Marketplace model in E commerce

So I am here yet again to talk about the e commerce, ever wondered how the e commerce model works ? Well initially the the e commerce companies use to store inventory with them and sell them to the customers . This had two advantages : One the e commerce companies were able to strike a better deal because of bulk purchasing ,Second customer satisfaction and fulfillment rate was also controlled since the e commerce companies had control over the inventory. But with the regulations in place and e commerce companies looking for more funds to grow they switched to the marketplace model.

In the marketplace model the e commerce companies provide platform where the buyers and the sellers meet. The e commerce companies do not hold any inventory. When the customer places an order the information is sent to the seller, now the seller has three options , First he ships the product by himself, second he just packs the product the person from e commerce companies come  and pick up the product,Third he stocks the product in the warehouse of the ecommerce companies , so that order is fulfilled by them. When the e commerce receives the the money from the customer they transfer the money to the bank account of seller and this is how the entire cycle takes place.

Network Effect

Ever wondered how facebook,zomato and most of the other internet businesses earn money. Probable answer will be advertising but why do the advertisers come to advertise on these sites?

Well it all starts with the platform ,yes a platform is build on which content aggregation takes place and lot of the users will come to interact on that because it acts as a lateral platform and provides an opportunity to share ,enjoy and learn from each other. When so many users aggregate at one place ,it is enticing for the advertisers too flock on the same platform and they advertise on the platform and the platform monetizes it. Initially few advertisers come to advertise but slowly advertisers increase looking at the existing traffic . This entire effect is called Network effect and serves as the business model for most of the internet business.

Hybrid E Commerce

We Indians want a service or assistance in most of the things we do. So for example rather than walking to a store to buy a milk we have doodhwallah,rather than going and depositing a newspaper we have a raddiwallah.. Even at airports ,though we have a self serviced kiosk but we prefer assistance from the person at counter.. So rather than being self serviced we always prefer being serviced by others.

So now the latest fad in retail market is online retail wherein a person logs on to the site and under a product category choses the product he wants to purchase, thought the e commerce sites are brilliant and should not require service but here too there exists a business model which can have offline service.

Think of an average household woman who is not tech savvy but wants to purchase online, So what does she do? She goes to a retail store nearby ,at the retail store(kirana store) the person with the tablet connects her online and assists her to make choices and showcase catalogues of different products. She makes a choice,kirana walaah places an order she pays offline to the retailer,retailer pays online to the ecommerce firm after adjusting his margin and the product is delivered at the doorstep of the buyer.

This model is referred to as the Hybrid E commerce and is set to evolve in India. Some companies are already operating this model. So next time you hear about e-dukan wallah dont be surprised ,its the idea whose time has come.

Technology behind IOT

The technology used in making Internet of Things is Electronic Product Code (EPC), Radio Frequency Identification (RFID) and EPCglobal Networks.

EPC is a unique number on every item, which becomes the identity of the item. It is like a barcode on every item, only difference being that it is associated with dynamic data of the item. Unlike the barcode, which has only the product category, it holds the identity of the item through the unique features of the item, like date of production or independent serial number. This makes the item equipped enough to be tracked throughout its journey, from the manufacturer to the buyer. RFID is a wireless technology, used to store and process information, modulate radio frequency signal and transmit and receive signals. The EPC, along with the RFID chip is stored on an RFID tag. The RFID chip transmits the information of EPC through EPCglobal Network. The EPCglobal Network comprises of the devices and services used for automatic identification and immediate transfer of information on the items (EPC). These devices include the EPC Readers and EPC tags, EPC Middleware and EPC Services, for smooth and undisruptive transmission of information.

What makes a great product?

So have you ever thought why do you buy a certain product ,whereas the other one gets unnoticed or in other words what makes a great product. Great product has three features intricately linked to it

1)Transaction Cost

2)Attributes

3) Benefit

Under Transaction cost one should aim to reduce search cost,for e.g. reviews on Amazon helps to zero down on a product and thus reduces search cost. Second a product should adapt to the changing needs and interact differently every time a user interacts with it.

Under Attributes customer looks for a product which is customizable(for eg. online fashion stores) according to the needs of the customer, has new functionality and has a better connectivity with the current ecosystem(eg. apple products). These attributes and transaction cost accrue benefits for the product

Internet of Things: SCM perspective

Supply Chain Management encompasses a series of activities which involves procuring raw materials from suppliers, transporting them to manufacturing units, transforming the raw materials into finished goods and distributing it to the customer. Since the entire process comprises of complex network of suppliers, factory, distribution cells and customers, the system has to be efficient, effective and robust. This was the traditional SCM Model. It had some limitations, such as, in most of the cases it had fixed designs that could not be changed according to the real time environment. Also the model used to be cost oriented and not revenue oriented. To save upon the recurring cost, a generalized Supply Chain System was implemented.

For this process to work in the desired manner flow of material and information becomes pivotal. But the flow of information is often outpaced by the flow of materials in the SCM. Information technology is used passively to study the processes but no real time information is available which could help analyse them and the inefficiencies associated with it deeply. This is where Internet of Things can be extremely useful. It is how materials can interact using internet/web. In SCM this can be used to obtain real time information regarding the materials, right after procurement to the distribution of materials. This technology not only helps to track the process but also through real time analysis helps to remove inefficiencies in the system real time eventually assisting us in taking and implementing decisions

How Google Adwords Work ?

Right so finally I have been shaken out of my slumber and here I am blogging after a hiatus of some 3 years.

Well as the title suggests we are going to discuss about how google adwords work. Google Adwords is an advertising platform used by the marketeers to increase the reach of their products. So everytime you put in a search query,ads related to your search query can be seen.On clicking these ads you are taken to the landing page related to the product you are looking for Google does two type of searches, one is organic search ,which are the results that you see and others are ads related to keywords which can be seen on the sides.

How does google decide on the rank of ads?

So to understand this ,first understand what is CPC(Cost per click),it is the maximum cost that you set in your adwords account that you are willing to pay everytime user clicks on your ad . There is another component called Quality score which depends on the quality of the landing page ,keywords and extensions used. Using these two components Ad rank is calculated as follows

AD Rank=CPC*Quality Score

Higher the Ad Rank,higher the ad will be placed on the page.

Hope this article helps .