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Analysis of e-Commerce and keys for succesful companies

Analysis of e-Commerce and keys for succesful companies
The number of American households shopping on the Internet is increasing every month. In the month of February, 13.5 million households shopped online compared to 13.3 million in January. Per person spending increased from $228 in January to $308 in February (Enos, 2001). Old Economy companies have taken notice and are moving quickly to embrace this new sales channel. These companies realize that the use of the Web will help to cut costs, find new customers and keep the ones they have (Schoen, 2001). A recent survey by InformationWeek Research found that 65% of respondents say the percentage of their companies total revenue being generated by E-business grew in the past twelve months (Murphy & Heun, 2001). Developing a company web site can be expensive. A small site with 25 pages can cost more than $200,000 and larger sites with hundreds of pages can easily exceed a total of $1 million (Jarvis, 2001). This does not even include costs to handle customer service, product fulfillment, marketing, transaction security, payment services, and site maintenance. To save money, many of these companies are outsourcing their E-business activities to New Economy companies called Commerce Service Providers (CSP). One particular CSP that I feel is the leader at helping companies grow online sales is called Digital River based in Eden Prairie, Minnesota. This term paper will show how Digital River is so effective in helping Old Economy companies market and sell their products over the Internet.





DIGITAL RIVER SERVICES





Defining what a CSP does is becoming more difficult as these companies continue to add to their offerings and change their scope. A general definition of a CSP is a vendor that supplies the system and services to establish the infrastructure for E-businesses. This can include processing secure transactions; collecting payments and issuing e-mail receipts; managing customer relationships; and fulfillment processes (Nesdore, 2001). Digital River is one of the best examples of a CSP who has extended its reach. To gain an understanding of what services Digital River offers, I have included the following paragraph from Digital River’s web site. “Digital River, Inc. is a Commerce Service Provider, providing over 8,000 companies with e-commerce solutions. The Company’s front-to-back E-commerce services include site development and hosting, order and transaction management, system integration, fraud screening,...

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