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			What's B2B? What's B2C? Case Studies The Furture?

Once upon a time there was a bubble, a bubble that continued to expand at a tremendous rate until one day the bubble grew out of proportion and burst…

The analogy of a bubble in the context of dot.com boom and bust is very appropriate. Bubbles generally contain very little other than hot air, flitting about they don't actually seem to serve a useful purpose.

Many of the dot.com companies which have crashed and burned over the last 12 months did so because they tried to grow too large too soon and there was too much of an emphasis on branding and aesthetics rather than establishing a solid business model.

What now that the technology tree been shaken thoroughly? Certainly the dot.com companies that are still standing are leaner and meaner but is there the substance and vision within those companies to see them through to profitability?

Commercial websites can be broadly divided into two types, Business to Business or B2B and Business to Consumers or B2C. Generally internet firms make money online by providing a service to consumers or businesses, selling products, or by selling advertising space.

B2B
B2B is the term used to describe Business-to-Business internet based solutions for companies. Some people consider it to include everything that remotely involves electronic communications within and between businesses. A more conservative approach defines B2B ecommerce strictly in terms of electronic transactions between businesses - including their suppliers and business customers.

Oracle Corp. is a prime example of a B2B firm, they provide online solutions for ecommerce companies such as database software and server suites.

Their success is greatly influenced by the activity of their client B2C companies. During the height of the dot.com boom Oracle and other B2B service providers were doing very well, but since many B2C sites went out of business Oracle's growth has decreased proportionately.

B2B services include information sources such as FT.com, Nua.com, and Silcon.com to name but a few. All provide up to date market sector information. However products of this type are suffering from cash shortages and may have to start charging subscribers for content in the future.

Online recruitment continues to be a very successful section of B2B. It is ideally suited to the internet which has the innate ability to bring people together - in this case recruiters and candidates.

B2C
Businesses to consumer websites have not taken off yet as it had been hoped. The fact is that people are reluctant to pay for products and services over the net with their credit card as they think there could be security risks.

Having said that, more and more people are now buying products online. The convenience of online shopping is undisputed, and B2C companies now realize that they have to offer as good as, or a better service than their offline counterparts. That means getting their customers order delivered to them within a day, or within the week at the most.

Online shops do not have the premise overheads of high street operatives and so can charge lower prices. As a result the slump in the economies in the US has prompted a growth in usage of discount B2C websites. In spite of the downturn in the economy in the US online spending grew by 36 per cent in the year to March 2001, this is because people are looking for the most cost-effective buy.

Profile Case Studies

The most famous dot.com failure was Boo.com, it was one of the first high profile sites to be declared bankrupt. It was the way that this company was spending money like it had gone out of fashion one - minute, and then the next, it had to come down to earth with a bump -Naturally the press had a field day.

Boo.com failed in all respects-most noticeably in its almost unusable, avatar-based system with Flash graphics that demanded high-speed access. With an uncontrolled cost base, the result was inevitable.

This year Boo reopened its doors for trading, but instead of selling directly it now acts as a commission based fashion portal, providing links to other sites that sell specific garments.

Letsbuyit.com had the innovative idea of selling products online cheaper for multiple orders. Customers were encouraged to join together to order items in bulk, unfortunately the concept didn't catch on immediately and huge marketing losses (€33 million in the fourth quarter on a Christmas marketing bonanza alone) left the company with cap in hand seeking new investment. Luckily this investment did come forward and the company is now rebuilding its business model and reputation.

Companies such as Boo and QXL, have lost large sums because they established physical premises in a number of countries and have had seen those markets fail to instantly take off. One of the common mistakes of online businesses is too try to expand too quickly outside of their core market. For example Letsbuyit.com operates in 14 countries, but it generates more than 80% of its sales in Germany, the UK and the Nordic countries.

Online auction site eBay is doing very well. With over 18.9 million registered users it is the number one most popular shopping site on the Internet when measured by total user minutes according to the Media Metrix September 2000 web report. A US survey recently revealed that eBay has knocked Amazon.com off the top spot for retail sites.

Amazon does however have tremendous brand awareness due to a huge banner presence on the internet and a great deal of media coverage. It is probably the most recognized B2C site. The site sells products that customers will quite happily buying online - books, music, DVDs, videos, software and games. What you see is what you get with these products, unlike clothes which people like to try on etc.

One of the best things about Amazon is that you can send gifts to someone anywhere in the world. The site also watches what you look at and buy, then recommends items it thinks you might like and sends users e-mails asking them to reserve copies of a new book or CD.

This kind of intelligent shopping is why the internet is such a great medium, unfortunately all too many internet sites treat their online business in the same way as they would an offline business. Managers have to realise that there different rules, strategies and means to achieve online commercial success, a large marketing budget and a flash city office is not enough.

The Future?

The global and UK internet population is constantly expanding, connection speeds are increasing and site design has become increasingly geared towards usability. These factors mean that online commerce will become faster and easier - as a result more popular.

The medium of the PC is still alien to many retail consumers who associated as it with office work, word-processing, games, and nerds. Possibly it is not until the internet and specifically ecommerce sites are satisfactorily introduced to digital television and the next generation of mobile handsets that they will succeed.