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ORF 401 - Electronic Commerce Spring 2004

Most Popular Search: Usher – 30,000,000 Searches/Month CDs, Books,

Concert Tickets,More…

1/1000 of theseusers = 30,000.

http://www.orfe.princeton.edu/index.html

http://www.amazon.com/exec/obidos/subst/home/redirect.html/ref=nh_gateway/104-4985600-4631108


Low MaintenanceEcommerce

Synergizing technology with marketing to reduce workload and increase sales.

Low maintenance: Technology: CGI Script, XML, RSS. Marketing: SEO, Syndicated Newsletter.

Provide a service: Make search easier, make finding products and discounts easier.

“A business that makes nothing but money is a poor business.”-Henry Ford




Definitions Affiliate Program – Mutually beneficial relationship

between a website and a company. We use Amazon.com

Creatives – Promotional tools used to market affiliate programs. These include banner ads, and coupon codes.

Search Engine Optimization – making content highly relevant for both search engines and searches. Goal: gain top position for specific “keywords.”

Link and Code Driven Coupons: Offers specialty discounts by using a link or a code. Generally not organized online or by Amazon.com.




E-commerce – E-commerce – Then & NowThen & Now

THEN: March 10, 2000 – The dot-com bubble burst– 862 dot-com companies fail in the following

month– 368 e-commerce websites (43%) fail

NOW: Online sales for 2003 were $12.2 billion, up 42% from the previous year

71% of e-commerce sites were profitable in 2003




Amazon’s MarketAmazon’s Market One of the few companies to survive

dot-com bubble burst Amazon.com’s President Jeffrey

Bezos states: “The customer experience we create is by far the most important driver of our business.”




Amazon’s Market cont…Amazon’s Market cont…

Growth in Net Sales (in thousands)

Year Ended North America International Total 2003 $3,258,413 $2,005,286 $5,263,6992002 $2,761,457 $1,171,479 $3,932,9362001 $2,460,336 $662,097 $3,122,4332000 $2,380,908 $381,075 $2,761,9831999 $1,472,096 $167,743 $1,639,8391998 $588,013 $21,806 $609,819




Amazon’s Market cont…Amazon’s Market cont…Percentage of N.A. vs Int. Sales

0%

20%

40%

60%

80%

100%

2003 2002 2001 2000 1999 1998

Year Ended

Per

cent

age

North America International




Amazon’s Market cont…Amazon’s Market cont…

Total Net Sales per Year

$0$1,000,000$2,000,000$3,000,000$4,000,000$5,000,000$6,000,000

2003 2002 2001 2000 1999 1998

Year Ended

Net

Sal

es(i

n t

ho

usa

nd

s)

North America International




Discount Coupon MarketDiscount Coupon Market “In 2001, marketers distributed 333 billion coupons

and by redeeming them consumers saved over $3 billion.”

- Assoc. of Coupon Professionals

Burst! Media conducted a “study of nearly 8,000 web users [and] found that about one-in-five (19.0%) respondents have redeemed an Internet coupon.”




Discount Coupon Market Discount Coupon Market cont…cont…




Prospective Financials: Prospective Financials: SalesSales

Expected Expected Expected YearlyYear Ave. Purchase Commission Comm. per Day Commission

1 $30 $2.25 $337.50 $123,187.502 $30 $2.25 $585.00 $213,525.00

Expected Expected # Expected Expected #Year Commission Rate Click-Throughs % Purchase Purchases

1 7.50% 15000 1 1502 7.50% 20000 1.3 260




Prospective Financials: Cost Prospective Financials: Cost of Salesof Sales

Domain Name & Hosting Fees $52.00 per year

Marketing $0.00

Factory $0.00

Equipment $0.00

Maintenance $0.00

Total Yearly Cost $52.00




Prospective Financials: Prospective Financials: Balance SheetBalance Sheet

Dec. 31,2004 Dec. 31,2005Balance Sheet Items Year 1 Year 2

Current AssetsCash $1,000 $1,000Accounts Receivable $30,797 $53,381

Total Current Assets $31,797 $54,381Noncurrent Assets

Property, Plant, and Equip (net) $0 $0

Total Noncurrent Assets $0 $0Total Assets $31,797 $54,381

Current LiabilitiesAccounts Payable $52 $52

Total Current Liabilities $52 $52Noncurrent Liabilities

Long term Debt $0 $0

Total Noncurrent Liabilites $0 $0Total Liabilities $52 $52

Shareholder's EquityCommon Stock $0 $0Retained Earnings $31,745 $54,329

Total Shareholder's Equity $31,745 $54,329Total Liabilities and S.E. $31,797 $54,381




Prospective Financials: Prospective Financials: Income StatementIncome Statement

Dec. 31,2004 Dec. 31,2005Income Statement Items Year 1 Year 2

Revenues:

Sales Revenue $123,188 $213,525

Total Revenues $123,188 $213,525

Expenses:Domain & Hosting Expense $52 $52Income Tax Expense $0 $0

Other Operating Expenses $0 $0Salaries and Benefits Expenses $0 $0

Total Expenses $52 $52

Net Income $123,136 $213,473




Prospective Financials: Cash Prospective Financials: Cash Flow StatementFlow Statement

Dec. 31,2004 Dec. 31,2005Cash Flows Year 1 Year 2

Net Income $123,136 $213,473

Change Other Current Assets and Liabilities ($30,745) ($53,329)Cash Distributed ($91,391) ($159,144)

Cash $1,000 $1,000




SEO – Google Google’s goal to create a perfect

search engine. Not merely text analysis but HTML

analysis. How HTML analysis relates to

PageRank™.




Google – PageRank™ Why PageRank™ is important to our site. Gliding scale PageRank™ 1 – 10. How to improve PageRank™

– Do not use Spam techniques. – Do not use framed sites.– Do not "capture" outgoing links within a frame of your own site.– Do not link to other sites using a Java Script code.– The site should have its own domain name. – The site should not be hosted on a free server.– The site should have a professional, quality image.– Keep your site clean, neat and organized.– The site should not have excessive pop-ups.– The site should contain GOOD information and / or products.




SEO – GoogleAward Strategy

How We Will Increase PageRank™– Clutter Free Content– Meta Tags– Linking to other pages– Award Link Strategy

Usher, top listed sites. E-mail sites saying they have an award. We create

graphic, they display on their site with a link to an awards page and links to our products.




SEO - Google Concluding Remarks: How Search Engine Optimization and

Understanding Google can help our business not merely survive but thrive.

Low maintenance, & low cost. Effective




Amazon.com XML FEED Amazon Provides an XML Feed to

affiliates. Product information, shopping cart

script, product reviews, product information, price and sales rank.

We can use these free of charge.




Amazon.com XML FeedThe PROBLEM

Our Goal is to utilize Search Engine Marketing.

But, the scripts used to parse XML leave an ‘unfriendly URL.’

http://www.website.com/?prod=12 Dynamic content cannot be crawled by

Google.




Amazon.com XML FeedOur Solution

Mod Rewrite– Rewrites the CGI output in an HTML

format. – Search Engines don’t know it is a

dynamically created page.– We get crawled, all 500,000 pages.– With a lot of pages indexed, we will get

traffic galore.




Amazon.com XML FEEDLIVE DEMO

http://www.goalsearch.com– Amazon Daily Deals

Select any product.– It is indexed on our site.– ‘Search.’ for the product

– Regular links, browse directory. The directly links to roughly 500,000 products.




Interface When users search, they will most

likely find an internal page, not our front page.

We have ten seconds to impress our user and convince them to stay for their first visit, and come back for more.




Interface Two main issues:

– Credibility, Ease of Navigation Credibility

– Prominent display of Amazon.com logo– Professionally made graphics– Up to date coupons and newsletter

Users know the site is constantly monitored Ease of Navigation

– Each page must be accessed by at least two clicks.

Map, Link to Home Page, Simple Interface




InterfaceAttracting Repeat Visitors

Contextual Analysis– Script that searches for keywords– Consults a database– Displays a ‘guess’ of relevant coupons– Also general coupons (e.g. free shipping

on orders over $25, or $5 discount on mothers day).




Interface Attracting Repeat Visitors

Newsletter, constant reminder of deals and where to go.– Syndicated Content– Online Shopping Tips

Bookmark link script on each page




Conclusion Bargain shopper market is ripe and

ready for harvest. Low-maintenance and low cost: SEO,

Syndicated Content. Effective: Provide a service. Help

users find bargains. Untapped niche for service, ripe

market, and a unique idea = success!



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