Chapter 4: Types of E-Commerce Providers and Vendors


“When nations grow old, the arts grow cold and commerce settles on every tree.”

—William Blake (1757–1827)

Overview

The Internet has proven to be a disappointment for many retailers and manufacturers, as sales channels are hyped to be both efficient and virtual. First generation e-commerce adopters now find themselves mired in technology bearing little in common with their core businesses, because they invested in an infrastructure often costing hundreds of millions of dollars. Today, industry analysts estimate that one-time e-commerce setup costs, including technology and labor, range from $22 million to $42 million, depending on transaction volume (5,000 to 25,000 transactions/day) for companies building from scratch. Very few companies make money, and even fewer return an attractive ROI at those levels.

For many companies demanding online profitability and reliability, the traditional buy/build approach is no longer the best option. Without ever buying a piece of software or hardware, new business architectures enabled by e-commerce Internet service providers (ECISPs) allow companies to establish fully customized online sales channels. Under guarantees of world-class service delivery, the ownership, integration, and ongoing management of this infrastructure can be outsourced. By freeing retailers and manufacturers to focus on their brand, merchandise, and customers—not the technology, ECISPs radically improve the attractiveness of e-commerce.

This chapter examines types of ECISPs and vendors. It addresses three topics: how the next generation ECISP architecture delivers complete, one-stop online sales channels, which major advantages companies gain by outsourcing their e-commerce infrastructure, and why many early adopters have struggled with the first generation buy/build approach. You will also learn how an ECISP architecture enables manufacturers and retailers to achieve profitability at $50 million to $290 million in online sales, avoid managing numerous integration and third-party service relationships, ensure reliability and scalability in your Web site and order processing, focus your organization on real profit drivers—not technology, and upgrade functionality continuously and seamlessly over time.




Electronic Commerce (Networking Serie 2003)
Electronic Commerce (Charles River Media Networking/Security)
ISBN: 1584500646
EAN: 2147483647
Year: 2004
Pages: 260
Authors: Pete Loshin

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