E-Commerce: Components, Business Model And Benefits

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Introduction of E-commerce

What does e-commerce mean? E-commerce is an outstanding buzzword in the online business revolution. It captures the excitement and focus of this fast-growing market. However, it is more than just a slogan or glib party route. Its core embodies the concept of online business. E-commerce is the exchange of paperless commercial information using electronic data interchange (EDI), e-mail, electronic bulletin boards, fax transmission, and electronic funds transfer. It refers to Internet shopping, online stock and bond trading, download and sale of 'software' (software, documents, graphics, music, etc.), and business-to-business transactions.

The concept of e-commerce is to make use of the Internet better and conduct business faster. It is to enable customers to control access to computer systems and allow people to serve themselves. This is about getting a company to work online seriously and integrating the website with the core of the business. If you do, you will see the result! This is a way for people to communicate with each other. This is also a way for consumers to communicate with the company's computer system without manual intervention. In fact, the Internet is a medium of communication, just like many other mediums we use in business every day.

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When you cannot meet face-to-face, you can use any of a variety of different ways to communicate with telephones, fax machines, FedEx, postal services and even messenger services. These are all ways to transmit or receive information, authorization and even goods and commodities. The Internet is a reasonable alternative to all these communication methods. Any place and any way your business communicates with customers should consider how to do it online. This is the power of e-commerce.

When you need to pay for goods, please use a secure server to pay by credit card or even digital cash! The opportunities and circumstances for conducting online business are limitless. (Arumugam)

Components of an Internet Business

In every business era, new strategies and new ways of doing business are bound to emerge. With the advent of radio and television, the first mass market advertisements appeared. Now, the Internet has fundamentally changed the business, so that the past 50 years (since the birth of TV) have been adhering to the company's strategic rules have begun to collapse.

Any transaction must have some commercial text content, which is the case for regular physical transactions and e-commerce. First of all, whether you are doing business online or in the real world, you must have the product to sell or the service to provide, and then you must have a place to do business. In the traditional business world, this can be a physical store, or in a more visual sense, it can be a catalog or phone number. In the world of e-commerce, where you do business is your website.

Adding a website is a means of enhancing your business. For Internet start-ups, the website is the only place where they do business. In both regular business and e-commerce, you need to find a way to attract customers to your business location. Your marketing strategy reflects this, everything from advertising to word of mouth falls into this category. In order to start a business, you also need a way to accept orders and process payments. In retail stores, there are no orders. Customers only need to find the products they want, line up at the cashier, and then pay the cashier. In e-commerce, orders must be placed and items must be shipped. Orders are usually processed through interactive online forms. Money is another issue that is easy to deal with in traditional business.

Customers in retail stores pay by check, cash, credit card or debit card. Online customers cannot pay by cash or check only electronically. In addition, the security issues surrounding online payments have not played a role in the traditional physical world. E-commerce transactions must be conducted through a secure electronic connection and a special merchant account to accept payment.

After receiving the payment, the product must be delivered. Realizing internal storage is as easy as putting goods in a bag and handing over to the customer. Realization in the e-commerce world is more difficult, requiring transportation, shipping and mail order services similar to catalogs. For companies that integrate e-commerce into their existing business plans, completing orders is as easy as hiring additional staff to send online orders. In Internet start-ups, it is often necessary to outsource fulfillment to facilities that can handle order processing and transportation in a more timely and professional manner.

Business Model

For a successful business model effectively addresses have eight key elements, which are:

Value Proposition

The typical of e-commerce value propositions are including the personalization, customization, convenience, and reduction of product search and price delivery costs. In the Website, there will be listing of the cup cakes flavors, feeling and varieties ideas of decoration believe. We also believe that you can offer a wide selection of different cup cakes as this will give the customer more choices and not just a selected items only.

Revenue Model

Major e-commerce revenue models are including:

  • a) Advertising Revenue Model - The site will provide users with some content, services and/or products, such as Wattie’s cupcakes. Customers can easily see the product. We can also provide forums or blogs for advertisements and charge advertisers. For example, Yahoo derives considerable revenue from search engines and other forms of online advertising.
  • b) Subscription Revenue Model -The site also provides subscription fees for Wattie cupcakes to facilitate consumers' access to certain products.
  • c) Transaction Fees Revenue Model - On the contrary, Wattie will charge a transaction fee like activation or execution. For example, Amazon provides online successful sales trends for selling products.
  • d) Sales Model - In the future, Wattie can also own a company, and the company can also profit by selling products, information and services.
  • e) Affiliate Model - Alliance is a kind of party that can charge introduction fee, so Wattie adopted to establish alliance with other companies. Referral fees as a percentage of all sales revenue generated.

Market Opportunity

The company must anticipate potential revenue in the market space. The company must ensure that the marketing plan remains active, and social media (such as Facebook, Twitter and Flickr) can make people aware of this. And this is the easiest way to contact customers. Even if Wattie operates without a storefront, she can still concentrate all her management efforts on personal services. Before they even call her, she must have a good conversation with them online on social media. In the future, our goal will be that 90% of its business will come from social media, which will far exceed the initial revenue target figures.

She should build relationships with clients so that they may invite her to company events, birthday parties, weddings and girl nights. Even if she mainly sells goods online, she still needs to sell to local restaurants and cooperate with other companies that provide supplier services to offices and companies.

Competitive Environment

The direct and indirect competitors doing the business in the same market space. It might be includes how many there are and how many profitable they are. In the current market trend study, they just only have few competitors in cupcake business, which goes online. Due to this, competitors cannot compete with Wattie's cupcakes business.

For example:

  • a) The service will only be a door-to-door delivery service
  • b) Product quality is different and unreasonable product pricing

Competitive Advantage

The new move to enter the corporate market is mini custom cupcakes, so it can take advantage and achieve great success. Unlike most products, these products need to be delivered in the form of 'certificate of express delivery'. Wattie can launch cupcakes of these new ideas, which can include an edible company logo. This is a great tool for marketing, because when the cake disappears from the customer's mouth, Wattie's cupcakes are the last thing the customer sees.

Market Strategy

The marketing budget may be small, but this method works very well. The product is made by skilled craftsmen, so the order flow is very stable and ideal, and there is no significant increase. It is very suitable for our business model to send promotional information to customers via email. In addition, all product packaging and delivery vehicles must be clearly marked on the website address to facilitate delivery by the staff. You can also use social media to upload all the photos and join the group there. In addition, write a blog on the website so that people can know what Wattie is doing. Wattie can use cupcakes as a canvas to show people professional themes and custom designs to attract customers' attention.

Organizational Development

The worries of hiring the team are also very smooth, because she can develop the team with her friends, thereby expanding the business with a smaller scale and lower cost. The problem that bothered her was keeping up with demand, but now she has overcome the situation of also forming her own small-scale team, and now she does not have to be so tired and can relax a lot.

Management Team

Working remotely means that Wattie can live where she wants to go and play an active role in raising young children, while her partners are looking for websites, deliverables and needs. In addition, every month,

Wattie will email us a photo of the latest cupcake design via email, which has been uploaded to the website immediately-this is a good example of how the Internet works, especially in E-commerce.

SWOT Analysis


  • Basically will changes the menu weekly – Every day of week will changes some available cupcakes and others will completely in random days of week.
  • Brand Value - The brand value, popularity and ease of use of the business have proven to be strong advantages of the company's.


  • Operating without a storefront - Wattie's weakness is to run a business without the concept of a store or cafe nearby.
  • Delivery range – The weakness of the Wattie’s is the delivery range are limited because that delivery just only for nearby the Wattie only.


  • Demand of the product – It must increasing the demand of the cupcakes when doing the wedding, birthday party and so on. These are the opportunities for the business.
  • More choice – Mostly people are likely eating outside because at outside have more choice for them. The expanding demand of more flavor and various also in the opportunity for the business.


  • Various competitor – Nowadays have a lots of the competitor are selling their product in any price and also in the market introduce the product.
  • Fast food outlets – As the number of food stores and restaurants increases, customers can switch from other sources or businesses (such as KFC, McD, Burger King, etc.) to other high-quality, affordable products.

Advantages and Disadvantages


For a business must have the major of advantages and disadvantages. The advantages for those who are starting to do a business at home are:

Low start-up cost because you don't have to rent some space for your business so you can deduct the rental from your budget list. Then, the cake supply is relatively cheap and definitely easy to obtain. In addition, as your business grows, your supplies and equipment will also increase because customer favor.

Flexibility in your schedule for you to decide when and how many order want to take. Then you have more time to accompany your children and you not need to take vacation.


Before starting a business must aware some of the things and must keep in mind to do business.

Most activities are scheduled on weekends when people are off work, so you need to make sure you have enough time to deliver cakes or pick up in times.

Depending on the size of the kitchen, you may need additional storage space to store supplies. This may require purchasing additional cabinets or rearranging your kitchen.

In this business have many advantages and disadvantages of the cupcake business. Cupcakes businesses are very fun because you can do by own and can decide the avenue you want to take.

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E-Commerce: Components, Business Model And Benefits. (2021, September 28). Edubirdie. Retrieved July 17, 2024, from https://edubirdie.com/examples/e-commerce-components-business-model-and-benefits/
“E-Commerce: Components, Business Model And Benefits.” Edubirdie, 28 Sept. 2021, edubirdie.com/examples/e-commerce-components-business-model-and-benefits/
E-Commerce: Components, Business Model And Benefits. [online]. Available at: <https://edubirdie.com/examples/e-commerce-components-business-model-and-benefits/> [Accessed 17 Jul. 2024].
E-Commerce: Components, Business Model And Benefits [Internet]. Edubirdie. 2021 Sept 28 [cited 2024 Jul 17]. Available from: https://edubirdie.com/examples/e-commerce-components-business-model-and-benefits/

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