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ORF 401 - Electronic Commerce Spring 2004
Most Popular Search: Usher – 30,000,000 Searches/Month CDs, Books,
Concert Tickets,More…
1/1000 of theseusers = 30,000.
ORF 401 - Electronic Commerce Spring 2004
Low MaintenanceEcommerce
Synergizing technology with marketing to reduce workload and increase sales.
Low maintenance: Technology: CGI Script, XML, RSS. Marketing: SEO, Syndicated Newsletter.
Provide a service: Make search easier, make finding products and discounts easier.
“A business that makes nothing but money is a poor business.”-Henry Ford
ORF 401 - Electronic Commerce Spring 2004
Definitions Affiliate Program – Mutually beneficial relationship
between a website and a company. We use Amazon.com
Creatives – Promotional tools used to market affiliate programs. These include banner ads, and coupon codes.
Search Engine Optimization – making content highly relevant for both search engines and searches. Goal: gain top position for specific “keywords.”
Link and Code Driven Coupons: Offers specialty discounts by using a link or a code. Generally not organized online or by Amazon.com.
ORF 401 - Electronic Commerce Spring 2004
E-commerce – E-commerce – Then & NowThen & Now
THEN: March 10, 2000 – The dot-com bubble burst– 862 dot-com companies fail in the following
month– 368 e-commerce websites (43%) fail
NOW: Online sales for 2003 were $12.2 billion, up 42% from the previous year
71% of e-commerce sites were profitable in 2003
ORF 401 - Electronic Commerce Spring 2004
Amazon’s MarketAmazon’s Market One of the few companies to survive
dot-com bubble burst Amazon.com’s President Jeffrey
Bezos states: “The customer experience we create is by far the most important driver of our business.”
ORF 401 - Electronic Commerce Spring 2004
Amazon’s Market cont…Amazon’s Market cont…
Growth in Net Sales (in thousands)
Year Ended North America International Total 2003 $3,258,413 $2,005,286 $5,263,6992002 $2,761,457 $1,171,479 $3,932,9362001 $2,460,336 $662,097 $3,122,4332000 $2,380,908 $381,075 $2,761,9831999 $1,472,096 $167,743 $1,639,8391998 $588,013 $21,806 $609,819
ORF 401 - Electronic Commerce Spring 2004
Amazon’s Market cont…Amazon’s Market cont…Percentage of N.A. vs Int. Sales
0%
20%
40%
60%
80%
100%
2003 2002 2001 2000 1999 1998
Year Ended
Per
cent
age
North America International
ORF 401 - Electronic Commerce Spring 2004
Amazon’s Market cont…Amazon’s Market cont…
Total Net Sales per Year
$0$1,000,000$2,000,000$3,000,000$4,000,000$5,000,000$6,000,000
2003 2002 2001 2000 1999 1998
Year Ended
Net
Sal
es(i
n t
ho
usa
nd
s)
North America International
ORF 401 - Electronic Commerce Spring 2004
Discount Coupon MarketDiscount Coupon Market “In 2001, marketers distributed 333 billion coupons
and by redeeming them consumers saved over $3 billion.”
- Assoc. of Coupon Professionals
Burst! Media conducted a “study of nearly 8,000 web users [and] found that about one-in-five (19.0%) respondents have redeemed an Internet coupon.”
ORF 401 - Electronic Commerce Spring 2004
Discount Coupon Market Discount Coupon Market cont…cont…
ORF 401 - Electronic Commerce Spring 2004
Prospective Financials: Prospective Financials: SalesSales
Expected Expected Expected YearlyYear Ave. Purchase Commission Comm. per Day Commission
1 $30 $2.25 $337.50 $123,187.502 $30 $2.25 $585.00 $213,525.00
Expected Expected # Expected Expected #Year Commission Rate Click-Throughs % Purchase Purchases
1 7.50% 15000 1 1502 7.50% 20000 1.3 260
ORF 401 - Electronic Commerce Spring 2004
Prospective Financials: Cost Prospective Financials: Cost of Salesof Sales
Domain Name & Hosting Fees $52.00 per year
Marketing $0.00
Factory $0.00
Equipment $0.00
Maintenance $0.00
Total Yearly Cost $52.00
ORF 401 - Electronic Commerce Spring 2004
Prospective Financials: Prospective Financials: Balance SheetBalance Sheet
Dec. 31,2004 Dec. 31,2005Balance Sheet Items Year 1 Year 2
Current AssetsCash $1,000 $1,000Accounts Receivable $30,797 $53,381
Total Current Assets $31,797 $54,381Noncurrent Assets
Property, Plant, and Equip (net) $0 $0
Total Noncurrent Assets $0 $0Total Assets $31,797 $54,381
Current LiabilitiesAccounts Payable $52 $52
Total Current Liabilities $52 $52Noncurrent Liabilities
Long term Debt $0 $0
Total Noncurrent Liabilites $0 $0Total Liabilities $52 $52
Shareholder's EquityCommon Stock $0 $0Retained Earnings $31,745 $54,329
Total Shareholder's Equity $31,745 $54,329Total Liabilities and S.E. $31,797 $54,381
ORF 401 - Electronic Commerce Spring 2004
Prospective Financials: Prospective Financials: Income StatementIncome Statement
Dec. 31,2004 Dec. 31,2005Income Statement Items Year 1 Year 2
Revenues:
Sales Revenue $123,188 $213,525
Total Revenues $123,188 $213,525
Expenses:Domain & Hosting Expense $52 $52Income Tax Expense $0 $0
Other Operating Expenses $0 $0Salaries and Benefits Expenses $0 $0
Total Expenses $52 $52
Net Income $123,136 $213,473
ORF 401 - Electronic Commerce Spring 2004
Prospective Financials: Cash Prospective Financials: Cash Flow StatementFlow Statement
Dec. 31,2004 Dec. 31,2005Cash Flows Year 1 Year 2
Net Income $123,136 $213,473
Change Other Current Assets and Liabilities ($30,745) ($53,329)Cash Distributed ($91,391) ($159,144)
Cash $1,000 $1,000
ORF 401 - Electronic Commerce Spring 2004
SEO – Google Google’s goal to create a perfect
search engine. Not merely text analysis but HTML
analysis. How HTML analysis relates to
PageRank™.
ORF 401 - Electronic Commerce Spring 2004
Google – PageRank™ Why PageRank™ is important to our site. Gliding scale PageRank™ 1 – 10. How to improve PageRank™
– Do not use Spam techniques. – Do not use framed sites.– Do not "capture" outgoing links within a frame of your own site.– Do not link to other sites using a Java Script code.– The site should have its own domain name. – The site should not be hosted on a free server.– The site should have a professional, quality image.– Keep your site clean, neat and organized.– The site should not have excessive pop-ups.– The site should contain GOOD information and / or products.
ORF 401 - Electronic Commerce Spring 2004
SEO – GoogleAward Strategy
How We Will Increase PageRank™– Clutter Free Content– Meta Tags– Linking to other pages– Award Link Strategy
Usher, top listed sites. E-mail sites saying they have an award. We create
graphic, they display on their site with a link to an awards page and links to our products.
ORF 401 - Electronic Commerce Spring 2004
SEO - Google Concluding Remarks: How Search Engine Optimization and
Understanding Google can help our business not merely survive but thrive.
Low maintenance, & low cost. Effective
ORF 401 - Electronic Commerce Spring 2004
Amazon.com XML FEED Amazon Provides an XML Feed to
affiliates. Product information, shopping cart
script, product reviews, product information, price and sales rank.
We can use these free of charge.
ORF 401 - Electronic Commerce Spring 2004
Amazon.com XML FeedThe PROBLEM
Our Goal is to utilize Search Engine Marketing.
But, the scripts used to parse XML leave an ‘unfriendly URL.’
http://www.website.com/?prod=12 Dynamic content cannot be crawled by
Google.
ORF 401 - Electronic Commerce Spring 2004
Amazon.com XML FeedOur Solution
Mod Rewrite– Rewrites the CGI output in an HTML
format. – Search Engines don’t know it is a
dynamically created page.– We get crawled, all 500,000 pages.– With a lot of pages indexed, we will get
traffic galore.
ORF 401 - Electronic Commerce Spring 2004
Amazon.com XML FEEDLIVE DEMO
http://www.goalsearch.com– Amazon Daily Deals
Select any product.– It is indexed on our site.– ‘Search.’ for the product
– Regular links, browse directory. The directly links to roughly 500,000 products.
ORF 401 - Electronic Commerce Spring 2004
Interface When users search, they will most
likely find an internal page, not our front page.
We have ten seconds to impress our user and convince them to stay for their first visit, and come back for more.
ORF 401 - Electronic Commerce Spring 2004
Interface Two main issues:
– Credibility, Ease of Navigation Credibility
– Prominent display of Amazon.com logo– Professionally made graphics– Up to date coupons and newsletter
Users know the site is constantly monitored Ease of Navigation
– Each page must be accessed by at least two clicks.
Map, Link to Home Page, Simple Interface
ORF 401 - Electronic Commerce Spring 2004
InterfaceAttracting Repeat Visitors
Contextual Analysis– Script that searches for keywords– Consults a database– Displays a ‘guess’ of relevant coupons– Also general coupons (e.g. free shipping
on orders over $25, or $5 discount on mothers day).
ORF 401 - Electronic Commerce Spring 2004
Interface Attracting Repeat Visitors
Newsletter, constant reminder of deals and where to go.– Syndicated Content– Online Shopping Tips
Bookmark link script on each page
ORF 401 - Electronic Commerce Spring 2004
Conclusion Bargain shopper market is ripe and
ready for harvest. Low-maintenance and low cost: SEO,
Syndicated Content. Effective: Provide a service. Help
users find bargains. Untapped niche for service, ripe
market, and a unique idea = success!