Asignment No. 5

Tuesday, October 26, 2010

Last meeting our group introduces our project proposal which is the “credit linker”. Since the proposal that we made was my idea then, that would be my business idea that I am going to introduce in this topic.

Credit linker is a kind of business wherein it deals on shopping online with a twist. This business targets those people that don’t have any credit card or someone who wants to buy something on the internet for just one time. This business serves as a middle man between the shopper and the online store. It doesn’t need huge amount to create this kind of business. How does this business works? The owner of the business does have a credit card (or any electronic card) wherein it is used to transact online for shopping. When someone had seen a product on the internet and they don’t have any source to buy the products online, then the costumer can go now on our office to buy the product. So, the owner will ask the costumer what does he wants to buy on the online shop. A computer with an internet connection is needed in order to see what the costumer wants to purchase online. When the costumer already done and find his product that he/ she want to purchased, he can now go to the business office in order to purchased the product online. In order to gain, the business will have an interest from the original product being purchased together with its shipping fee. The costumer must have a down payment first before his/ her product purchased will be confirmed. The customer will return again to the business office when his/ her order arrived already. The business also offers an online selling of product. How the online selling products do works? Well, when someone wants to sell something on the internet but don’t have any idea on how he will sell it, then the business will offer to post his/ her product online. The customer will bring the product to the business center and will make a fix price for his product. The business now will do the rest and the seller will just wait for a about fifteen days. While the product is still on auction, at the same time the product is also displayed on the office. Whenever there is a walk- in costumer he or she can buy the product that has been product directly to the office. The advantage of this is that it doesn’t need a shipping fee which can lessen the product cost compared to purchase it online. How does the business earn money on this? When the seller will give the business a fix cost of his product, the business will raise the value of the product in a reasonable price. For example:

Seller’s product cost:
Clothes- 500php
Cellphone-2500php
Business product cost:
Clothes- 650php
Cellphone-2700php
As we can see the differences between the seller cost and the business product cost is 150php then this shows that the business is earning .

Payment
Since it is online shopping, it does need an online payment from the name the best thing to be used is the credit card; however the are also alternative way to pay the transaction. This includes:
• Debit card
• Various types of electronic money
• Cash on delivery (C.O.D., offered by very few online stores)
• Cheque
• Wire transfer/delivery on payment
• Postal money order
• Reverse SMS billing to mobile phones
• Gift cards
• Direct debit in some countries
There are some instances that some sites will not allow international credit cards and billing address and shipping addresses have to be in the same country in which site does its business. Some of the sites allow customers from anywhere to send gifts anywhere. The financial part of a transaction might be processed in real time (for example, letting the consumer know their credit card was declined before they log off), or might be done later as part of the fulfilment process.

Delivery of the product
Once a payment has been accepted the goods or services can be delivered in the following ways.
• Download: This is the method often used for digital media products such as software, music, movies, or images.
• Shipping: The product is shipped to the business address and will contact the costumer if his/ her product already arrived.
• Drop shipping: The order is passed to the manufacturer or third-party distributor, who ships the item directly to the consumer, bypassing the retailer's physical location to save time, money, and space.
• In-store pickup: The business also offer in-store pick up. The customer orders online, finds a local store using locator software and picks the product up at the closest store.
In the case of buying an admission ticket one may get a code, or a ticket that can be printed out. At the premises it is made sure that the same right of admission is not used twice.

The Advantages of the Credit Linker Business

Convenience
Online stores are always available 24 hours a day, it is very easy for the costumer to search product he/ she want. The costumer can shop in his house if he/ she do have an internet connection. If the costumer doesn’t have any internet connection in his/her house, there are establishments such as internet cafes and schools that provides internet connection. A visit to a conventional retail store requires travel and must take place during business hours.

In the event of a problem with the item – it is not what the consumer ordered, or it is not what they expected – consumers are concerned with the ease with which they can return an item for the correct one or for a refund. Consumers may need to contact the retailer, visit the post office and pay return shipping, and then wait for a replacement or refund. Some online companies have more generous return policies to compensate for the traditional advantage of physical stores. For example, the online shoe retailer Zappos.com includes labels for free return shipping, and does not charge a restocking fee, even for returns which are not the result of merchant error.

Information and reviews
Most of online stores must describe their products for sale together with text, photos, and some includes multimedia files, unlike in a physical retail store, the actual product and the manufacturer's packaging will be available for direct inspection (which might involve a test drive, fitting, or other experimentation).
Some online stores provide or link to supplemental product information, such as instructions, safety procedures, demonstrations, or manufacturer specifications. Some provide background information, advice, or how-to guides designed to help consumers decide which product to buy.
Some stores even allow customers to comment or rate their items. There are also dedicated review sites that host user reviews for different products.
In a conventional retail store, clerks are generally available to answer questions. Some online stores have real-time chat features, but most rely on e-mail or phone calls to handle customer questions.
Price and selection
This would be the one advantage of shopping online where the customer will be able to quickly find out deals for items or services with many different vendors. Search engines, online price comparison services and discovery shopping engines can be used to look up sellers of a particular product or service.

Shipping costs (if applicable) reduce the price advantage of online merchandise, though depending on the jurisdiction, a lack of sales tax may compensate for this.
Shipping a small number of items, especially from another country, is much more expensive than making the larger shipments bricks-and-mortar retailers order. Some retailers (especially those selling small, high-value items like electronics) offer free shipping on sufficiently large orders.

Disadvantages of Credit Linker Business
Fraud and security concerns
This is very common problem especially when you are having transaction online. This has given the customer a lack of ability to inspect merchandise before purchasing the product. Consumers are at higher risk of fraud on the part of the merchant than in a physical store. Merchants also risk fraudulent purchases using stolen credit cards or fraudulent repudiation of the online purchase. With a warehouse instead of a retail storefront, merchants face less risk from physical theft. Secure Sockets Layer (SSL) encryption has generally solved the problem of credit card numbers being intercepted in transit between the consumer and the merchant. Identity theft is still a concern for consumers when hackers break into a merchant's web site and steal names, addresses and credit card numbers. A number of high-profile break-ins in the 2000s has prompted some U.S. states to require disclosure to consumers when this happens. Computer security has thus become a major concern for merchants and e-commerce service providers, who deploy countermeasures such as firewalls and anti-virus software to protect their networks.
Phishing is another danger, where consumers are fooled into thinking they are dealing with a reputable retailer, when they have actually been manipulated into feeding private information to a system operated by a malicious party. Denial of service attacks are a minor risk for merchants, as are server and network outages.
Quality seals can be placed on the Shop web page if it has undergone an independent assessment and meets all requirements of the company issuing the seal. The purpose of these seals is to increase the confidence of the online shoppers; the existence of many different seals, or seals unfamiliar to consumers, may foil this effort to a certain extent. A number of resources offer advice on how consumers can protect themselves when using online retailer services.
These include:
• Sticking with known stores, or attempting to find independent consumer reviews of their experiences; also ensuring that there is comprehensive contact information on the website before using the service, and noting if the retailer has enrolled in industry oversight programs such as trust mark or trust seal.
• Before buying from a new company, evaluate the website by considering issues such as: the professionalism and user-friendliness of the site; whether or not the company lists a telephone number and/or street address along with e-contact information; whether a fair and reasonable refund and return policy is clearly stated; and whether there are hidden price inflators, such as excessive shipping and handling charges.
• Ensuring that the retailer has an acceptable privacy policy posted. For example note if the retailer does not explicitly state that it will not share private information with others without consent.
• Using strong passwords, without personal information. Another option is a "pass phrase," which might be something along the lines: "I shop 4 good a buy!!" These are difficult to hack, and provides a variety of upper, lower, and special characters and could be site specific and easy to remember.
Although the benefits of online shopping are considerable, when the process goes poorly it can create a thorny situation. A few problems that shoppers potentially face include identity theft, faulty products, and the accumulation of spy ware. Whenever you purchase a product, you are going to be required to put in your credit card information and billing/shipping address. If the website is not secure a customers information can be accessible to anyone who knows how to obtain it. Most large online corporations are inventing new ways to make fraud more difficult, however, the criminals are constantly responding to these developments with new ways to manipulate the system. Even though these efforts are making it easier to protect yourself online, it is a constant fight to maintain the lead. It is advisable to be aware of the most current technology and scams out there to fully protect yourself and your finances.
One of the hardest areas to deal with in online shopping is the delivery of the products. Most companies offer shipping insurance in case the product is lost or damaged; however, if the buyer opts not to purchase insurance on their products, they are generally out of luck. Some shipping companies will offer refunds or compensation for the damage, but it is up to their discretion if this will happen. It is important to realize that once the product leaves the hands of the seller, they have no responsibility (provided the product is what the buyer ordered and is in the specified condition)

Lack of full cost disclosure
The lack of full disclosure with regards to the total cost of purchase is one of the concerns of online shopping. While it may be easy to compare the base price of an item online, it may not be easy to see the total cost up front as additional fees such as shipping are often not be visible until the final step in the checkout process. The problem is especially evident with cross-border purchases, where the cost indicated at the final checkout screen may not include additional fees that must be paid upon delivery such as duties and brokerage. Some services such as the Canadian based Wishabi attempts to include estimates of these additional costs, but nevertheless, the lack of general full cost disclosure remains a concern.

Privacy
Privacy of personal information is a significant issue for some consumers. Different legal jurisdictions have different laws concerning consumer privacy, and different levels of enforcement. Many consumers wish to avoid spam and telemarketing which could result from supplying contact information to an online merchant. In response, many merchants promise not to use consumer information for these purposes, or provide a mechanism to opt-out of such contacts.
Many websites keep track of consumers shopping habits in order to suggest items and other websites to view. Brick-and-mortar stores also collect consumer information. Some ask for address and phone number at checkout, though consumers may refuse to provide it. Many larger stores use the address information encoded on consumers' credit cards (often without their knowledge) to add them to a catalog mailing list. This information is obviously not accessible to the merchant when paying in cash.


Product suitability
Many successful purely virtual companies deal with digital products, (including information storage, retrieval, and modification), music, movies, office supplies, education, communication, software, photography, and financial transactions. Other successful marketers use Drop shipping or affiliate marketing techniques to facilitate transactions of tangible goods without maintaining real inventory.
Some non-digital products have been more successful than others for online stores. Profitable items often have a high value-to-weight ratio, they may involve embarrassing purchases, they may typically go to people in remote locations, and they may have shut-ins as their typical purchasers.[citation needed] Items which can fit through a standard letterbox — such as music CDs, DVDs and books — are particularly suitable for a virtual marketer.
Products such as spare parts, both for consumer items like washing machines and for industrial equipment like centrifugal pumps, also seem good candidates for selling online. Retailers often need to order spare parts specially, since they typically do not stock them at consumer outlets—in such cases, e-commerce solutions in spares do not compete with retail stores, only with other ordering systems. A factor for success in this niche can consist of providing customers with exact, reliable information about which part number their particular version of a product needs, for example by providing parts lists keyed by serial number.[citation needed]
Products less suitable for e-commerce include products that have a low value-to-weight ratio, products that have a smell, taste, or touch component, products that need trial fittings — most notably clothing — and products where colour integrity appears important. Nonetheless, Tesco.com has had success delivering groceries in the UK, albeit that many of its goods are of a generic quality, and clothing sold through the internet is big business in the U.S. Also, the recycling program Cheapcycle sells goods over the internet, but avoids the low value-to-weight ratio problem by creating different groups for various regions, so that shipping costs remain low.

Consumer expectations
The main idea of online shopping is not in having a good looking website that could be listed in a lot of search engines and it is not about the art behind the site. It also is not only just about disseminating information, because it is all about building relationships and making money. Mostly, organizations try to adopt techniques of online shopping without understanding these techniques and/or without a sound business model. Rather than supporting the organization's culture and brand name, the website should satisfy consumer's expectations. A majority of consumers choose online shopping for faster and more efficient shopping experience. Many researchers notify that the uniqueness of the web has dissolved and the need for the design, which will be user centred, is very important. Companies should always remember that there are certain things, such as understanding the customer's wants and needs, living up to promises, never go out of style, because they give reason to come back. And the reason will stay if consumers always get what they expect. McDonaldization theory can be used in terms of online shopping, because online shopping is becoming more and more popular and website that wants to gain more shoppers will use four major principles of McDonaldization: efficiency, calculability, predictability and control.
Organizations, which want people to shop more online for them, should consume extensive amounts of time and money to define, design, develop, test, implement, and maintain website. Also if company wants their website to be popular among online shoppers it should leave the user with a positive impression about the organization, so consumers can get an impression that the company cares about them. The organization that wants to be acceptable in online shopping needs to remember, that it is easier to lose a customer then to gain one. Lots of researchers state that even when site was a "top-rated", it would go nowhere if the organization failed to live up to common etiquette, such as returning e-mails in a timely fashion, notifying customers of problems, being honest, and being good stewards of the customers' data. Organizations that want to keep their customers or gain new ones try to get rid of all mistakes and be more appealing to be more desirable for online shoppers. And this is why many designers of webshops considered research outcomes concerning consumer expectations. Research conducted by Elliot and Fowell (2000) revealed satisfactory and unsatisfactory customer experiences.

Aggregation
High-volume websites, such as Yahoo!, Amazon.com and eBay, offer hosting services for online stores to small retailers. These stores are presented within an integrated navigation framework. Collections of online stores are sometimes known as virtual shopping malls or online marketplaces.
Become.com is a product price comparison service and discovery shopping search engine with a mission to help shoppers make ideal buying decisions. Dulance was a price engine that specialized in searching for hard-to-find products often sold by small independent online retailers ("The Long Tail"). Mysupermarket aggregates inventory from the UK's four leading online groceries for shoppers to compare supermarket prices.
Many companies that don't have internal resources or expertise (such as do-it-yourself-ers) work with a web development firm to handle all or some of the facets of the online shopping set-up, including integration of the e-commerce platform and hosting. Full service digital companies can design, develop and set-up ecommerce sites so that they're up and running with existing merchant accounts or new ones."