Chapter 4: Types of E-Commerce Providers and Vendors


Selling online has become an imperative for retailers and an increasing number of manufacturers. Recognizing that a 13% loss in customers can completely eliminate the profitability of their offline stores, retailers have raced to drive e-commerce growth to $66 billion in 2003 (5.7% of U.S. retail). By mid-2004, over 94% of the largest U.S. retailers (over $50 billion in annual sales) will be e-commerce enabled. And, for midsized retailers ($800 million to $50 billion in sales), over 74% will be selling online. Yet these adopters face a fundamental challenge: using the first generation buy/build model, many cannot make money at e-commerce, but none can afford to avoid trying. For most of them, owning and operating an e-commerce infrastructure does not make economic or operational sense.

With the preceding in mind, this chapter examines types of e-commerce service providers (ESPs) and vendors. It addresses three topics: why many early adopters have struggled with the first generation buy/build approach, how the next-generation ESP model delivers complete, one-stop online sales channels, and which major advantages companies gain by outsourcing their e-commerce infrastructure. You will also learn how an ESP model enables manufacturers and retailers to achieve profitability at $40 million to $180 million in online sales, focus your organization on real profit drivers—not technology, ensure reliability and scalability in your Web site and order processing, avoid managing numerous integrations and third-party service relationships, 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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