ELETRONIC COMMERCE 5
Oneof the most interesting electronic commerce models is the“name-your-own -price model. It is an inventive pricing conceptwhere the customers have the opportunity to pay any price they wishfor particular products and services (Turban, 2015). In fact,customers can even opt to pay nothing. It is based on the assumptionthat only a limited number of customers would choose to pay nothing,as this would be considered as unfair. This concept was pioneered bythe Preceline.com. Basically, the model is that of a C2B reverseauction, in which vendors bid on a job by submitting offers and thewinning bid (lowest priced vendor) or the one who attain the buyersrequirements gets the job (Turban, 2015).
InPriceline.com buyers were in a position to bid for a product orservice such as hotel room, In the event that the consumer bidexceeded the undisclosed price for the product or service, thetransaction could be completed (Turban, 2015). The company earned thedifference between the price quoted by the customers and the pricecharged by the vendor, in this case, the hotel.
Toolsused in Combating Fraud
Basedon the research conducted by the National Consumer League of all thee-commerce activities taking place on the online platform, fraud wasthe most serious and prevalent in e-auctions. Nonpayment andnon-deliverance merchant were the most prevalent offense, accountingfor about 32.9% of the complaints received. Internet fraud amountedto for 25.5% of the referred complaints.
Inthis light, companies have come up with the following ingeniousmethods to prevent internet fraud.
Authenticationservices:Some companies are providing authentication services that help todetect counterfeits products. Authentication is not a simple process,but experts can use subtle details to detect fakes (Rischpater,2004).
Useridentity verification:Companies can use the services of firms such as Equifax to verify theidentity of the user. The company seeking such services runs avoluntary program that requests users to provide accurate informationfor online verification. For instance by providing their date ofbirth, social security number or even the licence number users canqualify for the highest level of verification (Rischpater, 2004).
EscrowServices:In a transaction worth more than $200, or in the circumstance wheneither the seller or buyer feels the need for additional security,Escrow services can act as a go-between and ensure the interest ofboth parties (Rischpater, 2004). In this arrangement, the buyer sendsthe payment to the escrow service, which confirms the payment andnotifies the seller. At that juncture, the seller dispatches theproducts to the buyer. After a given period and upon inspection bythe buyer, the buyer notifies the Escrow service, which then sendsthe money to the seller (Rischpater, 2004).
Thethree basic types of B2B marketplaces and services
Thisis an internet based market places in which one firm sells tonumerous companies from auctions.
Thisis a private electronic- marketplace in which one company or firmmakes purchases from numerous invited suppliers (Ariqah, 2010).
Inone-to-many and many-to-one markets, a single company does either allthe buying (buy-side market) or selling (sell-side market) (Ariqah,2010). Due to the fact that e-commerce focuses on an individual firmbuying and selling needs, this type of e-commerce is also calledcompany centric EC(Turban, 2015). In a company –centric e-commerce,the company has total control over all the transactions and anysupporting information systems. The wone of the market has the powerto restrict and control trading parties. These markets are on thebuyer’s or seller’s website or hosted by a third party company.
Inthis market, there are many sellers and buyers who meet on theelectronic platform to trade with each other. There exist many typesof public exchanges (Turban, 2015). These types of market are alsoknown as r exchanges. Unlike private exchanges, public exchanges areopen to any willing party (buyers and sellers), and one company doescannot restrict another business nor does it have total control ofthe trading parties (Turban, 2015).
Ariqah,W. (2010). B2BE-Commerce.Prentice Hall.
Rischpater,R. (2004). EBayapplication development.Berkeley, Calif: Apress.
Turban,E. (2015). Electroniccommerce: A managerial and social networks perspective.