E-Commerce Test 11 &12

Digital storefronts (buyer side or seller side)

Online catalogs made public online by a single supplier (seller side because it only shows one supplier)

Lower transaction costs

Online it is easier to compare a lot of options

two methods of purchasing goods

Spot purchasing and contract purchasing(long-term sourcing)

Name your own price auction

This is a reverse auction = buyer states price and sellers fight to win the sale.

4 defining elements of social networks online or offline

a group of people / a shared interaction / common ties among members / people who share an area for some period

EDI (buyer or seller side)

a standard format for the electronic exchange of information between supply chain participants (buyer side because it reduces procurement costs of suppliers for buyers)

Transaction non-performance

accepting payment and failing to deliver

price matching

agreeing informally or formally to set floor prices on auction items below which sellers will not sell in open markets

bid rigging

agreeing offline to limit bids or using shills to submit false bids that drive prices up

indirect goods

all other goods not directly involved in the production process

adaptive supply chain

allows companies to react to disruptions in the supply chain in a particular region by moving production to a different region

price transparency

anyone in the world can see the bidding and asking price. hard to price discriminate

5 types of possible abuses and fraud in auctions

bid rigging / price matching /feedback extortion/ non-payment after winnings/ Transaction non-performance

Non-payment after winning

blocking legitimate buyers by bidding high, then not paying

Net Marketplace (buyer or seller side)

brings hundreds to thousands of suppliers and buyers into a single Internet-based environment to conduct trade (buyer side because the suppliers have to compete)

two distinct types of procurement firms make

direct and indirect goods

Three objectives of private industrial network

efficient purchasing and selling industry wide / increasing supply chain visibility / close buyer-supplier relationships

liquidity

finding willing buyers, buyers can find sellers

tenancy deals

fixed charge for guaranteed number of impressions, exclusive partnerships, "sole providers"

Applications and games

games and apps are sold to users; advertising is placed within apps

direct goods

goods directly involved in the production process

Customer aggregation

group of motivated customers looking to purchase something

industry consortia

industry-owned vertical marketplaces that enables buyers to purchase direct inputs (both goods and services) from a limited set of invited participants

equipment costs

internet auctions require you to purchase a computer system and pay for internet access

Delayed Consumption Costs

internet auctions requires your time to monitor bidding

Private industrial network (buyer or seller side)

internet based communications focused on collaboration (buyer side because it improves cost position and flexibility)(seller side because it reduces competition)

contract purchasing (long-term sourcing)

involves long-term written agreements to purchase specified products, under agreed-upon terms and quality for an extended period of time. used for vertical business

Supply Chain Simplification

involves reducing the size of the supply chain and working more closely with a smaller group of strategic supplier firms to reduce both product costs and administrative costs, while improving quality

Spot Purchasing

involves the purchase of goods based on immediate needs in larger marketplaces that involve many suppliers. used by horizontal businesses

sustainable supply chains

involves using the most efficient environment regarding means of production, distribution and logistics.

6 major trends in supply chain management

just-in-time production / accountable supply chain / supply chain simplification / adaptive supply chains / sustainable supply chains / electronic data interchange (EDI)

Benefits of Auctions

liquidity, price discovery, price transparency, market efficiency, lower transaction costs, consumer aggregation, network effects

horizontal market

market that serves many different industries

English auction

most common form of auction; the highest bidder wins

Private industrial networks

most prevalent form of B2B e-commerce. Their scope can range from a single firm to entire industry. focus on continuous business process coordination

vertical market

one that provides expertise and products for a specific industry

trust risks

online auctions are a significant source of internet fraud. Using auctions increases the risk of experiencing a loss

monitoring costs

participation in auctions requires your time to monitor bidding.

just-in-time production

parts arrive just before they are needed. seeks to reduce excess inventory to a bare minimum

Price Discovery

quickly and efficiently developing prices for items that are difficult to assess where price depends on supply and demand.

Commissions on sales

revenue based on sales at the site by independent providers

Electronic Data Interchange (EDI)

the computer-to-computer exchange of business documents from a retailer to a vendor and back. developed to reduce costs, delays and errors inherent in the manual of exchanges.

network externalities

the larger the auction site becomes the more valuable it becomes.

Feedback extortion

threatening negative feedback in return for a benefit

Fulfillment Costs

typically, the buyer pays fulfillment costs of packing, shipping, and insurance

Dutch Internet auction

where the lowest successful bid is the bid that gets rid of all the inventory

Market Efficiency

wider selection of goods at cheaper prices. reduced profits but higher customer welfare

Risks/Costs of Auctions

-delayed consumption costs -monitoring costs -equipment costs -trust risks -fulfillment costs

Automated order entry system (buyer or seller side)

A method using telephone models to send digital orders to suppliers. (seller side because it is owned by suppliers and are supplier biased)

List and describe 4 types of auctions

English auction / Dutch Internet auction / Name Your Own Price Auction / Penny Auction

Main revenue sources for the portal business model

General Advertising / Tenancy deals / commissions on sales / subscription fees / applications and games

Accountable supply chains

Labor conditions in low-wage, under-developed producer countries are acceptable to consumers in more developed industrial societies

Why has the FTC warned consumers about penny bidding auctions

Because they have to pay to bid which most people forget about when bidding in addition to paying what they bid, they also have to pay even if they do not win the product

Penny Auction

Bidder must pay a non-refundable fee to purchase bids

General Advertising

Charging for impressions delivered

Subscription fees

Charging for premium content