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Author Vadim
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Internet Business

A wide range of services and products, payment and delivery methods make the Internet a business favourite.

 

Internet business (online business) does not imply radically new ways to sell, purchase and pay for goods, but only adds new convenient ways and services to the known and familiar ways. This is very important for the consumer, and therefore very attractive for a businessman. However, the acquisition, delivery, payment - this is not all you need for a successful business.

Judge for yourself: 

  • a range of services: information, training, search, banking, communication, remote analysis, text translation, advertising and much more; 
  • a range of products: digital goods, literature in electronic form and all products that can be purchased in stores and they will also be delivered to you; 
  • methods of delivery: by mail, courier, instantly (for digital goods), and it is possible to independently approach the goods to the nearest office of the company-seller.
  • payment methods: via payment systems, credit cards, SMS, Bank cards, cash (upon receipt of goods cash on delivery) 
  • development of structures in the field of direct sales using online registration of partners and business development in accordance with different methods.

Along with the increase in services, the complexity of such business increases. One word "complexity" includes, in this case, so many different subtleties and nuances that their consideration and analysis is impossible within one article, each specific type has its own specific features and necessarily "exceptions to the rule". Sometimes exceptions to the rules develop into so-called "black methods", and sometimes vice versa.

We will try to consider each type of business in turn and determine the main directions for the development and support of network business.

E-COMMERCE

Online stores are the embodiment of e-Commerce in its classical sense (purchase and sale of goods and services on the Internet). 

The online store is a company that carries out trading on the Internet using the Website. The website of the online store contains product catalogues with their descriptions, photos and prices. A special online order form allows customers to select, order and pay for the goods they are interested in, and calculate the cost of the entire order in advance, taking into account delivery. As a rule, the client has the ability to track on the store's website what stage is the execution of his order. 

Often online stores are placed in special sections or in descriptions of specific products customer reviews and other useful information for customers. The range of products online store can range from units to thousands of items. 

Before ordering an item from an online store, the user usually needs to register. Then, after becoming more familiar with the assortment and prices and putting items that are the most interesting for him in a virtual shopping cart, the buyer chooses the delivery method and payment. After specifying all these parameters, the buyer receives the total cost of the order and, if it suits him, confirms the order. 

After receiving the order, the store administration will contact the buyer by e-mail or phone to confirm the order and specify the terms of delivery (if necessary). Depending on the chosen conditions, the customer pays for the order upon receipt or makes an advance payment by one of the traditional ways or by means of specialized Internet payment systems. The differences between the "virtual" store and its real analogue cause both its advantages and disadvantages.

To visit the online store, the buyer does not need to go anywhere, but he must wait for the execution of the order (sometimes more time than he would have spent to walk to the nearest ordinary store) and track the execution of his order. This feature makes online stores strive to ensure the delivery of goods in the shortest possible time.

Internet users do not need to spend almost any effort to visit the online store. This is certainly an advantage. But do not forget that just as little effort is required from the store visitor to leave and go to a competitor. Therefore, the online store should have a clear at first glance interface and a simple but convenient navigation system. 

In addition, the customer should always have insight links to useful information for him regarding the product of interest or at least easy to find this information. The fewer movements a visitor needs to make to buy the goods, the better.

The online store can provide a potential buyer with a huge range of products, give a detailed description of each of them with photos and even videos, but he will never be able to give the client the opportunity to hold the goods in his hands, to examine in detail from all sides. In many cases, this is crucial. 

According to numerous surveys, a significant number of visitors to online stores go to their sites, not for shopping, but only to choose a product. The final decision about the purchase they make in a regular store, seeing the goods with their own eyes. 

In order to at least partially compensate for this phenomenon, which is undoubtedly negative for e-Commerce, some online stores provide customers with the opportunity to ask questions to consultants by e-mail or chat, post a question in the conference site or clarify details over the phone. It is very important to get answers quickly.

The simplicity of the order procedure and the lack of queues in online stores contribute to e-Commerce, but the need to deliver the goods to the buyer, especially in cases where the cost of the order is small, has the opposite, deterrent effect.

Typically, an online store consists of the following elements:

  • The website (includes the main page, product catalogue, price list and search system, the system of registration and authorization users, the system of formation and confirmation of the order, in other words, named shopping bag or shopping cart, the system of customer support and lists of partner companies);
  • order processing system;
  • payment system;
  • product delivery service;
  • the system of work with suppliers;
  • back offices;
  • marketing service.

The success of Internet marketing depends on the success of advertising companies. Advertising campaign should be carried out so that Your store is visited repeatedly and receives regular customers. Internet marketing has a very rapid development all over the world. 

Indeed, who does not like to go shopping sitting in a chair, buy purchases by pressing a key while paying for delivery no more than the cost of fuel for a personal car or tickets for public transport? 

The next stage of Internet marketing is the creation of an Internet exchange or auction. It is a more global and profitable form of e-Commerce.

Trading platform

The idea of a trading platform on the Internet looks very attractive. Its essence is as follows: 
a website is created, the interface of which allows sellers to sell their products, and buyers to choose the best offers and make purchases. By means of advertising and personal contacts,  the initial audience of sellers and buyers is formed, and then begins the process of transactions. 

Due to the absence of geographical barriers, companies around the world can participate in trade on such a platform. Sellers and buyers can be both juridical person and natural person. 

The online trading platform can be organized in three main ways: exchange, auction or catalogue

The business model of the trading platform involves the receipt of income in the following areas:

  • commission on each transaction;
  • advertising in the interface of the trading platform;
  • the subscription fee for the ability to put goods and services for sale;
  • paid access to the databases of the trading platform;

The exchange (organized market) is a trading platform where the price of goods is determined by supply and demand. Buyers bid to buy goods, and sellers bid to sell. Trading on the exchange is anonymous. 

The income of the Internet exchange is almost entirely composed of the commissions for the transactions. In some cases, a significant share of revenue may be generated from advertising and ancillary services. The idea of combining as many offers from different vendors as possible into a single database and organizing extensive search capabilities for this database is at the heart of the catalogue site. It is assumed that instead of working with a large number of catalogues and price lists of individual suppliers, buyers will use a single electronic catalogue.

The organization of the catalogue site is very similar to the organization of the catalogue of goods online store. But if the online store itself is engaged in the reception of orders, their processing, delivery and receipt of payment for the goods, the site catalogue only provides the user with information about the goods and the sellers. 

The business model of the catalogue site is based on the receipt of income from the sale of advertising and from charging sellers for posting information about their products and services on the catalogue site. 

Auction - a trading platform where the seller puts up for sale their goods, and buyers compete with each other for the right to buy it. The winner is the buyer who offers the best conditions. In recent years, online auctions have become increasingly popular. One of the most popular in the world is the well-known online auction eBay, which is offered daily for sale several million different products. 

Online auctions receive income from advertising, from the provision of additional services to sellers and in the form of a commission from sales.

Advertising business. Development and support of websites

An increasing number of offline companies and Internet projects conduct advertising campaigns on the network. But the advertising campaign must be planned, advertising media should be made, placed on the Internet and monitor the effectiveness of the campaign. 

When creating a website, you need to design, fill the pages with the necessary information, write appropriate programs and place the website on the server. 

Not all companies have the necessary equipment and specialists capable of performing the above operations. In order to help them bring their business, products and services to the Internet, there are professional website developers, advertising agencies and companies that provide hosting services. Often all these services are provided by the same company. 

Advertising agencies are professional participants of the Internet advertising market. They provide customers with the following services:

  • determination of compliance of network advertising opportunities with the customer's goals. The issue of recommendations on the types and volume of advertising;
  • development of advertising strategy.;
  • determination of the target audience and methods of advertising focus on this audience;
  • drawing up a media plan for an advertising campaign. This service includes the selection of specific advertising platforms, banner networks, mailing services, etc.;
  • develop creative ideas advertising campaign: slogan, unified style, a common ideology;
  • creation of advertising media and possibly a special promotion page in accordance with the idea of the campaign;
  • reservation of advertising spaces on selected advertising platforms and placement of advertising on them by the customer within the terms provided by the media plan;
  • carrying out PR-actions in the network provided by the media plan;
  • site registration in search engines and directories;
  • analysis of the advertising campaign and making operational changes to the media plan in agreement with the customer;
  • analysis and evaluation of the results of the advertising campaign. Development of recommendations for advertising campaigns in the future.

For the successful conduct of business advertising agency must enter into contracts with a large number of advertising platforms in different directions. As a rule, the profit of an advertising agency is formed by discounts provided by advertising platforms. Usually, the size of these discounts is within 15-30% of the prices specified in the price list for advertising the site. The advertising agency receives additional income for the services provided to them in the production of advertising media and promotional pages, the development of a media plan, etc. 

Another type of projects that provide advertising services on the Internet is banner networks. Banner networks have no analogues outside the Internet. The basic concept of any banner network is the exchange of advertising between sites. 

Banner network is an Internet service that allows participating sites to share banner displays. 

The specificity of the banner network, as an Internet business, is that, like payment systems, you need to overcome a certain threshold, to collect a large enough number of participants to join the network in order to make further joining attractive to new participants. Moreover, recently there has been a noticeable decline in the popularity of banner networks, and it seems that this type of advertising agencies is a thing of the past. 

Design studios are the companies specializing in the creation of Websites. If, in addition, they provide services to promote the site on the Internet and hosting, they can be called Web-studios. 

Design studios provide clients with the following services: 

  • the development of the concept of the site;
  • assistance to the customer in the development of technical specifications (TOR);
  • the design of the website;
  • selection of software to create a site that best meets the customer's objectives;
  • programming (directly creating Web pages and "building" them into a Website);
  • site support and its modernization;
  • assistance to the customer in the information content of the site (content creation);
  • selection of a partner who will provide hosting and website promotion.

Website design Studio itself should be a model of what the Studio is capable of. Therefore, design studios often make their sites with the maximum of the latest developments in the field of software for Web design.

Online learning

Online learning or e-learning differs from distance learning only in the speed of information exchange and, as a rule, the speed of learning itself. For the organization of a distance learning company, it is important to consider the following basic requirements:

  • subjects and focus of the proposed training and teaching;
  • prospective audience and the ability to conduct a training test (exam) remotely;
  • what level of education you can offer and what will be the cost of training;
  • determine the cost of advertising, website creation, etc.,
  • it is very important to use the maximum means of communication with customers, determine the cost of equipment and personnel.

The last two points involve the cost of funds to obtain real income, so this type of business requires initial capital. 

Financial service

Online trading allows clients to work through the Internet on the stock exchanges and the Forex market. Currently, many banks and financial companies provide this service to their customers. 

The website of the company providing Internet trading services, as a rule, is focused on two main goals: providing convenient work to customers and quick understanding by new visitors and customers of the benefits of Internet trading and its mechanisms. Therefore, the following sections are usually placed on the websites of such companies:

  • company info;
  • the company's services;
  • information about the software;
  • information and transaction protection;
  • demo version of the software;
  • frequently asked questions (FAQ);
  • analytical information;
  • financial news;
  • section for customers.

To provide online trading services, banks and financial companies sometimes produce their own software but more often use ready-made programs. 

Internet banking - provision of banking services via the Internet. The full range of services included in the concept of Internet banking includes almost all the services that an ordinary bank provides to the client, except, of course, cash transactions. 

Internet banking allows the customer: 

  • make payments from your accounts to any accounts in any banks, including payments in foreign currency;
  • buy and sell foreign currency;
  • open new accounts and transfer money to them;
  • replenish accounts of corporate plastic cards and withdraw funds from them;
  • receive information about incoming and outgoing payments and current account statements;
  • revoke erroneous payments when the need arises;
  • receive information and consulting services. 

The website of the Bank, which provides Internet banking services to customers, should provide convenience to customers, and provide new visitors with the most understandable form of information about the range of services and benefits that they will receive using Internet banking. 

One of the most important issues that should be given considerable attention on the site is the methods of information protection used by the system. The client must be sure that no one will gain unauthorized access to his accounts and to information about the operations performed by him. The range of services provided is also an important feature of the Internet banking system. The closer it is to the range of services of an ordinary bank, the more attractive is Internet banking for the client. 
Currently, Internet banking is one of the most dynamically developing areas of Internet business in the world. This is facilitated by the high demand for its services by the market.

Payment systems are another dynamically developing type of financial services on the Internet. In many ways, they are similar to Internet banking, especially payment systems that operate real bank accounts (payment systems for goods and services on the Internet using credit and debit cards). Payment systems of another type do not use bank accounts but operate with virtual monetary obligations. 

The functions of payment systems, as a rule, are as follows: 

  • opening and maintenance of virtual customer accounts;
  • providing clients with the opportunity to replenish their virtual accounts in various ways (bank transfer, cash, postal transfer, activation of special cards issued by the payment system, etc.);
  • providing clients with the ability to withdraw money from the payment system to bank accounts, in cash, etc.;
  • implementation of transactions (transfers) between customer accounts, storage of data on transaction history;
  • account security (prevention of unauthorized access) and protection of client information;
  • consulting customer support;
  • uninterrupted functioning of the hardware-software complex of the payment system. 

Payment systems on the Internet are created and will be created, but only by large companies with significant investment opportunities.

A hedge fund is typically a private investment partnership that invests primarily in publicly traded securities or financial derivatives. However, some of the funds do not limit their activities in these areas, and also work in other markets, such as commodity. In principle, the market segment around which the interests of these financial institutions are concentrated is entirely determined by the objectives pursued by them. 

The hedge fund has two types of partners: a Common Partner and a Limited Partner. 

A Common Partner is a person who starts a hedge fund. It also conducts all the daily activities of the existing fund. 

Limited Partners participate with their capital, but do not participate in the trade and daily activities of the fund. A typical form of organization of a Common Partner - LLC (Limited Liability Company), while he is infinitely responsible in the partnership. A limited partner of an investment partnership is responsible only within its investment in the partnership. 

For all types of services provided by a Common Partner, he receives an incentive fee determined by the partnership agreement. Usually, it is about 20% of the net profit of the partnership. In addition, the designated administrative board, whose size usually is 2-3% of net assets. 

The result of the hedge fund is distributed among all partners in proportion to their share participation. All Partner relationships are set out in detail in the partnership agreement, which is the most important part of any hedge fund. 

Offshore hedge funds are usually a mutual fund that is resident in tax-exempt areas such as Bermuda. They also have access to the same investment technologies as hedge funds, so in this perspective, they are related. But, nevertheless, between them, there are some differences that are not always easily visible. Basically, it concerns the structure of the distribution of income from operations, the principles of entry and exit from the partnership, as well as information transparency of the results of the business. 

The difference between a hedge fund and other forms of financial institutions is mainly that it is freer to choose an investment style. In addition, investment strategies that a hedge fund may practice are not limited to buying securities, as well as hedging through stock options, which is usually limited to the impact on the risk, the residual value of which may remain significant. 

Numerous and wide opportunities of the market of derivative financial instruments can be used by hedge fund managers with a much higher degree of freedom, unlike other forms of investment organizations. The hedge fund is an interesting channel for placing resources on the market from the point of view of an ordinary investor who does not want to burden himself with concerns about decision-making. With this issue, everything is clear: entered into a partnership and it remains only to monitor the status of your funds.

Informational business

News, latest information, sensations... all this attracts network visitors to information sites and provides high attendance. Companies need a variety of information to run a business. If this information is not publicly available, then companies turn to paid sources. 

Sources of income of news sites can be divided into two groups: advertising sales (advertising business model) and sale of access to information. Accordingly, information posted on news sites should be updated in a timely manner. 

Naturally, the cost of maintaining a news site up to date is quite high. In order for some information to be sold, it must have the following characteristics:

  • unavailability of access to a wide range of network users without payment;
  • efficiency-ideally, the information should come in the form of a news feed, in which the news is published with a delay of one minute to ten minutes after the event occurred, which is referred to in the news;
  • reliability - as a rule, the client buys access to any news not just out of curiosity, but for making financial and management decisions. False information can cause damage to it and lead to serious consequences;
  • completeness - no important news or data should be missed because, as in the case of false information, the customer may suffer losses due to the fact that he did not know about the event, about which he had to know to make a decision.

Information efficiency is not always required, but only when it is necessary to react to events instantly. The rest of the characteristics of the paid information must be present in any case. 

Let's take a closer look at what information resources can be successfully sold through the Internet: 

News feeds (online-news)
Quite a wide range of managers of companies of various profiles need to learn about the events taking place in the world immediately. For example, the financial and political news feed is vital for traders to make decisions about sales and purchases on the exchanges.

Subscriptions to electronic copies of periodicals
Some newspapers and magazines issue their full electronic copies and provide access to them. As a rule, such resources use an integrated approach to attracting customers and in addition to publishing their own works and novelties of the genre, provide an excellent archive with the ability to download books for free in various formats (txt, pdf, doc or docx and other), which is a good bonus for regular readers.

Access to electronic archives and databases 
Naturally, paid access to large amounts of information should be supplemented by a service to search for the necessary data in the database. Access to databases may be subject to a subscription fee (per week, month, etc.), access fee for every single document, or a fee for the volume (in megabytes) of the downloaded information.

 Analytical reports and research 
Instead of providing the client with access to databases, the company itself can, on the client's request, analyze the materials stored in the database and prepare a report on the issue of interest to the client. As a rule, such a report is obtained better than the information that the client would have received himself, because the company's employees have more experience in working with the search engine, which is equipped with a database, and are more likely not to miss anything important.

Own analytical materials and forecasts. 

Along with the analysis of databases, the company can analyze the markets, political and economic situation on its own and make its own forecasts and research. Such information can also be sold, although services to provide it can be attributed not to the information business, but to consulting services.

Huge attendance has sites that host articles on programming, which is possible to download or buy books on programming and web design. 

A programming language is just an example. On reflection, you can come up with many ways to get and sell the information you need to people. Of course, at the initial stage, the information will have to be made publicly available, and maybe it will always be so, but the huge attendance of information resources has always brought large revenues from advertising. 

Gambling or gaming business

Now the network has incredibly many different casinos and online games. The income brought by such a business is large, but the cost of promotion and advertising is not smaller. 

Gambling usually involves a permanent presence of an administrator in the network, so alone it is possible to keep only a small playground with simple games with rates, but the income will also be small. 

Organization of a large online casino or creation of a multiplayer game will require the expansion of the staff of the company and the organization of 24-hour support and administration. To date, the most effective can be the creation of simple games designed for download on mobile phones and the organization of a website for the sale of mobile content. But if you still want to try to keep the casino - there is nothing easier: ready-made casino programs for every taste are available for sale and quite inexpensive.

In addition to casinos, game portals occupy a worthy place, where players are not doing direct rates, but perform virtual purchases and get virtual profit in real currency. 

In the network, a lot of games donate to buy virtual gadgets or weapons, for the improvement of the virtual character or his image. At the same time, such purchases are not mandatory, players decide to buy something or achieve gaming success at no additional cost. However, practice shows that most players prefer to spend a small amount on "super-weapons" and "beat anyone" and then repeatedly try to win under normal conditions. As a rule, the cost of virtual gadgets is small, and the profit of the project is achieved by sales. 

It is quite another thing when the game project is already quite promoted, in this case, the owner not only increases the volume of virtual gadgets but also attracts wealthy advertisers, extracting considerable profits from the sale of advertising spaces on the game portal. Players also consider promoted projects to be more interesting, including in terms of earnings on the games. So popular way earnings on games are selling "busted accounts". Experienced players perform game tasks, improve their characters and bringing them to the required level, put up for sale for players who have money, but do not want to engage in tedious and long-term actions in the game.

Currently, the Internet has a lot of game projects, but the game - this is an area in which you can always come up with something new or improve the old. In this business, the result is necessary - the receipt and increase of profits, many examples, you just have to try.

Communication service

Communication services via the Internet can be both free and paid. Services that provide services for free are usually focused on the mass use and build their business on an advertising model. 

E-mail has received the widest distribution on the Internet. Almost all network users have their own e-mail boxes. In some cases, e-mail services are available for a fee. 

Live chat or IRC (Internet Relay Chat). 
The chat interface is usually a window in which text messages are constantly appearing, typed by the participants of the discussion from the keyboard, the conversation is conducted in real time. In this case, the conditional sender name and the time of message creation are automatically specified at the beginning of each message.

If e-mail is a system for transmitting messages mainly from one user to another, the forum transfers information from one user to many. At the same time all the correspondence, which is conducted on the forum, is available to all users of the forum. This form of communication is very convenient for open discussion of any topics and issues. Usually, on the forum's website, all the discussed issues are divided into categories. Within each category, there are subcategories and specific topics discussed, usually created by users. Within each topic, users ask questions, get answers, and leave their comments. 

Forums can be: 

  • opened - discussion opened to all interested people;
  • closed - only registered users are allowed to participate;
  • thematic - a certain topic or a range of topics are discussed;
  • general - a range of topics is not restricted, often the organizers of the forums are using the advertising business model. Many forums are just clubs for interests and do not pursue commercial purposes. 

The forum is interesting only when it involves a lot of people. In this case, the discussion is lively, i.e. answers to the posted messages appear quickly enough. Accordingly, a new forum is always a problem of the first generation audience.

There is a great variety of forums in the network, but today you can find a topic of little coverage and worthy of discussion.

The use of the Internet as a channel for messaging and voice communication is constantly expanding. In addition to the services described above, are practiced:

  • IP-telephony (voice communication using Internet channels);
  • sending messages to pagers from sites of paging companies;
  • sending SMS messages;
  • file transfer via FTP. 

This list can be continued, and the further, the newer communication services via the Internet will be available on the market.

Discussion