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The Webmastering Business

November 27, 2007

webmaster journal The Webmastering Business Creating and maintaining a website has become big business in recent years. Websites help expand the possibilities of traditional business methods. There are various types of online businesses that a webmaster or system administrator can launch today.

These include:   1. Auction websites.

Auction websites enable people to buy and sell products online just like a real auction. Customers can engage in competitive bidding to buy or sell different products or services with the webmaster serving as the administrator. The auction process is facilitated and regulated by auction software. Auction software can either be used on a web server for online auctions or as a stand-alone program to facilitate live auctions. Some of the companies that produce auction software include Netmerchants, Siebel, Moal Technologies, and Bid Stream. Examples of auction software include Auction Sniper, Auction Ads, and i2i Auction. Some auction software, such as Call My Auction, allows users to access auction websites offline.

Online auctions are usually conducted in two ways: business to person or person to person. In business to person trade, the webmasters of the auction website actually possess the goods that are for auction and accept payment for them. In person to person trade, the website only serves as the host of the auction and the webmasters are not actually involved in the trading. Online merchants and retailers offer goods for auction directly on these websites and buyers pay them directly.The actual online auction process has two main types: English auction and Dutch auction.

In English auction, the bidding price starts low with the highest bidder winning the auction and buying the product. This is the most common online auction method. In Dutch auction, multiple similar items are auctioned and all winning bidders pay the same price which is the lowest successful bid. Buyer can buy the whole stock of the auctioned goods or a specific quantity that they prefer.

eBay is the most popular auction website today. It was established in 1995 by Pierre Omidyar and has since grown to be the world’s largest auction website. eBay does not actually sell goods that it possesses but only serves as an online market for businesses and individuals who want to auction off products and services. eBay assists online merchants in listing, bidding, and purchasing goods. eBay has achieved phenomenal success which enabled its founders to become millionaires. It now has 28 international websites including sites based in Australia, Brazil, Canada, China, and the United Kingdom.

Aside from facilitating the trade of products, auction website businesses are now involved in outsourcing services like programming and web design. Guru.com, an online service marketplace, is outsourcing services such as website design and marketing, advertising, business consulting, and database development. The UK website “earn.co.uk” uses the auction process to provide various local services like building construction, laundry services, and legal assistance.

2. Online Retail.

Most business websites serve as promotional tools for businesses or as online trading facilitators. Online retail websites are self-contained enterprises that offer and sell products such as software, books, and music. Buyers or “online shoppers” can purchase these products through the website’s online catalog and online “shopping cart.” Online shoppers usually pay for these products using through credit cards. Some online retail websites also allow customers to create user accounts and pay through other methods such as debit cards, C.O.D., checks, wire transfers, and through online payment websites such as PayPal and Google Checkout.

There are several delivery methods used by online retail websites to deliver products once payment from the customer has been received. These include downloads, shipping, drop shipping, and in-store pickup. Digital media products like music, software, and movies are usually downloaded by customers. In drop shipping, the customer’s order is relayed to the manufacturer or third-party distributor who then ships the product directly to the customer. In the in-store pickup delivery mode, the customer first orders online then uses locator software to find a local store where the purchased product will be picked.

Amazon.com is one of the most popular websites that specialize in online retail and e-commerce. It was founded in 1994 by Jeff Bezos and was initially an online bookstore. Amazon.com soon expanded its product line to include electronic media (CDs, DVDs,software), food, clothing, furniture, and electronics. Amazon.com utilized an unusual business plan which did not project a profit for at least four years. This strategy proved effective especially during the “dot-com bubble” crash when many e-commerce enterprises went bankrupt. Amazon.com registered its first profit of $5 million in the last quarter of 2002. Since that time, Amazon.com has steadily increased its revenues, reaching a peak of $10.7 billion in 2006. In 2005, Amazon.com was listed in the S&P (Standard & Poor’s) 500 index. Jeff Bezos was named Person of the Year by Time Magazine in 1999 in recognition of Amazon.com’s exceptional achievements in the online retail business.A May 2007 US

National Retail Federation(NRF)report projected a 19 percent increase in online retail sales that would amount to around $174.5 billion, excluding travel profits. If travel profits are included, the NRF projected an increase of 18 percent amounting to $259.1 billion for online retail revenues. Online retail revenues, excluding travel, increased by 29 percent to an estimated $146.4 billion in 2006. The NRF report also mentioned that Americans spent more money on clothes than computers through online retail. The total sales of clothing, footwear, and accessories reached $18.3 billion in 2006. For this year, the NRF projects that online sales of clothing will reach $22.1 billion as 10 percent of all clothing sales are predicted to happen online. The NRF report stated that online clothing retailers have attracted more customers through extra incentives like free shipping on returns and exchanges.

Online retail sales of computer software and hardware placed second behind clothing sales at $17.2 billion in 2006. They were followed by sales of automobiles and auto parts at $16.7 billion and home furnishings at $10 billion.

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