace: View multiple offers on a single product page for

easy price comparisons, as well as shop sellers that consistently meet the
performance and service requirements that businesses expect.

 Business-Only Pricing: Business-only prices on select items and quantity

discounts from select manufacturers and sellers.

 Business-Only Selection: Business-only items combined with Amazon’s vast

selection provides access to hundreds of millions of products, including hard-to-
find items like traffic signs, industrial deep fryers, antibodies, 55-gallon steel
drums, dent pullers and much more.

 Purchasing Approval: Create approval workflows to enable better spending

controls.
 Purchasing System Integration: Integrate leading third-party procurement
solutions for easy access to Amazon Business.

 Amazon Tax Exemption Program: Make tax-exempt purchases and manage

tax exemption permissions across an organization.
 Order Tracking: Add purchase order or reference numbers to purchases to
assist with reporting and account reconciliation.

 Amazon Corporate Credit Line: Place orders and finance purchases using a
Pay-in-Full Credit Line or a Revolving Credit Line
.
 Comprehensive Product Information: Rich product pages and studio-quality
photography, as well as dimensions, CAD drawings and manufacturer how-to
videos.

 Amazon Business Customer Support: World-class Amazon customer service

dedicated to registered business shoppers

1.17 Amazon Business Model

Amazon has evolved to become an ecosystem over the past 20 years. Everyone
who has ever accessed internet must have encountered an Amazon service.
Amazon’s business strategy is so well planned and well-designed that it has
multiple and independent revenue sources which are somehow connected.
How big is Amazon’s business model, you ask?

Amazon Marketplace – Revenue generated through commissions and other

charges from sellers.
Amazon Books – The company earns revenue by selling books on Amazon
marketplace, book depository, and AbeBooks, audio books on audible, comics
on ComiXology, and through Amazon publishing. It also created an all new e-
book demand by introducing Kindle in the market. Amazon also owns physical
bookstores in some countries.

Amazon Music and Videos – Amazon Business Model includes star websites
like IMDB and twitch.tv which makes loads of money for Amazon. Amazon
Music and Videos also add to the revenue.

Amazon Gaming – Amazon’s subsidiary, Amazon Game Studios, is one of the

renowned names in the game development industry. Amazon Digital Game
Store sell third-party games as well.zz
Amazon Web Services – The company is among the top IT infrastructure
providers in the world which also provide support to CIA and Netflix.
Amazon Fire Products – Amazon launched its fire range of products which
include phones, tablets, Tv and Mobile OS.
Amazon Prime – The company provides premium membership to its every
service through Amazon prime.
Amazon Patents – Amazon holds more than 1000 patents many of which are
licensed by other companies.
To dig more intensely about Amazon Business Model, we have to first learn
about How Big is Amazon and what all products and services it offers.

ADVATAGES OF AMAZON BUSINESS

 Amazon has a lot of products available at reasonable prices, which can be
delivered to your door, even overnight if you are willing to pay the fee.
  They run sales that make some products cheaper or at least no more
expensive than you might pay in a brick-and-mortar store.
 They also may have products not easily found in physical stores, or
products not available in a person’s area.

DISADVATANGES

 Returns can be done but are not as easy as going to a local store where
you could talk to someone if necessary, or simply exchange the item for
size or color or replacement if it’s broken or otherwise not working.
 If you are buying from Amazon, you are not buying from local
businesses, which might have an effect on your community.
 As Allen Inks notes, you can’t physically examine the products. You
can’t try on clothes, or see how heavy something feels, or see how a
fabric feels. To an extent you have to guess it’s the right thing. Even if
measurements are provided, it’s often hard to know for sure if something
is the right size for your space.