E-Commerce Business Model
The most suitable e-commerce business model for Ballarat Trade Fair Consultancy (BTFC) is the Business-To-Consumer (B2C) model which is defined as a type of online business model in which businesses sell their products or services directly to final consumers (Laudon & Traver, 2013).
The model is suitable for BTFC since its major business activities include; selling merchandise such as branded products to final consumers, selling floor space to companies who want to exhibit in which case the client is the final consumer, selling visitors tickets to visitors who want to attend the trade fair thus the visitors are the final consumers, organizing travel and accommodation for the exhibiting companies.
An e-commerce revenue model refers to a plan that an online business will use to generate revenue. The most suitable e-commerce revenue models for BTFC include;
Advertising revenue model: This is where BTFC will earn revenue through allowing exhibiting companies to advertise their products in its e-commerce website (Turban et al., 2017). The amount of revenue earned will be determined by online traffic gained/number of viewers and number of clicks.
Sales revenue model: This refers to where a business earns revenue through selling products and services (Chaffey, 2015). It will be the largest source of revenue for BTFC since it will incorporate selling of the following products; merchandise, visitors’ tickets, floor space to exhibiting companies, and hospitality services such as foods and drinks during the exhibition.
Affiliate revenue model: This refers to where an online business earns revenue in form of commission for every sale made by advertising and providing links to partner-companies’ websites (Laudon & Traver, 2013). BTFC can partner with travel and accommodation businesses and earn commission by affiliate marketing of travel tickets and accommodation space.
Networking and Communication Infrastructure Needed
Internet: this refers to a global system of computer networks which are interconnected and use the internet protocol suite to link devices to the worldwide (Sträubig, 2013). It will enable customers to access BTFC’s e-commerce website and do shopping, bookings or inquiries.
Intranet: this refers to a private network that is contained within an organization. It consists of interlinked local area networks, VLANs, and leased lines that connect the wide area network (Sträubig, 2013). Its core purpose is to securely share organizational information and resources at BTFC.
Extranet: it refers to a private network that is used to securely share portions of business information with stakeholders such as suppliers and partners, through the use of public telecommunication system and the internet technology (Spralls III, Hunt, & Wilcox, 2011). It has high-level security measures to ensure that information does not leak to undesired parties. It will solve the current communication problem at BTFC by enabling it to link with suppliers.
Applications Needed
According to Cheng & Dong (2016) hardware and software needed include;
Web server: it will be used to store the e-commerce web pages. It can be provided by service provider at a fee known as hosting fee.
Server operating system. It will be used to provide the clients with the web pages that they are searching for.
Website: this are the web pages that will be stored in the web server. It is this website that will be accessible to the public and through which customers will buy products and services.
Database systems: they will be used to store data such as products currently available, purchase history, among others and will have real-time updates as the clients continue to interact with website.
Transaction processing system: will be used to process client’s purchase cost, verify payment, and approve delivery to the client.
Domain name and URL (Uniform Resource Locator): it will enable users to easily search for and find BTFC’s website. An example can be www.btfc.com
Networks: This involves reliable intranet, extranet, hypertext transmission protocols among others.
Payment gateway: it will provide secure means through which clients will pay for products purchased.
Addressing E-Commerce Security Issues
The measures that will be taken to guarantee security include;
Firewalls: they will be used to secure the organizations intranet and extranet from external unauthorized penetration, through monitoring and controlling incoming and outgoing network traffic by using some predetermined security protocols (Niranjanamurthy & Chahar, 2013).
Encryption: use both private and public keys to encipher data such as payment details being transmitted in a network. This prevents eavesdropping and phishing.
Address verification systems: This is a system that is capable of comparing the customer’s billing information against details stored in a file by the card issuer (Matbouli & Gao, 2012). It will play a major role in protecting customers from fraud through detecting and blocking suspicious transactions in which the information stored does not match with the billing details.
Secure Socket Layer (SSL) certificates: Also known as digital certificate, it will create a secure link between the website and the client’s browser by ensuring that all the data shared among the two remains private and secure from hacking (Kant, Iyer, & Mohapatra, 2012).
Addressing E-marketing Requirements
Including opt-out ways for recipients in emails: This is a mechanism that enables the recipient to voluntarily and easily opt-out of receiving emails from a sender (El-Gohary, 2010). It will help in ensuring that marketing emails are only sent to target and prospective customers.
Including BTFC’s address in marketing information: this will enable the client to know the source and legitimacy of the marketing information and thus building customer trust. It also complies with international e-marketing standards.
Identifying emails as advertisements: this is in accordance to the e-marketing principles which require that the sender of an advertisement email should not purposely deceive the recipient into thinking that it is a personal email (Rahimnia & Hassanzadeh, 2013). This will be done through including advertisement identification information in the email subject.
Seeking client’s consent to receive advertisement information through providing optional subscription to email notifications in the BTFC’s e-commerce website. This will help in ensuring that clients/ recipients do not receive marketing emails against their free will.
Payment systems Choice
Credit card: This refers to the use of a card given by a financial institution to pay for products and services online through submitting the card number and expiry date in the payment section of the website. Clients pay for goods purchased at the end of the billing period.
Debit card: it is similar to a credit card but the major difference is that clients can only use the money which is available in the accounts since payment is done instantly when goods are purchased.
E-wallet: it is a prepaid online account that stores user’s data such as credit and debit card details (Nwaolisa & Kasie, 2012). The most suitable e-wallets for BTFC are PayPal and Skill due to their high popularity.
Netbanking: it is a payment method that allows customers to do online payments directly from their bank accounts without requiring a card (Xue, Hitt, & Chen, 2011). Just like a debit card clients can only spend the amount that is available in their bank accounts.
Addressing Ethical and Privacy Concerns
BTFC will adopt various measures to uphold ethical conduct and privacy of clients’ information. The measures include but not limited to: notifying clients through a web pop-up about the use of cookies to store their browsing history so that they can opt to accept or reject (Boritz & No, 2011). Secondly, BTFC will adopt advanced security measures such as strong passwords and digital certificates to secure clients’ data from unauthorized access.
Thirdly the e-commerce website will comply with all set local and international standards in terms of legitimacy of the site, and quality of products and services sold in it, among others (Sharma & Lijuan, 2014). The fourth measure is that BTFC will maintain genuineness in transaction processing to avoid overcharging customers and in marketing information to avoid deceiving customers.
Addressing E-commerce Legal Issues
The measures to be used to address various legal issues according to Gillies (2016) include: clearly indicating the terms and conditions that form the contract between the customer and BTFC and making them accessible to the web users. Secondly, the company will comply with Australian taxation laws and international laws related to custom duty, export and import restrictions among others.
The company will ensure that it disseminates all the necessary information about the product in the web page so that the customers can make an informed decision on whether or not to purchase the product or the service. The fourth measure is that BTFC will comply with the consumer protection laws such as the competition and consumer act of 2010 that governs product quality and safety (Australian Government, 2018).
Addressing customer service issues
Offering live chat support: this will play a major role in handling customers’ inquiries on matters to do with sales, shipping, billing, web navigation among others. It will also be a major tool of measuring the rate of customer satisfaction based on the customers’ comments and traffic in the website based on the number of connections that the live chat gets (Eid, 2011).
Offering and honoring warranties: Warranties are a major way of building customers’ trust on a particular product and the organization in general, thus they form part of customer relationship management (Kassim & Asiah Abdullah, 2010). Through offering and honoring warranties BTFC will be able to retain its customer’s and attract more. For BTFC warranties are applicable in the merchandise that it sells.
Offering 24 hours phone call support: this will be convenient to customers who do not want to use live chat support. Unlike live chat support phone call will make customers to feel a sense of having a direct interaction with the support time.
Metrics to Measure the Success of the Proposed System
Net profit: This refers to total profit gained after all expenses are deducted from the revenue (Heikal, Khaddafi, & Ummah, 2014). Since e-commerce will involve incurring cost in search engine optimization and improving website efficiency, success will only be realized if total cost does not surpass the revenue gained.
Conversion rate of site visitors: This refers to the rate at which people who visits a website complete the desired actions (Fang, Chiu, & Wang, 2011). For BTFC the higher rate of web visitors who conduct a purchase or book for a service, the higher the rate of success of the website.
Repeat purchase by customers: This will portray customer’s satisfaction and loyalty to the business. Therefore, the higher the rate of repeated purchase the higher the success of the ecommerce site (Thorleuchter & Van Den Poel, 2012).
Customer reviews: This refers to the customer’s view of an online store, it is either done through social media comments or website rating section. The higher the rating the higher the success of the website.
Mock-up Proposal
According to Alibaba Group (2018), Alibaba.com is a China-based online store that brings together suppliers and buyers. Suppliers post their products in the website and the buyers buy them from there, alibaba.com earns a commission from that transaction. It is ranked among the world’s top three e-commerce websites. The following is the design of how it works.
Entity A is the supplier who is offering the products for sale in the platform. The supplier can even be located outside China.
Entity B is the buyer who intends to buy products from the site.
Both the suppliers and the buyers connect to the internet in order to access the e-commerce application service which is www.alibaba.com. Once the buyer purchases products, they give their credit/debit card details which is then connected to the payment gateway in order to access the money from the buyer’s bank account and deposit it to the supplier’s bank account. The bank transmission network has an SSL certificate to secure the transactions from hackers. The firewalls in the security sub-system controls what gets in and out of the network.
BTFC can apply this design in its affiliate marketing revenue model, in which case the travel and accommodation companies will be the suppliers while visitors will be the buyers. Therefore just like alibaba.com BTFC will be providing a platform that links the suppliers and the consumers.
References
Alibaba Group. (2018). Alibaba Group. Retrieved from https://www.alibabagroup.com/en/about/overview
Australian Government. (2018). Competition and Consumer Act 2010. Retrieved from https://www.legislation.gov.au/Details/C2017C00369
Boritz, J. E., & No, W. G. (2011). E-commerce and privacy: Exploring what we know and opportunities for future discovery. Journal of Information Systems, 25(2), 11-45.
Chaffey, D. (2015). Digital business and e-commerce management. Pearson Education Limited.
Cheng, Y., & Dong, B. (2016). Analysis and design of campus E-commerce system. In 2016 International Conference on Logistics, Informatics and Service Sciences (LISS) (pp. 1-4). IEEE.
Eid, M. I. (2011). Determinants of e-commerce customer satisfaction, trust, and loyalty in Saudi Arabia. Journal of electronic commerce research, 12(1), 78.
El-Gohary, H. (2010). E-Marketing-A literature Review from a Small Businesses perspective. International Journal of Business and Social Science, 1(1).
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Gillies, L. E. (2016). Electronic commerce and international private law: A study of electronic consumer contracts. Routledge.
Heikal, M., Khaddafi, M., & Ummah, A. (2014). Influence analysis of return on assets (ROA), return on equity (ROE), net profit margin (NPM), debt to equity ratio (DER), and current ratio (CR), against corporate profit growth in automotive in Indonesia Stock Exchange. International Journal of Academic Research in Business and Social Sciences, 4(12), 101.
Kant, K., Iyer, R., & Mohapatra, P. (2012). Architectural impact of secure socket layer on internet servers. In 2012 IEEE 30th International Conference on Computer Design (ICCD) (pp. 27-34). IEEE.
Kassim, N., & Asiah Abdullah, N. (2010). The effect of perceived service quality dimensions on customer satisfaction, trust, and loyalty in e-commerce settings: A cross cultural analysis. Asia Pacific Journal of Marketing and Logistics, 22(3), 351-371.
Laudon, K. C., & Traver, C. G. (2013). E-commerce. Pearson.
Matbouli, H., & Gao, Q. (2012). An overview on web security threats and impact to e-commerce success. In Information Technology and e-Services (ICITeS), 2012 International Conference on (pp. 1-6). IEEE.
Niranjanamurthy, M., & Chahar, D. D. (2013). The study of e-commerce security issues and solutions. International Journal of Advanced Research in Computer and Communication Engineering, 2(7).
Nwaolisa, E. F., & Kasie, E. G. (2012). Electronic retail payment systems: User acceptability and payment problems in Nigeria. Arabian Journal of Business and Management Review (OMAN Chapter), 1(9), 111-123.
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