i-Tunes
The iTunes Music Store from Apple Computer allows Mac and PC users to legally discover, purchase and download music online. It features more than one million songs from the major music companies and 600 independent record labels, over 9,000 audiobooks, gift certificates and exclusive music not found anywhere else online. Since its inception, Apple customers have purchased and downloaded more than 250 million songs from the iTunes Music Store. iTunes users are now downloading one and a quarter million songs per day, which is an annual run rate of almost half a billion songs per year. The iTunes Music Store is now available in fifteen countries, which together represent more than 70 percent of the global music market. [Source: Apple Computer, Inc., January 2005]

It includes:
· Social networking (publishing a website, staying in touch, sharing photos, exchanging files, groups forming, message boarding, making announcements and calendars)
· Freemiun model (free of charge creating and using of blogs, email boxes and websites)

1. How does the iTunes business model work? How is it different from traditional models for the music industry?

Revenue sources:
· Songs selling - 99¢
· Albums selling - $9.99 per album in most cases
· Providing iTunes Plus songs that feature higher quality, 256 kbps AAC encoding — twice the standard bit rate — and no DRM (digital rights management) - 30¢ more per song
· Advertising (mainly singers)

What is different in iTunes technology from traditional models for the music industry (benefits for the customer):

- Shopping for exactly the music you want
- One song at a time, or by album.
- Unlimited access (24 hours a day, 7 days a week) to more than 250 mln songs
- Thanks to the “Complete My Album” feature, when you buy a single from the iTunes store, you get a 99¢ credit for each previously purchased song from that album.
- Availability to choose iTunes Plus songs that feature higher quality, 256 kbps AAC encoding — twice the standard bit rate — and no DRM (digital rights management). That means you can play it on iPod and other digital music players and an unlimited number of computers
- Availability to listen to a 30-second preview of any song on the iTunes Store before you buy
- Availability to get personalized recommendations according to past song purchases
- Downloading of a new free single every week
- Learning about new releases and exclusives by subscribing to the New Music Tuesdays email and podcast
- Viewing celebrity playlists for a glimpse at your favorite stars’ taste in music
- Posting your own reviews and ratings, or reading what other music fans have to say about songs, albums, and music videos. As part of a worldwide community numbering in the tens of millions, iTunes customers keep you up to speed on everything they download
-Easy to find what you need (useful classification by genre and other criteria)

2. How does the iTunes model compare with other Internet music services, such as Listen.com?

What is Listen.com
Listen.com is a leading online music company that develops and distributes RHAPSODY, a digital music service. Launched in 2001, RHAPSODY gives consumers unlimited access to the world's largest library of music via the PC and network-connected home entertainment components today and on wireless devices in the future. RHAPSODY combines on-demand music, CD burning, customized and professionally programmed Internet radio, and engaging music information and editorial recommendations. In August 2003, Listen.com became a subsidiary of RealNetworks, Inc., the global leader in digital media services and software for consumers and businesses. [Source: Listen.com]

It includes:
· Social networking
· Freemium model (free 14-days trial; if you're not ready for a membership, you can still listen to 25 full-length tracks each month and have access to 25 Rhapsody Channels. It's a great way to see what Rhapsody is all about. You can listen directly via your web broswer or download Rhapsody Software for even more features)

2.1 What is the Listen.com business model(s)?

Revenue sources:
· Membership monthly charge ($12.99 for Rhapsody Unlimited, $14.99 for Rhapsody To Go) – allows to listen to the songs (without owning them)
· Fee for downloading tracks and burning CD with Rhapsody ($; 10% discount for the members)
· Advertising – singers, technique (mobile phones), etc. (http://www.realnetworksadvertising.com/terms.htm)
· Selling of adaptable MP3 players (Sansa Rapsody) ($140-250)
· Related products (headphones, transmitters, etc.) (60-130$)

What is the Sansa Rhapsody? How is it different from other MP3 players?
Will Rhapsody work with iPod?

The Sansa Rhapsody offers the optimum Rhapsody To Go experience. Like other Rhapsody-compatible MP3 players, it allows you to drag and drop tracks from the vast Rhapsody library so you can listen on the go. However, only the Sansa Rhapsody gives you Rhapsody Channels with a non-stop mix of songs based on your taste in music that automatically refreshes every time you connect to your PC. The Sansa Rhapsody plays MP3s, video clips, and photos, features a rechargeable Lithium Ion battery with up to 20 hours battery life, and a digital FM tuner and integrated voice recorder with built in microphone.

iPods are not compatible with the Rhapsody To Go subscription service. You may, however, use the iPod to play tracks purchased on Rhapsody. Or view the MP3 players compatible with Rhapsody To Go

Main differences between iTunes and Rhapsody models:
· Different charging models (iTunes – for separate downloading, Rhapsody – monthly subscription payment)
· Clients (iTunes – more than 15 countries, Rhapsody – for USA only)
· Number of songs available (iTunes - 250 mln, Rhapsody – 3 mln)


3. Can the iTunes model survive in an environment where illegal music downloading runs rampant?

The new technologies in music industry are definitely harmful for the music producers and labels-owning organizations. We can see that less and less people are willing to buy CD any more. First of all, it is more reasonable to buy single song you like rather that the whole album (electronic snacking) and second thing is that a lot of sites even don’t charge for providing the music – clients have access to huge amount of music (without the right to download it), like on the site … , for example. So, why to pay, if you can get it free?! The sites like that make its profit by advertising on the site.
Types of conditions:
Selling music (either single songs or albums) – iTunes,
Monthly subscription to the site – listening music without the right to download it (with or without transferring the property right) – Rhapsody,
Providing the music free of charge (with or without downloading) –

This last category of sites are the most harmful for the music industry.
Now the labels start more and more attacking the sites like that, trying to get them to justice for not respecting the property rights for music. But as the laws are still not very strong in the virtual world, it is rather problematic to struggle with the companies that don’t follow the rules. The majority of sites like that try to run away from justice by establishing the juridical company in the remote countries (often in the Middle-East), where no international or national laws are followed and hence, making it very difficult for the label companies to attack them.

Attitude of the users towards music copirighting

Electronic snacking

Electronic snacking is a new way of consumption by small portions.

Examples of electronic snacking in every-day life:
• Music (death of albums - new era of single tracks. Evolution: cassettes→ CDs→ MP3→ ITunes and phone ringtones)
• Film/TV (episodes, mini montages)
• Biz (retail clinics, Google bait)
• Games (short-lasting games, or levels of the game – for example, a 30-seconds game on Nintendo DS)
• Culture (popularity of post-cards for studying the history of events, mini-art pictures, emblems on T-shirts, Japanese haiku, Abraham Lincoln’s 272-word Gettsyburg Address in a YouTube-friendly two minutes etc.)
• Fashion (switching from the loyalty towards particular brand to mixing brands, mix of luxury brands with fast-fashion ones)

I think that electronic snacking appeared inevitably in our society. In the era of massive informatisation, it is more and more difficult to absorb tons of information in a full format. Instead of consuming one whole cake, people tend to prefer trying different tastes by consuming small peaces of different cakes. Assortment is so huge, that it is just boring to make any particular preferences, choosing something separate.

In the article An Epic History of Snack Culture in an interesting manner the evolution of Snack Culture (as of 15000 B.C.!!) is illustrated. Surprisingly, even inventions like tattoos, electric telegraph, readers digest, etc. made their contribution to this new way of consumption, called Snacking. The most modern ways of Electronic Snacking are: IPod (2001), The ny times goes RSS (2002), IPod Wending machine; Youtube; Current TV (2005), The 1 second film (2007).

An example of Social Shopping site

ZEBO

Type – private
Founded – August 2004
Headquarters – SanFrancisco, CA
Key people – Roy de Souza, Founder/CEO
Industry – Product ratings and reviews
Products – zebo.com and ZEBO Strip desktop applications
Website – www.zebo.com

ZEBO is an internet company based in San Francisco, CA. ZEBO hosts a website database of user reviews and discussions on what people own and what people want to buy. The web site is described as being "For what you own, For what to buy and For Friends". It also describes it as a "Better way to decide what to buy". ZEBO is in a new and yet unproven space that attempts to combine the undoubted success of social networks such as MySpace with consumers desire to buy things on the internet e-commerce. Some call this Social Shopping.

Geographic scope - ZEBO accepts members and discussions on any products by users anywhere in the world (though ZEBO is presently only available in English).

What one can do on ZEBO:
- create a personalized profile about what one owns, wants, and loves to shop for
- check out what other people have and want
- get and give valuable tips and advice
- talk online about one’s shopping needs
- discuss products with one’s friends
- rate products
- make shopping
- create photo albums and share them with the friends
- invite and grow the friends list and rank the friends

Some other features on ZEBO are:
• Celebrity profiles - What the stars own and want, as reported by them!
• ZEBuzz - Realtime conversation board where you can ask for advice, or just chat with other people who are bored, too!
• ZEBOStrip and Graffiti - Post your photos with the ZEBOStrip application, share them with friends and use the Graffiti feature to draw on them and write wacky stuff.
• WIWT (What I Wore Today) blogs.
• ZEBO Groups - Start a group about whatever you want to keep in touch with your friends about.
• Shops on ZEBO - A bunch of cool stores selling almost everything you can think of.

Categories of products that are available on ZEBO - Apparel & Accessories, Arts, Crafts & Hobbies, Baby & Parenting, Health, Books & Magazines, Electronics, Garden & Patio, Gifts & Collectibles, Home, Jewelry & Watches, Pet Care, & Sports & Fitness, Food & Beverages, Music, Office &Business, etc.

Revenue streams:
- ZEBO seller’s fees (all Individual Sellers pay a fixed fee of 5% of the item CPS (Cost Per Sale); the Merchant Sellers decide how much they would like to pay ZEBO. They can pay 10%, 15% or 20% of the CPS) – this is the main revenue stream for the company
-
Possible additional revenue in the future:
- Currently, there is no setup fee charge to become a ZEBO Shop Seller. However, this policy is subject to change at any time without notice
- The Seller can place his/her product in as many as three categories. Currently, the company doesnt set up to charge for additional placement, but may be in the future
- Organization of marketing surveys on the site (regarding different products or purchasing habits of the users)
- advertising on the site

Adding value for the users, how :
- ZEBO offers the most Seller-friendly pricing model. Most sites work on Cost Per Click (CPC), a web-site advertising method which means that the Seller pays for every click, which can include more browsers and surfers than genuine buyers. ZEBO works on a Cost Per Sale (CPS) model wherein the Seller is obliged to pay only when he has a confirmed sale

Unique characteristics of the site – the majority of Social Shopping sites don’t sell anything, but just provide the information about the products, whereas on ZEBO users can do both: studying about the products recommended by community and sell/buy the stuff.

Benefits for the user (seller):
- making money on selling the stuff the one doesn’t need
- low cost of selling
- no charge until one sells an item
- zero Risk (there is no deposit that the seller makes or minimum sales guarantee that the seller gives)
- establishing the cost per sale by the seller
- ZEDO is an experienced advertising based company and can sell significant volumes for the seller

Because the company’s business model is based mainly on the revenue from the selling/buying operations on the site (by its users), the main way to increase profit is increasing traffic on the sites (attracting more and more new visitors). This is achieved by:
• ZEBO gets its traffic primarily through leading search engines like Google and Yahoo. The ZEBO team has optimized the product pages so that the users’ products get top of the line display on search result pages of leading search engines.
• The site also uses its expertise in online advertising to get maximum returns from cross promotions it undertakes with other sites.
• Customers know that they can find the right product and right price they're looking for at ZEBO Shop. When they visit ZEBO Shop they get a combination of a variety of brands in every product category, great service, and competitive prices.

What is Social Shopping?

Social Shopping is a method of e-commerce in which consumers shop in a social networking environment similar to MySpace.
Social Shopping is based on the principles outlined in the wisdom of crowds where a large group of users can recommend products to each other and between them work out what to buy and which ones have the most buzz. Some of the leading companies in this field include StyleFeeder, Kaboodle, ZEBO and Chitika.

The useful links:

The Social Shopping Faceoff

Sharing With Others

Praized-Worthy today: Social Shopping Sites, Revenue-Sharing for User-Generated Content

Social Shopping: the current big thing?

New business model in social media - ki-work

Web 2.0 and luxury brands

LUXURY E-TAIL: WHO IS BUYING THIS STUFF?

Source: www.ecommercetimes.com
By Lesley Hensell
E-Commerce Times
11/18/03 4:02 AM PT

In terms of demographics, online customers who buy luxury brands are primarily women ages 25 to 42. A high percentage of luxury e-tail customers also graduated from college and have income of more than $60,000 per year, Ashford.com vice president Michael Dell'Arciprete told the E-Commerce Times.


A US$75 box of truffles. A $550 designer handbag. A $10,000 diamond ring. While these may not sound like the kinds of products consumers would rush to buy over the Internet, e-tailers are claiming growing success in selling to the wealthy -- or at least to those with expensive tastes.

"During the last big boom, from 1998 through about 2000, people bought more luxury items and got used to it," Ken Kellerhals, CEO of gourmet chocolatier Bissinger's, told the E-Commerce Times. "We've always thought that once a customer got used to our chocolate and saw how superior it was, it would be hard to go back. So we've been able to hold on to the customers we gained in the last boom. We really believe it's a push toward quality."


The Santa Boom
Like other e-tailers this year, Bissinger's is counting on hot holiday sales fueled by an improving economy. The forecast is bright: While most retail analysts predict overall holiday sales will increase by between 4 and 7 percent from last year's levels, they expect online sales to rise between 22 and 29 percent.
That is one reason why Bissinger's recently launched two new Web sites. Although the company's chocolate store has been online since 1999, last month it opened Bissinger's Marketplace, which sells gourmet foods. The firm also has begun offering corporate gift sales on its company Web site.
"We've tripled our presence on the Web this year and are very glad we did," Kellerhals said. "Sales have been growing at a pace of about 12 percent a year since we first launched online. And our Web site now represents 22 percent of total sales."
In the past, Bissinger's relied almost solely on catalog sales. The Web now helps the company reach younger customers, who often find the Bissinger's site via search engines, according to Kellerhals. Online sales also reap higher margins because the company does not have to mail expensive paper catalogs to e-shoppers.

Selling by the Numbers
In terms of demographics, online customers who buy luxury brands are primarily women ages 25 to 42. A high percentage of luxury e-tail customers also graduated from college and have income of more than $60,000 per year, Michael Dell'Arciprete, vice president of marketing for Diamond.com and Ashford.com, told the E-Commerce Times.
Sales at luxury e-tail sites have risen considerably in recent months, beating projected revenue in both September and October, Dell'Arciprete said, noting that he expects holiday sales to increase 30 to 40 percent year over year. Like Bissinger's, he considers his company's online sales to be somewhat recession-proof, since its upscale customer base is less sensitive to shifts in the economy.

Golden Rules
Dell'Arciprete cited three keys to selling luxury goods online. First and foremost, the e-tailer must sell authentic, branded items. "It seems basic, but there are a lot of people out there selling knock-offs," he said.
Also, at Ashford.com and Diamond.com, buyers can purchase the current year's styles rather than close-out merchandise and can take advantage of a 30-day, no-hassle money-back guarantee.
"If you spend $600 on a Gucci handbag, you'd like to know that your final decision on whether to keep it doesn't occur until after you've seen it and had it in your hands," Dell'Arciprete said.
Finally, the sites offer free shipping on orders of more than $150. With an average handbag price of more than $200, buyers do not want to be nickel-and-dimed with shipping charges, Dell'Arciprete noted. Plus, they can avoid sales tax by buying online, at least for now.

Information = Sales
In fact, Dell'Arciprete argued that buying a diamond online actually can be a safer and easier process than going to retail jewelry stores in person. Since all of his company's diamonds are GIA certified, the buying process is standardized, and consumers can easily compare prices between diamonds listed on various sites.
Scott Todaro, product marketing manager for commerce at ATG (Nasdaq: ARTG), agreed that large-ticket items can be more convenient to buy online. One of ATG's customers, Best Buy (NYSE: BBY), sells plasma television sets online for up to $10,000, Todaro told the E-Commerce Times.
"Best Buy estimates that 20 percent of all sales they make are influenced through the online channel," he said. "Over 50 percent of the people shopping in their stores are shopping them online as well."
This synergy enables consumers to educate themselves about large-ticket items online before making purchase decisions, he added.

Getting Personal
Another ATG customer, luxury retailer Neiman Marcus, has invested in online technology to try to create the same personalized shopping experience over the Internet as in its stores.
Last Christmas, Todaro said, Neiman Marcus targeted male shoppers, who tend to wait until the last minute to purchase gifts and are therefore less price-sensitive.
"They tried to create a sense of urgency for male customers," he noted. "And they had a tremendous success ratio getting these customers to act."
The personalized online shopping experience includes push e-mail based on past purchases and browsing activity, loyalty programs and ongoing communications.
"For a high-end item, customers want the greatest level of service possible and the greatest amount of information possible," Todaro said. "It's our goal to make this happen online, just as it does in the stores and catalogs."
If luxury e-tailers can succeed in expanding their customer base while maintaining their existing core of recession-proof shoppers, they could secure their position as one of the linchpins of e-commerce.

Class work 10.03.2007

ANALIZING THE THREE COMPANIES' CONCEPTS (Innocentive, YourEncore, NineSigma).

Key differences

1. Different data collection:
-Innocentive posts to their recruited network of scientists
-YourEncore posts projects to retired corporate technical personnel
-NineSigma posts Requests for Proposals (RFPs) globally to an open network of inventors, universities, and small/medium/large companies

2. Different fee systems:
- Innocentive charges fee from the Innovation Seekers, who seek for the “best” solutions only
-YourEncore charges fee from
-NineSigma charges fee from all the Innovation Seekers who seek for info (the company connects the Seekers to the results)

3. Different approaches to treat the Solution Providers:
-Innocentive rewards the providers of the “best” solutions only
-YourEncore pays to each employee at a rate that is based on their base salary upon retirement. YourEncore adjusts each salary for inflation and adds a 20% premium to cover bonuses and other related non-salary components of their compensation. With these adjustments and premiums along with the fact that YourEncore pays the employer portion of payroll taxes, carries worker’s compensation insurance, and handles the time consuming tasks of marketing, placement and billing associated with assignments, the retired expert enjoys an attractive compensation for their services
-NineSigma doesn’t reward the Solution Providers


Shared concept
All three companies provide services in scientific research field by intermediating between Solution Seekers and Solution Providers.

ANALIZING THE EASYJET CONCEPT

1. The main sources of revenue

To gain the low-cost leadership strategy the company implemented the following actions :
1. Offering no commissions to travel agents (all the services are provided via internet)
2. Eliminating meals during flights
3. Savings in turnaround time (the key to profits is keeping planes in the air). EasyJet flies only short-haul routes and the company uses only one type of airkraft to minimise parts stock, training and maintenance costs – and to reduce downtime.
4. Negociating low cost with new and existing airports
5. Continuing implementation of more efficient technologies
6. Obtaining profitable conditions of airbus leasing


Additional Revenue sources

From comissions

- Hotels and apartments revenues
- Car rental
- Lounges
- Easy pizza ( food)
- Airports parkings
- Easy bus
- Easy cruise
- Insurances


2. Oppurtunities

- More advertising from the partners
- Affiliation programs (credit cards, mobil operators)
- To create a community
- Business collaborations
- To do more partnerships
- To change the lifestyle of people
- To fidelize the customers with their services
- To create more connection like easy cinema and easy meetic.
- Easy video games
- Easy excursions
- Easy meetiq
- Easy bet
- Easy fast food

3.Cross marketing
- the key element of the owing is the community of the cients
- it’s a networking marketing, with the different product that the company can offer.
- searching for all the opportunities that emerge on the market to provide to the community (Ex. Selling Easy Pizza in the Easy Cinema)

EASYJET BUSINESS MODEL

EasyJet aircompany was founded in 1995 by Stelios Haji-Ioannou. Early on, Stelious came to conclusion that many passengers just want to get from point A to point B at the lowest possible price, so he started an airline without frills named EasyJet.
The company’s main winning ways to work :
• Determining customer needs and motives
• Constracting financial forecasts and budgets
• Low-cost leadership strategy

To gain the low-cost leadership strategy the company implemented the following actions :
1. Offering no commissions to travel agents (all the services are provided via internet)
2. Eliminating meals during flights
3. Savings in turnaround time (the key to profits is keeping planes in the air). EasyJet flies only short-haul routes and the company uses only one type of airkraft to minimise parts stock, training and maintenance costs – and to reduce downtime.
4. Negociating low cost with new and existing airports
5. Continuing implementation of more efficient technologies
6. Obtaining profitable conditions of airbus leasing

Innocentiv.com

1. What is it?
InnoCentive® is an exciting web-based community matching top scientists to relevant R&D challenges facing leading companies from around the globe. They provide a powerful online forum enabling major companies to reward scientific innovation through financial incentives.

InnoCentive matches top scientists to relevant research and development challenges facing leading companies around the globe, for rewards up to $100,000 USD or more.

InnoCentive is a market place.

2. Who owns it?
InnoCentive is a start-up business venture incubated through the e.Lilly division of Eli Lilly and Company, a leading innovation-driven pharmaceutical corporation. Lilly was the first seeker company at InnoCentive providing leadership on the initial InnoCentive problems and awards. InnoCentive is incorporated as an independent company, and partners with various Seeker companies in many science-driven industries to revolutionize the way scientific R&D is done.
The founding Seeker company is Eli Lilly and Company, a leading innovation-driven pharmaceutical corporation.


3. What is the business model?
InnoCentive has established an expert community of problem solvers. The Seekers get their problems posted to a global community of research scientists and then pay for the solutions to problems that are judged "the best" (so, as for the Experts' solutions, only the one deemed "best" by the Seeker will receive a financial award). The solution Seeker pays InnoCentive for this service and problem formulation expertise.


4. What problems does it solve?
Multibrain:
-Time saving
-Money saving
-Reduces the cost of R&D for the company
-Recognition for the talent of the scientists

Class work
FREEMIUM SITES

1. OTHER than core revenue sources:-sale of goods and services
-advertising
-subscription
Please list 3 additional revenue sources in e-commerce.
- technology (franchising, selling…)
- investing the funds in outside businesses
- using data-base

2. If "market segments are dead", how are segments replaced? Why is it important to the digital economy?To find the new market to project on is easy if the company has a big data-base (that is why big companies like Skype, Amazon, etc. have such a flexibility in actions).

3. How can 'free' generate revenue for an online business? Please include your favorite example.- Advertising: from the outside, from the users. Ex. Swicki
- Extra services/products payable Ex. Skype
- Using the data-base (segmenting, advertising). Used by almost all the companies

Some examples of free e-businesses:
1. Blog free (blogspot…)
2. Free chat services (ICQ, MSN messenger…)
3. Free mail services (google, yahoo..)
4. Free games
5. Free personal services (online dating services)
6. Free screen savers
7. Free software (anti-virus freeware, free disk drive utilities)
8. Free sounds
9. Free fonts (logos..)

AN INTERESTING ARTICLE ABOUT SUCCESSFUL E-BUSINES MODELS
link

If you want to build something...first find a model!

During the past week, I have spent a large amount of time studying successful web sites and finding out what it is that is separating them from all of the run of the mill web sites which are just there.

It is really interesting when you stop for a moment and look at why certain sites are becoming extremely successful on the Internet. What really stood out to me more than anything else was the variety of different types of businesses there were out there.

I researched extremely successful sites which focused on web hosting, business opportunities, pet products, golf, computers, information, and even paint thinner! Anything, if planned appropriately, can be sold online.

The other thing that has stood out to me is the variety of different models of success there are out there. A key to being successful in any venture is to find a business which is already doing what you want and model after them. Play follow the leader.

I cant go into every model of success I have found, but I do want to introduce to you six different models which kept springing up over and over again in successful sites.

As you look over these models, you may find that you are on your way to becoming just like that type of business. If so, good. If you dont see anything listed here which is what you are trying to do, you really should stop for a minute and organize your plans to more closely follow a successful web site model.

You may even find that your business fits into more than one of these categories...if so, again you are probably following the right road in your business.

Model #1 - Free Information Provider and Opt-In List Builder

These two things go hand in hand. For months you have heard me tell you over and over again that the profits in an online business are in the Opt-In List. Well, it is still true and I am going to keep right on telling you this.

Look at the most successful business online and almost without fail they are the same businesses which are building the Opt-In Email Lists. One key that you have to remember though is that you MUST provide high quality information to your list and not just a bunch of ads. If your newsletter is just an ad sheet, you can be assured that it will almost NEVER grow!

Then, learn how to write effective offers which ride right along with each of your mailings to the list. Once your list begins to grow, you will find out just how easy it is to build a Guaranteed Monthly income on the Internet.
Advantages: You can build your list up each month and watch your guaranteed monthly income go up right along beside it. It can be an easy way to create a Residual Income no matter what products or services you are selling.

Disadvantages: You have to like to write. If you hate writing and only want to send out pure advertising without value, you will find that this is a very hard road to travel.

Model #2 - Malls and Co-Op Advertising

Another successful model I found were sites which could almost be considered malls with many different products and advertising opportunities. Although a site like this wouldnt be successful in most cases by directly advertising, the mall owners came up with a very simple and effective method of creating awesome traffic at their sites.

They would start Co-Op Advertising online, in postcard decks, in magazines, etc. They would buy a large ad or postcard deck card and then split it up between 10 - 20 others and everyone would pay a small share. Then, the mall owner who is running the co-op would get his share for free and even sometimes make a small profit from the deal.

Being a co-op participant can be a low cost way of getting traffic to your site, but the real opportunity opens up when you start running co-ops yourself in this manner. I know of one Internet marketer who gets over $150,000 a year in free advertising by running these types of co-ops!

Advantages: You can get $100,000 or more free advertising if you schedule enough co-ops and they produce good leads for each of the participants.

Disadvantages: If your co-ops dont work for everyone involved, expect to have some serious trouble growing.

Model #3 - Free Services and Paid Advertising

If you find a service people need such as autoresponders, forms on their site, search engine listings, traffic tools, etc., you may find that this is the model for you. Sites which provide something extremely valuable for free can often take their traffic counters into the thousands literally overnight...then they can start charging people for placing banners and other types of advertising on their site.

You may think it is hard to come up with a Free service to drive traffic to your site, but it really isnt that difficult. Spend some time over at http://www.cgi-resources.com which contains thousands of CGI programs, many of which are low or NO cost. Some of them would also make great traffic generators if you would position them on your site in a unique way.

Advantages: You never have to pay to advertise this site. If your Free Service is extremely valuable and unique, word of mouth and press releases will be all of the marketing you need for it.

Disadvantages: The hard part is coming up with the winning idea.

Model #4 - One Product Page and Paying for Advertising

People dont talk about this technique as much as some of the others, but I have found it to be one of the easiest ways of making a good income online. When you find a hot product that you know a certain market is interested in, then focus on putting up the best sales letter possible with just one or two pages about the product.

Then, focus all of your marketing towards bringing people to that page. By presenting people with only one choice at your site, you eliminate any of the possible confusion or distraction which come with multiple page sites. From studying all of the different models, this one will usually have the highest response rate per visitor.

After someone buys your first product, you can then introduce them to all of your other products and services on the backend to create multiple income streams.

Advantages: This type of site has the highest sales rates of web sites because it eliminates the confusion and distractions.

Disadvantages: The biggest disadvantage is that you cant expect too much free traffic. You will have to pay for all of your traffic in most cases.

Model #5 - Catalog Sites and an Affiliate Program

Many sites have hundreds of products and services so choosing a lead product like the above model just doesnt make sense for them. Usually in these cases, I recommend going with creating a catalog site and building a network of affiliates.

Look at the size of Amazon.coms affiliate program. It is quickly establishing itself as the number one bookseller in the world. No one else is even close. Much of this is due to one factor...their affiliate program.

Every day new affiliate programs spring up...and go down. If you have a selection of products which have a strong USP and are good sellers online you have the makings of a good affiliate program.

Make sure to allow your affiliates to link to specific products also, not just to your main
site. This will allow them to earn maximum commissions.

Advantages: This is the way to take over a large market share on the Internet...expect to see in the coming years that probably as many as 40% of the top profiting sites will be affiliate programs.

Disadvantages: You have to support your affiliates better than the average site AND you have to be able to handle the amount of orders that will be coming in. Neglect either one and your affiliate program wont last long.

Model #6 - Community Building Even If You Dont Have a Product to Sell.

The other side of the affiliate program are those who sign up as your affiliates...the most successful of which will usually be those who have built an online community around a certain subject or hobby.

By putting up a discussion group, providing links to interesting content, publishing an ezine, and more you can build an online community around a specific subject that interests you and others.

Then, as your traffic grows, you can join affiliate programs or set up joint ventures to offer your audience products or services which are of great interest to them.

Advantages: You can start this type of business without even having a product or service to sell. You can build a traffic base and then ask your visitors what it is that they want. Then, you can find the exact products or services they want and need!

Disadvantages: You will have to go without much income for a while until your traffic begins to grow to a high level.

Each of these models presents a possible online business for you. Which one interests you the most? Which one do you understand the best?

Which one would your enjoy?

Pick one or more of these above business models for your Internet business and you will have taken the first step to Internet success...
"Getting Started."

About the Author

Terry Dean, a 5 year veteran of Internet marketing, will Take You By The Hand and Show You Exact Results of All the Internet Marketing Techniques he tests and Uses Every Single Month" Click here to Find Out More: http://www.netbreakthroughs.com

AMAZON BUSINESS MODEL

Amazon.com (NASDAQ : AMZN) est une entreprise de commerce électronique américaine basée à Seattle.

Sa spécialité la plus connue est la vente de livres. Elle a notamment été appelée plus grande librairie du monde. Elle se diversifie dans d'autres produits, et notamment dans la vente de tous types de produits culturels : disques CD, films, appareils photos numériques, etc.

Il a été crée par Jeff Bezos, son PDG actuel (2005), en juillet 1995 et introduit en bourse au Nasdaq à New York en mai 1997. La filiale française ouvre en 2000.

En 2005, la société emploie, de par le monde, 9000 personnes. Le chiffre d'affaire de 2004 est de près de 7 milliards de dollars avec sept filiales nationales.

Sommaire
1 Business model
2 Entreprises similaires
3 Le groupe Amazon
4 Liens externes

Business model
Pendant longtemps, Amazon.com a perdu de l’argent à chaque livre vendu en raison de ses importants investissements pour s'étendre, mais cette politique était délibérée : elle constituait en effet dans le même temps un fichier d’adresses assorti de préférences personnelles (astronomie, voyages, culturisme...) monnayable très cher auprès des publicitaires pour toucher un public ciblé, par exemple en ligne. Tout comme pour TF1, la captation d'attention permettait de vendre de l'audience, ce qui constituait la véritable source de revenus d'Amazon ! La première année réellement bénéficiaire est 2004, année où les ventes de matériels dépassent ceux des produits culturels. En juillet 2005 Amazon a lancé sa section française de l'électronique vendant des articles tels que des télévisions LCD.


Entreprises similaires
Il faut observer que seul Google, crédité en 2001 de dizaines de milliers de serveurs pour assurer un service de recherche gratuit, fait encore mieux dans le genre : il ne vend en effet rien à son public (le service est gratuit), mais « vend » en revanche le public effectuant tel ou tel type de recherche à ses annonceurs.

Par son activité, Amazon se rapproche énormément de la FNAC. Les différences sont néanmoins importantes entre les deux entités. La FNAC dispose de magasins physiques dans lesquels le public peut se rendre pour acheter les biens proposés, alors qu'Amazon ne les propose que sur internet. Cela diminue les coûts d'Amazon bien entendu et lui permet d'être très compétitif, même si les prix des biens culturels sont assez figés. Amazon.com fut le premier vendeur sur internet à vous donner, lorsque vous achetez un livre par exemple, une sélection des articles achetés par les internautes ayant commandé le même livre que vous. Cela permet de puiser des idées auprès de personnes ayant les mêmes goûts que vous.

Société souvent classée dans les "clicks", entreprises internet, par opposition aux "mortars", entreprises traditionnelles, Amazon a cependant une activité traditionnelle (vente et logistique d'objets physiques) pour laquelle Internet ne représente qu'un (formidable certes) accélérateur, un accès à un marché global, et un moyen de casser les coûts de structure par rapport à un libraire "mortar" comme la Fnac en France ou Barnes & Noble aux USA (il est d'ailleurs à noter que ces deux sociétés, aujourd'hui présentes sur Internet, sont souvent désignées par le vocable "click and mortar"). On oppose souvent Amazon à eBay, dont le business model est radicalement indissociable de l'Internet, à la différence d'Amazon.


Le groupe Amazon
Parmi les sociétés du groupe Amazon.com, on peut citer les moteurs de recherche Alexa et A9, ou la base de données cinématographique IMDb.

VENTE-PRIVEE EVOLUTION

Vente privee was launched in 2001, just after the internet crash. The company operating in internet business was in a stage of stagnation and was forced to seek for the new availabilities to survive. The idea was to sell the clothes from the net. It started from “Weston”, a famous shoe brand. It was a lucky beginning: around 200 people were queuing making a lot of purchases.
This first success gave an idea for the company to grow its market presence through making the deals with the diversified brands, willing to sell on the net.

The cue element of success was partnership with a lot of new brands.

To create an exclusive impression from the site on the clients, the company created a new marketing strategy: any new client can only get an access to the site via the “parrain” (friend).

At the moment the company has … subscribers, more than 200 mln Euros of revenue.
Because of this growth, the company decided to develop its assortment of the products proposed on the site: now besides clothes it proposes wine, plants, products for dog and even cars.

The strength of the company is in anticipating in the needs of the clients.
Last year the company launched the same business in the new markets: in Germany and Spain.

The new opportunities for this business model:
1. Enlarging the sales in the new areas (cars, houses)
2. New market places
3. Developing new creators (designers)
4. Building of community
5. Licencing of the business model and creating a franchising chain worldwide (technology)

Scarlett
Fabrizio

TOP LUXURY BRANDS FIND NEW MARKETS IN INDIA

VENTE PRIVEE BOOM

More and more sites that provide vente privee are emerging on the net. The main principles of their functioning are: selling of the big brands for reduced prices (discounts up to 80%) within the limited amount of time (normally not more than 48 hours, though may be up to 1 week).

For being able to participate in these sales, the person should be invited on the site by his/her friend (parrain), who is already registered on the site.

Normally these sites sell clothes, though while this business model is developing , there are more and more other proposals you can meet : food, wine, products for animals and even cars.

The pionnier of the vente privee system was the site vente-privée.com, which operates since 2001 and is really a leader on this market, with the annual revenue exceeding 200 mln Euros, which is constantly growing.

The huge popularity of these sites (more than 70 in France now) is explained by the business-model, which is very lucrative. The system of vente privee is attractive for company itself, for luxury suppliers, and, of course, for customers.

Luxury suppliers benefit from the possibility to sell theis unsold collections (stock-house) very fast (increasing the speed of turnover of the capital) without spending money on advertising, storage and logistic. The big brands work more and more with small limited series which require a constant destocking. For the image of the brand it is rather damaging to expose the devalued unsold clothes in the boutique for a long time. So, this other source of selling its stock-house through the vente privee sites serves like a huge support for the producer.

The brands also profit from the transforming of the care for the stock-house to the third party (vente privee site). For example, vente-privée.com has at its disposal 18 photo-studios and a team of models, graphists and music professionals to provide a top image for the goods, represented on the site.

On top, for the brand it is an extra advertising availability. The customers of vente privee sites get acquainted better with the brand (its style, designs) and one day may wish to buy something in a real boutique.

The company benefits, as it charges some fee on the goods it sells. So, without producing anything and without spending money on operating a shop (as opposed to a phisique boutique), the site makes good profit operating like a mediator.

The customers benefit as they can obtain the top brands for a reasonable price. On top, it can save a lot of time, as it is much faster and more convenient than rambling through a number of phisique boutiques. Everything is rather simple here : several clicks, a number of the credit card and the client can get the dreamed object for a good price.

Though there are some disadvantages as well on these sites : first of all, each sale is very limited in number of articles and in time provided for making a deal. In the same time, the amount of participants, willing to get a product is huge and is growing all the time. That is why, sometimes it occurs that the desired object, that the customer sees on the announce screen, is not available any more in the moment he/she wants to orders it.

Second disadvantage is usually the time it takes to deliver the ordered object. It happens as normally the sites of vente privee dont have any stock at their disposal and should order thelmselves the desired products from the supplier.

That is why, the site vente-privee.com created two big stocks now and can minimise its delivery time.

The target customers of the sites like vente-privee.com are : young people (20-35 years old), who got used to utilize internet in many ways (this kind of customers occupies the biggest portion of buyers through internet as they are more advanced and more internet-oriented than the older generetions) ; business people (for whom the main advantage of it - is time saving). Potentially any person that is interested in fashion for reasonable prices is a client for the vente privee sites.
Nowadays the number of clients of any internet shop is groving rapidly, involving more and more diversified groups of people.

CLOTHING COMPANIES CASH IN ON E-COMMERCE
13 February 2007 Source: just-style.com

Despite the limitations of selling fashion over the internet, online purchases appeared to buck the downward trend in festive retail sales. Rebecca Danton finds out why more and more retailers are turning to e-commerce, while new research suggests that online fashion sales could increase by GBP134m (US$264m) a year if websites address customer behaviour patterns and provide more product information.

The high profile collapse of Boo.com back in the late 1990s, despite an investment of millions of dollars and the incorporation of sophisticated technologies that allowed shoppers to see clothes at 360º angles, contributed to the slow uptake of online activity by clothing retailers.
But even so, the sluggishness of fashion’s entry onto the online stage has baffled many critics.

Marshal Cohen, analyst at the NPD Group, confirms that the fashion sector has been “one of the slowest to adapt to online retailing. Autos, homes, pharmaceuticals… all have been more online centric than fashion, which is supposed to be in the forefront.”

Some critics argue the many undeniable limitations and challenges of online retail are holding fashion companies back.

As industry experts point out, some shoppers are turned off the idea of shopping for clothes because they can’t try pieces on.

Not only does this take away part of the buzz for some consumers – especially those who cite clothes ‘shopping’ in its traditional form as a hobby – it can also be an added complication, with unpredictable sizing and clothes looking different in real life to the way they appear in an image.

Sales easy to lose

Jason Kemp, managing director of retail operations specialist Envision Retail, points out that on-line shoppers are also ruthless. “They will abandon a purchase at any stage in the process if they are irritated or can’t find what they want, demonstrating just how fragile a process it is and how easily a sale can be lost. “At the beginning of their search, around 75% of on-line shoppers will leave a site if a page does not download quickly or is not available. Once on a site, if a page takes longer than 7 seconds to download, 57% of shoppers will leave immediately, with just 14% willing to try again,” adds Kemp.

More standardised sizing could help with the fit issue, while a wide range of technology exists that claims to showcase clothing in a manner almost on a par with that of a bricks-and-mortar shop.

But, it could be argued, the more technology is employed the more can go wrong. Not only from a user’s point of view – as with Boo.com’s misjudgement of what sort of site its target audience wanted and could use – but in many other aspects from misplaced and overlooked orders to complex web pages freezing and causing people’s computers to crash.

One way companies can cut down on the risk of technical problems is to bring in an outside technology firm/online specialist. In fact retail giant Marks & Spencer went so far as to call in the services of leading internet retailer Amazon to develop its e-commerce operations.
While M&S has stayed responsible for managing its own site customer service operations, warehousing and distribution, Amazon has been working with the company to update its website after it struggled to cope with demand during a period of busy trading.

Fashion firm Lindex told just-style it too has employed the help of an outside technology firm as it sets up to sell online.
“We are trying to make the e-commerce website as integrated as possible to streamline the process,” says Ulrika Danielson, the company’s director of corporate communications, admitting that, nevertheless it was still faced with a number of “difficult issues” to solve.

Online tricks

Some of the tricks that could increase online fashion sales by more than GBP134m a year, according to a survey into Internet shopping behaviour by Envision Retail, include increasing the download speed of a page, and providing detailed information which actually slows down the purchasing process but helps the shopper bond with a product. The company, whose customers include Metro Group, Nike and Bon Marche, points out that fashion surfers need more imagination to assess a product’s suitability. “While shoppers’ brains screen out 99% of the visual stimuli they are presented with on the high street, it is only 45% when they shop on-line,” explains Jason Kemp. “So there is a huge opportunity to provide even more pictures of products, from various angles, in close up, to get customers hooked – but getting them to that stage means that any previous searching and downloading has to be fast.

Because they can’t touch the garment, fashion surfers need more imagination to assess a product’s suitability.

“They physically move towards the screen to try and get a closer look; they stop to think while they imagine wearing the item and then check out descriptive words to understand the texture,” explains Kemp.

He adds that a website design built to create this ‘Quick-Click-Slow’ shopping experience will help minimise the percentage of consumers who abandon a purchase mid-search.

Where a retailer suggests a complementary accessory – belt, bag or jewellery – shoppers stay on the site longer, 40% of shoppers will actually view the item and there is a 3% chance that they will buy.

Legal issues

Some internet retailers also have legal issues to contend with.
Online marketplace Ebay has found itself at the receiving end of a number of lawsuits for allegedly failing to stop the sale of fake goods on its site. Despite the company’s protests that it takes the issue seriously, some have likened the apparent wide availability of counterfeits on its sites to China’s infamous pirate hotspots.

Again, there are ways this can be tackled. Online brand monitoring and counterfeit detection firm Net Enforcers recently joined up with private investigator Gobi International to step up the fight against the sale of fakes online by detecting, tracking and uncovering illegal manufacturers, distributors and sellers.

But, as in high-street retailing, cracking down on counterfeits is never straightforward and there’ll always be some who slip through the net, however strong and wide that net is.
Turning to a different type of retailer, another source of contention could be that going online is yet another way for retail giants to monopolise the retail market.

Tesco, for example, recently told just-style of plans to trial clothing sales online – even though the company has already been subject to an inquiry into its increasing domination of the grocery sector and is now being slammed for taking over big chunks of a growing number of other, non-food markets.

However, a spokeswoman for Tesco told just-style the company queried the ‘non-food’ categorisation as a lot of competitors are larger in separate areas.
She also denied that Tesco was trying to take other companies in the online clothing market, adding: “Clothing is a relatively small business for us at the moment but it is growing quite quickly,” and said that “the customer would be the winner” from the expansion of clothing retail onto the internet.

Despite its pitfalls and the complications it brings, when it is done well online retail does have a great deal of advantages for retailers and consumers. And despite its slow entrance into the apparel sector there have been a few examples of the successes to be had – Bluefly, Asos and Net-a-Porter to name just a few.

Unlike high street shopping, online requires a minimum of effort; a sure bet for those in a hurry or people who struggle to get to the shops.