Setting up an E-commerce Site - Coursework Example

? Draft of a Business Plan for setting up an e-commerce site Business Plan Draft 743955) Introduction E-Commerce is defined as the process of carrying out a business transaction using the modern technologies of digital and electronic communication. (Zorayda Ruth Andam, 2003) Parties in this exercise, i.e the buyer and seller do not meet but the transaction takes place electronically over the internet. The Business Plan As a business plan, the idea is to introduce a segment that would target a niche audience as well as create a platform for others to showcase their products on the website. I plan to develop a website that would cater to the lovers of art and painting. As part of my research I have found that there are limited areas where true connoisseurs of art are able to purchase quality painting or works of art. In cases where an actual physical auction takes place, some buyers miss the event simply due to their ignorance regarding the sale or they are not able to make it to the event due to prior commitments. The idea of such a website is that information regarding the best pieces of art that are up for sale are sourced from various countries through a ground network and these works are actually showcased in this website. A minimum price is fixed along with a cut off date so that art lovers can place their bid by the closing date. After the closing date & time, the piece would be shipped to the customers shipping address provided in the transaction using the services of a reliable courier like Fedex. (Zorayda Ruth Andam, 2003) The money after taking a percentage cut would be transferred via net banking to the creator of the artistic piece. The e-commerce infrastructure A robust infrastructure has already proved to be quite effective in the rapid growth of e-commerce. Source: Payman, Rosemario et al, May 2006, International marketing Some of the key drivers that have brought about this growth include 1. Both the private and public sector have entered into the telecommunication sphere providing robust broadband connectivity and also competitive pricing which has ensured newer customers are getting connected. (Zorayda Ruth Andam, 2003) 2. Policies framed by various governments have also proved beneficial since laws have been amended to recognise the validity of an electronic transaction. Government incentives to prep up this technology and support programmes to reach a larger customer base have paid dividends. (Payman, Rosemario et al, May 2006) 3. Social factors like the willingness of the both the newer and older generation who have embraced this technology and have asserted themselves in becoming computer literate. (Zorayda Ruth Andam, 2003) 4. Economic factors where higher GDP growth has lead to higher incomes have provided incentives to people to look for alternative shopping options. Innovations in banking like net banking, debit card and credit card banking have also helped customers to try out this area of virtual shopping. (Payman, Rosemario et al, May 2006) With these infrastructures in place the idea of a online site for quality paintings seems to be a workable proposition especially since the market for interior decoration is booming and there are people who, similar to gold are willing to invest in painting as they see it fetching them an exponential return should they plan to sell the same in the future. Marketing Concepts for the e-commerce environment and the use of social networking sites Some of the different models of e-commerce used for marketing of a product include B2B (business-to-business), business-to-consumer (B2C), business-to-government (B2G), consumer-to-consumer (C2C) and mobile commerce (m-commerce) 1. In the B2B model, businesses sell their products to other businesses. This model of marketing forms a significant chunk of the e-commerce market. (Zorayda Ruth Andam, 2003) This employs techniques such as e-distributor where a company hosts products viable for use in different businesses. 2. In the B2C model, the business transaction takes place between companies and consumers where a website stocks all requirements catering to a single or multiple products like books, medicines. Portals such as Yahoo, MSN can be used to display names of such unique websites so that people accessing these portals are redirected to the home page of this site on clicking. (Kenneth C Landon & Carol Guercio, 2009) A monthly subscription would be charged by these portals for such service. 3. B2G is defined as the use of the web by the concerned government agencies for public procurement. 4. m-commerce is simply defined as the marketing of products using mobile phone applications. 5. C2C commerce is a transaction that takes place between an individual and consumers. (Kenneth C Landon & Carol Guercio, 2009) The business plan draft required in this assignment is a form of C2C commerce wherein a website designed by me shall act as a platform for online auctions for products related to paintings and other crafts. The normal route of advertising via web portals like yahoo and MSN or displaying ads in other forms of media would be effective in the long run but quite costly for a start-up. The most ideal way to kick-start the exercise would be to create an attractive facebook page, set a link that gets redirected to the website and displays the products. (Patrick Dailey, 2009) Sending these to as many friends as possible should start the ball rolling since these would be forwarded further to newer set of friends. Initially indigenous artistes closer to home territory should be approached to display their artworks since it not only provides them a platform to showcase their products, but also enables them to get a decent price. They would also have to be least concerned about the hassles of marketing and distribution. Social networking also entails other areas like blogging sites, wikis, podcasts, online forums and content sharing communities like you YouTube. (Patrick Dailey, 2009) Communicating effectively in the e-commerce environment Communicating effectively in the e-commerce environment is very tricky as unlike a TV, where a dedicated slot is available for advertising a particular brand; people accessing the internet are able to view 5-6 screens at a time. It is therefore critical that catchy domain names that strike a chord with the consumer, attractive offers, the packaging of the home page, the ease of navigability of the consumer through the site and manner in which we market the site via social networking or chain e-mails become very important cogs in this whole exercise. (Patrick Dailey, 2009) Privacy and security issues in conducting business online The biggest impediment for any new consumer to transact online is the fear of his personal information like phone numbers, addresses, credit card numbers going public and the security breaches that might follow. Other concerns are regarding online sites selling their buying patterns to third parties without their consent. This is actually used by these marketing agencies for secondary research regarding the buying patterns of customers; the information which can be used by companies to refine their product to suit a target audience. (Small business, 2012) The security issue is regarding the stealing of credit card data when a customer punches in the same to make his/her purchase. However recent advances in technology have negated these security concerns to a large extent. Some of these include the use of encryption technologies such as Public key infrastructure (PKI). PKI based protocols employ Secure Socket Layer (SSL) or the ANSI X9. (Mark Ackerman & Donald T. Davis, 2003) Some of these tools could be employed to making our online purchase both private and secure. Ethics in online business It has been stated that there almost one thousand codes of conduct that are now in existence for businesses that are run in the traditional way. Using this as reference, guidelines are being drawn for a code of ethics to be followed in conducting an online business. However no amount of laws can prevent any wrongdoing unless the person or firm conducting the business adopts a policy of self regulation and adheres to set of ethics. (Anita Baker, 2005) Since the customer in an online transaction is not able to feel the tangible quality of the product, except rely on his vision and his sense of belief, it is our duty to provide the correct information regarding the product on our website. Also information shared with the website should not be misused. Electronic copyright, policies regarding credit card and taxation laws existing in each country are also some of the other issues that affect ethical practices. Implications of business-to-business e-commerce Business-to-business commerce would not entirely apply to my particular venture since as described earlier, B2B involves keeping of inventory records and also includes the entire logistics of distribution between businesses albeit on a bigger scale. (Deepak Khazanchi & Steve G. Sutton, 2001) Compared to B2B this would be on a smaller scale since paintings are not required in bulk volume. However, in the long run, the idea of creating a warehouse after sourcing the same from these artists is certainly welcome since one is never certain when a painter crosses the line from being just a painter to becoming a great painter. Remember Van Gogh. Hence this could act as a mix between B2B business and a C2B business model. Conclusion This business plan of working out an online site for selling of paintings and handicrafts is a viable proposition provided all the factors listed in this proposal fall effectively into place and customer is convinced of the fact that the painting being purchased is not a fake but a genuine one. References 1. Ackerman Mark & Davis Donald, 2003, Privacy and security Issues in E-commerce, New Economy Handbook, p.p 1-16. 2. Andam Zorayda Ruth, May 2003, e-commerce and e-business, e-ASEAN task force, UNDP-APDIP, p.p 1-20 3. Baker Anita, 2005, Are Standards becoming standard operating procedure, International Business Ethics Review, p.p 1-18. 4. Dailey Patrick, 2009, Social Media: Finding its way into your business strategy and Culture, Linkage p. 3-20. 5. Khazanchi Deepak & Sutton Steve , January 2001, Assurance services for Business-to-business electronic commerce, Journal of the Association for Information Systems, p.p 1-27. 6. Landon Kenneth & Guercio Carol, 2009, E-commerce business models and concepts, E-Commerce Business: Business, Technology and Society, p.p 63-115 7. Payman & Rosemario, May 2006, The Impact on e-commerce on International marketing, International Marketing p.17. 8. Small business, 2012, Problems of doing business on the Internet, p.p Retrieved 2nd November, 2012 from http:// smallbusiness.chron.com/Internet & Business. Read More