There are eight basic website models — ranging from the simple static pages of a brochureware site to richly interactive online gaming sites, to online stores chock full of products, to online auctions. Many websites combine several of these basic models. However, each model has unique characteristics that distinguish it from the other models and it is important to understand these differences.
A brochureware site is a marketing site that electronically aids in the buying and selling process. A traditional business often will build and maintain a brochureware site as a marketing tool with the objective of promoting the business and its products/services. A brochureware site is sometimes an adjunct to a business’ technical support division providing online documentation, software downloads and a Frequently Asked Question (FAQ) section. Such a website can provide detailed information about the business’s products/services, contact information including the business’s address, telephone numbers, and email addresses. It can also be a tool to provide the public copies of a company’s annual reports, press releases, and employment opportunities. Revenue from this kind of site is generated indirectly by creating an awareness of the business’ products/services. All transactions occur offline.
Savvion develops business process management software that improves business performance and reduces costs within and across functional business units. Its website, www.savvion.com, is a good example of a high-quality brochureware site. It is clean, fast loading, and has all of the elements of a good website. To demonstrate the variety of businesses that take advantage of the Web to expand their business opportunities visit the following brochureware websites: Rolledsteel.com, Cohenhighley.com, Hayproperty.com.au, and Paulcato.com.
As you can see, you don’t need to be a corporate giant to benefit from a brochureware site. In addition to the websites listed in the previous paragraph, here are two other examples of small businesses that use the Web to their advantage. First, is a local Chevrolet dealership in Reno, Nevada that has made the most from its brochureware site. Visit Championchev.com and you will find that the website is positioned to provide the sales and repair departments with additional sales, while reducing the business’s overhead by eliminating many of the telephone calls requesting directions to the business, hours of operation, etc. The second is a Tennessee pharmacy that dispenses information and speeds prescription refills via their website. To check out the innovative ways this small business uses the Web to its and its customers’ advantage, visit Wilsonpharmacy.com.
An online store is a website where consumers buy products or services. This type of site is most commonly referred to as an e-commerce site or a “B2C” (Business to Consumer) site. In addition to most, if not all, of the content found in a brochureware site, an online store displays products/services along with detailed information (e.g. specifications and pricing) usually from a database with search features, and a method for online purchase. An online store must also provide extensive information about the products/services offered that not only aids in attracting consumers, but gives them enough confidence in the seller and the products/services to take the next step — making an online purchase.
One question the author is often asked is “what should an e-commerce site offer — online order processing, just a toll free number, or both?” The answer is: Offer both.
If you choose to take online payments, you must provide a secure, reliable, cost-effective system for authorizing payment and managing transactions. The best systems are based on the Secure Socket Layer (SSL) and/or Secure Electronic Transactions (SET) encryption technology, which provide the encryption of data and generate and display a “results page” to the customer following the transaction.
Further, a successful online store must be designed with the ability to store orders in a database or as tab-delimited text files so the data can be imported into an invoicing system. Then the website must be able to intelligently route encrypted email to the order fulfillment division.
A good example of a large online store is Healthtex.com. This is a great site in every respect. To see how a small brick-and-mortar business uses a web presence to enhance its bottom line, visit Parkaveliquor.com, where you will find an attractive, well-designed and fully functional e-commerce site that benefits both the storeowner and the customer. Other good online stores you might want to use as guides when designing your website include the Treliske Organic (www.nzsouth.co.nz/treliske), which offers “Certified Organic” Wool, Knitwear, Beef and Lamb; Badcataviation.com, a great toy airplane store; and Soccer Books Limited (www.soccer-books.co.uk) where you can find a huge selection of books, video and DVDs relating to the sport of soccer.
Another avenue that an entrepreneur might want to consider is to team with a large e-commerce site such as Amazon.com or e-bay.com to provide the e-commerce end while the entrepreneur provides the site’s “content.” Good examples of such a site are www.dolls-for-sale.com and www.politinfo.com.
A subscription site targets a specific niche market that places a value on expert information, service, or a digital product delivered in a timely manner. Technical newsletters, access to research information, and graphics, music and computer game downloads are all examples of products and services that can be sold for a monthly fee, an annual subscription, or a small per transaction fee. While the revenue from such services and products should be able to fund the operating costs of a subscription site, in most instances, the income may not be substantial — the exception are sites that offer video, music, and/or computer game downloads.
A subscription site can process payments offline and provide via email a user’s name and password for access, or it can provide a secure, reliable, cost-effective online system for authorizing payment and managing transactions. Again, the best systems are based on Secure Socket Layer (SSL) and/or Secure Electronic Transactions (SET) technology to encrypt the data, and generate and display a “results page” to the customer following the transaction.
E-commerce technology continues to become more sophisticated, and with every advance the financial prognosis for a subscription site should improve. A good example of a subscription site is iEntertainment Network (www.iencentral.com). This worldwide game and entertainment site offers both free ad-supported and fee-based online game channels. The site also offers a variety of monthly subscription plans.
The website Content-wire.com offers another example of a good subscription site that uses both banner ads and subscriptions for its revenue stream. This website offers a niche editorial product that covers a narrow vertical technology sector — web-based commerce. As such, it provides up-to-date news articles, produces features on a variety of subjects, and offers a good bit of research material. Although this website could be better designed, it is functional and the average surfer will find it easy to use. Because the site does derive some of its revenue from banner ads, some information offered is free (use it!). Note that surfers who pony up $100 or $200 for a subscription, there is much more data available for your perusal.
A sub-model that increasingly is finding favor is the website that offers downloadable content — via a subscription account, a la carte basis, or a combination of both. The most popular website within this sub-model is the new Napster.com. Although this digital music destination bears the same name as the famous, but defunct, peer-to-peer file sharing website, that business model is in its past. The current Napster.com is a digital music catalog site that also offers many rich community features for its customers. The new Napster.com allows consumers to choose how they want to experience music, offering both an a la carte store and a premium subscription service.
Not all digital music sites follow the subscription model, however. Apple’s iTunes.com website, which at this writing offers more than 400,000 songs from a wide variety of musicians for less than a dollar per song, states that its iTune website offers music without the need to “agree” to complicated rules. There are no clubs to join, and no monthly fees — if you like a song, you just buy a downloadable copy of it for 99¢.
Check these sites out; they might give you some ideas on how you can make money from your own website.
An advertising site is a content laden site, whose revenue base is the dollar amount derived from banners, sponsorships, ads, and other advertising methods. The traffic the site draws is the measure of its value. Recognized rating firms measure its value and then advertising rates are based upon that value. Important note: Very few sites can be supported entirely through advertising dollars.
Two good advertising sites are Cnet.com and Howstuffworks.com. Both are wonderful content laden advertising websites that every reader should bookmark. You should especially read the Howstuffworks website’s explanation of how a web server works, which can be found at http://computer.howstuffworks.com/web-server.htm.
Another great advertising site is Thekidzpage.com. Although this colorful site’s use of “pop-up” ads can be irritating, those ads allow this site to provide all of its great content for free. Children love to visit this site to play games and parents appreciate the more than 250 printable coloring books and learning activities.
But an advertising site needn’t be graphic intensive nor host a variety of pop-up ads to be successful. Cases in point are the low-tech websites HomePCnetwork.com and Hrmguide.co.uk. Although these text-driven sites don’t offer a lot of “bells and whistles,” they make up for their lack of “eye-appeal” by their informative, easy-to-use content.
Online or Cyber Mall
A simple and easy way to sell products/services online is to open a shop in one of the many cyber malls on the Web. Online malls generally offer turnkey solutions for store creation, payment processing, and site management. For example, most cyber malls offer a template for implementing a catalog of products, a shopping cart application, and a form generator — allowing small businesses to quickly set up shop on the Web. The templated applications employed to set up a business’s catalog and the ease of payment processing are tempting to a novice. These cyber malls also provide a high level of “click traffic.” If you are new to the Web and would prefer to first “dip your toe in the water,” a cyber mall may be the answer.
A cyber mall’s biggest promise is to deliver more traffic to your “front door” than you would be able to do if you go it alone. Since you will be relying on the cyber mall’s marketing savvy, make sure you verify that it can deliver. But note that the only “front door” which is advertised is the cyber mall’s address, not your online store’s address.
Most cyber malls offer a purchasing system, which enables a web start-up to avoid up-front shopping cart software costs, but a fee is accessed on each purchase — that fee will eventually exceed the cost of the software.
You need to ensure that the cyber mall you choose is one in which your online store can flourish. Consider the pros and cons of establishing your online store in a cyber mall including the restrictions and costs that some cyber malls impose. Then consider the option of setting up your own purchasing system and independent identity. For, in reality, a cyber mall is just a list of links categorized by store and product type.
Any number of cyber malls can help you get your website up and running in record time. Yahoo! Store, probably the most popular cyber mall on the Web, includes an easy tool that lets you register your own domain name (http://www.ourname.com) or, if you already have a domain name, they will help you transfer it. You are also given the option of using stores.yahoo.com/yourname, which does not require an up front registration fee. Freemerchants.com offers an easy and inexpensive way to set up an e-commerce site. Of course, like many cyber malls, with Freemerchants.com you are required to design your new website using Freemerchants.com’s own online Store Builder (to which you can add your own graphics and backgrounds) — you upload sites or pages created in other programs to the freemerchants.com servers.
Or perhaps you would like to avail yourself of the services of a cyber mall that caters to a niche market. Regional cyber malls are one example of this type of online service. Danapointharbor.com promotes not only local online shops, but also other local industries and activities in the Dana Point Harbor, California area. And Outerbanks.com does the same for the North Carolina Outer Banks region. There are many of these regional services; if you find the concept interesting, check out what’s available in your area.
Perhaps you want to present your product to a more defined niche, like the Indian artifacts mall at www.arrowheads.com/main.htm or TIAS.com’s antiques cyber mall. Such an arrangement might be just the ticket to introduce your new e-commerce business to your targeted niche market.
All of the website models discussed in this book are built to serve either the individual consumer or the consumer and business customers. But a business-to-business site is built to serve other businesses; if the business also wants to serve its individual consumers, it usually builds a separate retail site to serve those customers. This book doesn’t deal with the minutiae of B2B sites, since B2B sites, while using some of the technology discussed in this book, often also need other technology to further their goals of providing products/services to other businesses rather than individual consumers.
The growth of B2B e-commerce is explosive. For some businesses, B2B e-commerce already influences value chains, distribution channels, customer service, and pricing strategies. Others look to B2B for ways to leverage this new technology to increase sales, profits, customer loyalty, and brand preference. For detailed information on creating a viable B2B business model read books such as, B2B: How to Build a Profitable E-Commerce Strategy, by Michael J. Cunningham; The eMarketplace: Strategies for Success in B2B eCommerce, by Warren Raisch; and B2B Application Integration: e-Business-Enable Your Enterprise, by David S. Linthicum.
Auctions have been around for thousands of years. Traditionally, a person offers an item for sale and potential buyers bid on the item. The bidder willing to pay the highest price for the item wins the bid and takes the item home — the same with online auctions. The main difference between traditional auctions and web-based auctions is that the actual bidding and selling takes place over the Internet with interested buyers submitting bids electronically. The person with the highest bid at the timed close of the auction wins the bid and arranges to receive the item. The auction site acts as the middleman in the buying and selling transaction process.
There are a number of ways you can use the auction model. First, you could build an auction website and let that be your business model. Or you could add an auction component to another e-commerce model. Many auction sites are built or sponsored by major vendors who have an established website, and use their auction site either to attract customers, or to offer merchandise that is surplus, outdated, and/or seconds.
Many readers, however, will find established online auctions such as those offered by eBay, Ubid, Amazon auctions, and Yahoo auctions a way to build a credible e-commerce business. Using an established auction website to build a web-based business is inexpensive and allows you to begin making a profit immediately: There are none of the expenses of the typical e-commerce model — no advertising costs, no hosting costs, etc. Auction sites receive billions (yes billions) of visits daily.
If you use one of the online auction sites as a means to enter the world of e-commerce, understand that you are responsible for listing your items on the auction site, and you assume responsibility for all aspects of your auction listings, including product descriptions, identification of quantities, establishment of starting and maximum bid prices, and shipping. Once the auction closes, it is up to you and the buyer to make arrangements for payment and shipping.
As online auctions continue to grow in popularity, more and more, entrepreneurs, retailers, manufacturers, and other businesses see them as a beneficial way to sell surplus goods, while consumers see them as a great way to save money and get great deals.
The largest and best known auction site is eBay.com. For sellers, the ability to market your product to millions of daily visitors makes using eBay one of the most efficient ways to sell just about anything. Potential buyers search for items and place bids on those they are interested in purchasing. At the close of an auction the highest bidder is the winner. At that point, the buyer and seller make arrangements for payment and shipping.
All you need to become an eBay seller is to register, which is free and only takes a few moments. However, eBay requires sellers to provide a credit or debit card, as well as enough details for eBay to check their “bonafides,” i.e. the potential seller provides eBay with enough information for the auction site to establish his or her proof of identity by cross-checking against consumer and business databases. If everything is kosher, the seller obtains an “ID Verified” designation, which enables them to place items for sale on the auction site.
Yahoo! also offers an auction service. Its seller requirements are similar to eBay’s, i.e. there is a registration (free) and all sellers must provide credit or debit card information.
If you have products that are more niche oriented, you might want to use an auction site that caters to that niche crowd, e.g. Allbadges.com is a police and fire memorabilia auction site; All Nations Stamp and Coin (www.downtownstamps.bc.ca) buys, sells and trades international postage, coinage and banknotes; BeerAuction.com specializes in “breweriana”; and wfpauctions.com specializes in Snoopy and Peanuts collectible items.
It’s difficult to define this type of website, mainly due to diversity of models adopted for individual weblogs (also known as “blogs”). But perhaps the Internet Librarian 2001 describes this interesting web-based genre the best: “A web page containing brief, chronologically arranged items of information. A weblog can take the form of a diary, journal, what’s new page, or links to other websites.”
Weblogs are to words what [the original] Napster was to music. (“Andrew Sullivan, Wired Magazine, May 2002”). In that same issue Sullivan says, “Twenty-one months ago, I rashly decided to set up a web page myself and used Blogger.com to publish some daily musings to a readership of a few hundred. Sure, I’m lucky to be an established writer [he also writes of The New Republic and The New York Times] in the first place. And I worked hard at the blog for months for free. But the upshot is that I’m now reaching almost a quarter million readers a month and making a profit. That kind of exposure rivals the audiences of traditional news and opinion magazines.”
To give you some ideas on how you can turn a profit with your blog, visit Sullivan’s weblog — Andrewsullivan.com. Also click on the “Info” button on the left side of the page and check out his Media Kit.
The key to the popularity of a weblog is the person or people producing it. Since weblog readers often develop relationships with the weblog author(s), interaction between reader and author is inevitable. Good weblog examples include Eatonweb.com, Scripting.com, Gizmodo.com, and Angst-identprone.org.
But you don’t necessarily need to establish a new website to attract a niche audience of readers. Since weblogs are ideally suited to interaction between people sharing special interests, some e-commerce businesses may want to consider adding a weblog to their website. A weblog’s capacity for information dissemination and feedback potential can tap into the buying power of a blogging community. For example, Greg Reinacker has a weblog on the Reinacker & Associates website (www.rassoc.com), although for some reason there is no link to the blog on the home page. The only way to reach the weblog is to type in the url: www.rassoc.com/gregr/weblog/default.aspx. Another website that has successfully incorporated blogging into its website is The Caestecker (Wisconsin) Public Library (www.greenlakelibrary.org). Also check out how Redmonk.net has incorporated blogging into its content offerings.
Some readers may be toying with the idea of sitting up a peer-to-peer (P2P) site. The way the Web was originally set up, the website owner posts content on a server (referred to as “web server”), and the audience connects to that server via a web browser to view the content. To interact live with other users, everyone connects to the same server at the same time. With P2P, however, the computers of individual users are connected together directly — no central server is necessary.
Still, a website is often used as an adjunct to a file sharing network to promote the network and to provide customer service. Peer-to-peer file sharing opens a whole new range of business opportunities. The original Napster (versus the new subscription-based Napster) brought P2P to the forefront, although the original Napster wasn’t a true P2P business model — it operated around a central server. However, it is noted that the old Napster’s central server concept also was the cause of the business’s eventual downfall. (At its peak, the old Napster was perhaps the most popular website ever created — in less than a year, it went from zero to 60 million visitors per month.)
As discussed previously, the new Napster doesn’t use P2P technology; rather it is a typical e-commerce site, with a hybrid subscription model that delivers downloadable music.
There are many alternatives to the Napster P2P model. One of the more interesting of these alternatives is Gnutella. Unlike Napster, Gnutella and its variants aren’t software at all; rather they are communication protocols similar to the common gateway interface (CGI) used by most web servers. Any software that implements a Gnutella-like communication protocol can communicate with other Gnutella-enabled software applications.
There are other P2P technologies available; examples include FreeNet, Publius, Yaga, and others in various states of completion. All are aimed at using P2P technology to allow the free exchange of information unencumbered by censorship and unmediated by the collection of market data.
It may be difficult to come up with a viable, profit-making business model for this type of P2P network. However, visit sites such as Bearshare.com, Livewire.com and Swapper.com, for examples of how current P2P file-sharing networks use websites to produce income.