Lecture 2

Lecture 2: Technology Fundamentals: Online Retailing Business Models

• Very quick review of class survey results
• Review of Homework 1
• Review wiki basics
• Web and internet technology fundamentals
  • Goal is to include only enough background for you to understand the business implications
  • Intro to how the web works
  • HTTP and other protocols
  • Origins of the internet and the web
    • The internet is not the same thing as the web
  • Clients and servers
  • Hosting
  • HTML - the language of the web
    • Right-click and select "View Source" in Windows
  • Creating and publishing web pages
    • Simple text editing tools
    • Simple wysiwyg tools and template-based tools such as Google Page Creator, FaceBook, MySpace
    • Full-featured web site design tools
    • Publishing
      • Hosting
      • Domain name registration
  • Very quick overview of web site production process
    • Planning: purpose, audience, goals, scope, organization
    • Implentation: gathering content, visual design, technology design, producing HTML
    • Testing: browsers/platforms, user experience
    • Maintenance: updating, revising, reviewing effectiveness in achieving goals and revising
• Retailing Continued
  • Finish DUB pies - profitability of online sales and online sales strategy
    • See PieShop.xls
    • Fixed and variable costs
    • Transaction costs
      • Shipping
      • Online store hosting and payments processing
  • Customer acquisition cost
    • How it's affected by marketing strategy
  • Who pays? Cost to the customer
  • Pricing decisions
    • Impact of competition
  • Business model
• Online Retailing - a new(ish) business model
  • Amazon.com
    • The long tail effect
  • Here's a great idea - Pets.com
  • Analogy versus analysis
• Dot Com Flops
• Important costs
  • Customer acquisition costs
  • Shipping and handling costs
  • Cost of delay to customer
  • Cost of risk to the customer
• When online retailing makes sense

• Homework 2
• Groups and group projects next week