This will be a chronicling of four types of online retailing business models. Enlightenment will be provided on these descriptions:
Ø Manufacturer-Direct
Ø Catalog Merchant
Ø Multi-Channel Merchants: Bricks and Clicks
Ø Virtual Merchant
Erudition will be listed with DNS, Page Title, Company, and a short narration of the parameters that make it an example of a particular business model.
Manufacture-Direct
Page Title:
D-Link | Welcome
Company: D-Link
This online pure play firm is a lot like many computer sales sites, though they have a tighter product focus. They are in the business of selling Network equipment. They were one of the companies that I reviewed In an earlier assignment about marketing communications tools. Their website states the following:
D-Link is an award-winning designer, developer and manufacturer of networking, broadband, digital electronics, voice, data and video communications solutions for the digital home, Small Office/Home Office (SOHO), Small to Medium Business (SMB), and Workgroup to Enterprise environments (D-Link | Welcome) .
Since they do their own design, development, and manufacture of all their products, they potentiate their earnings aptitude. For this reason it would seem that their gross margins would be somewhat higher. it would appear to allow for a professional level of design work, yet not much seems to have spent. However, their product demos are second to none. I don't really know how to comment on branding, as I had never heard of them prior to doing a Google search, where they achieved a relatively high organic search result, so perhaps my ignorance is not a worthy indicator. 2007 financial highlights reveal net sales of $1,103,238,000.00, an operating income of $82,117,000, income before tax of $115,334,000.00, cash and cash equivalents of $142,255,000.00, total assets of $854,568,000, working capital of $192,004,000.00, shareholders equity of $476,020,000.00, and shares outstanding of 547,076,000. Obviously, the ability to eliminate middle men, retailers, etc., as well as marketing the preferred product for the manufacture-direct online retailing business model, i.e., computer hardware, reduces financial asperity.
Catalog Merchant
Page Title: Metrostyle.com Women's Apparel: Suits, Tops, Pants, Skirts, Dresses
Company: Metrostyle
This is one of my wife's favorites. As was stated in the text, this firm must spend a fortune on printing costs, as she gets at least two of these catalogs in the mail every month, sometimes more. She purchases something a couple of times a year, and apparently is given a lot of consideration as a result. One of the reasons she likes to patronize this firm is because they carry a specialty line of clothes for the tall woman (she is 5'11").They have no traditional bricks-and-mortar storefronts (they mention nothing about them either in the catalog or on the Web space. They only collect taxes in Massachusetts, Indiana, New York and Texas. The following is from their Web site:
metrostyle® is an American retailer of fashion for charismatic women sizes 4-20; misses, petite and tall.
As our name suggests, metrostyle is a hub of diverse fashion for women from all walks of life. We offer everything from sassy tops and curve-hugging jeans, to versatile workweek separates, outerwear, swimwear, suits and accessories.
At metrostyle.com and through our catalogs, our goal and commitment to our customers is to translate the hottest trends in fashion into distinctive, ready-to-wear styles at ultra-low Real Steal prices (Metrostyle.com Women's Apparel: Suits, Tops, Pants, Skirts, Dresses) .
Purchases can be made directly from the Web page, or through the catalog, either with the mail-in form or a toll-free telephone number. A square banner on the "about us" page offers visitors to join their affiliate program. Guidelines for the affiliate program include instructions for accessing promotional links through Googles ConnectCommerce. There was no financial information on the Web site or in the catalog.
Multi-Channel Merchants: Bricks and Clicks
Page Title: Best Buy
Company: Best Buy
Consistently rated highly as a premier Web locus, Best Buy is widely known for their extensive line of electronics and entertainment offerings. When it comes to leveraging strengths and assets, Best Buy has succeeded brilliantly. Advertising in televised and print media, Best Buy is practically a household buzz word. Included in their copious oblations is an outlet center, where commodities such as new arrivals, recently reduced remunerations, top rated items, and discontinued products are offered at special sale reduced prices. The following was taken from their "About Best Buy" link:
It might surprise some of you that so far we haven't mentioned consumer electronics (although, we just did) because Best Buy is associated so strongly with technology. And don't get us wrong; we love the stuff. It's just that we think technology should serve people, and not the other way around. You might say that we love technology, but we're not in love with technology. Technology makes a lot of promises, and we're here to make it live it up to those promises. For people (Best Buy) .
Sparse financial notifications are claims of forty billion dollars in annual revenues, along with an affirmation of a $31,800,000.00 donation to communities served by the firm. A point-of-sale option is accessible in-store for those items not locally stocked.
Virtual Merchants
Title Page: Newegg.com - Computer Parts, PC Components, Laptop Computers, Digital Cameras, and More!
Company: NewEgg.com
This is a single channel Web firm in every sense of the word. With the only presence being online, NewEgg.com has developed a well known and highly respected brand. Their ascendancy would indicate they have faced and conquered the extraordinary challenges that ceil this particular business model. Like any auspicious operation of this oeuvre, low cost and convenience are the defining characteristics of this firm. With no physical latency (other than warehouses and offices) to absorb precious assets, appurtenances can be devoted fully to the virtual residence. Neither corporate statements nor financial information was supplied.
Works Cited
Best Buy. (n.d.). Retrieved April 13, 2009, from http://www.bestbuy.com/
D-Link | Welcome. (n.d.). Retrieved April 12, 2009, from http://www.dlink.com/
Metrostyle.com Women's Apparel: Suits, Tops, Pants, Skirts, Dresses. (n.d.). Retrieved April 13, 2009, from http://www.metrostyle.com/
(Author's note: As is evident in all these posts, this was written some time ago - many things have changed in the interim. The information is presented purely as an academic exercise)
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