Read the case study below and answer the questions that follow. The Amazon Effect: How do E-commerce Companies Make Money? Source: https://hackernoon.com/the-amazon-effect-how-do-e-commerce-companiesmake-money-720fc4daeba5 Amazon is the ecommerce titan the industry has been waiting for. Net sales have been rising since 2014. In 2016, Amazon grabbed 70% of the total sales, and service sales have only been growing since then. For all those wondering is ecommerce profitable, the answer lies in Amazon’s undeniable success, so much as that the “Amazon Effect” has even entered the lexicon of industry analysts. In terms of operating income, growth has been driven by high margins from service sales. Revenue sources, AWS services and Amazon Prime subscriptions have been rising at phenomenal rates, too. A revenue generation model is a critical component of the ecommerce business plan. Anybody looking to understand how to start a successful ecommerce business needs to understand that making money is the key to thriving and not just surviving. The ecommerce business model unlocks value and is the key driver of value. It makes all the difference between a unicorn and a failed start up. Scaling up to a billion-dollar value is a dream come true for many ecommerce businesses. For understanding how ecommerce businesses make money, business models offer further clarity. QUESTION 1 1.1 The article above states: “A revenue generation model is a critical component of the ecommerce business plan”. Explain the conflicting issue associated with the use of all revenue generation models and four solutions that may be used to resolve this issue. 1.2 The article above further states: “Amazon is the ecommerce titan the industry has been waiting for”. Describe two major challenges of adopting online advertising as the sole revenue.
Read the case study below and answer the questions that follow.
The Amazon Effect: How do E-commerce Companies Make Money?
Source: https://hackernoon.com/the-amazon-effect-how-do-e-commerce-companiesmake-money-720fc4daeba5
Amazon is the ecommerce titan the industry has been waiting for. Net sales have been rising
since 2014. In 2016, Amazon grabbed 70% of the total sales, and service sales have only been
growing since then. For all those wondering is ecommerce profitable, the answer lies in
Amazon’s undeniable success, so much as that the “Amazon Effect” has even entered the
lexicon of industry analysts. In terms of operating income, growth has been driven by high
margins from service sales. Revenue sources, AWS services and Amazon Prime subscriptions
have been rising at phenomenal rates, too. A revenue generation model is a critical
component of the ecommerce business plan. Anybody looking to understand how to start a
successful ecommerce business needs to understand that making money is the key to thriving
and not just surviving. The ecommerce business model unlocks value and is the key driver of
value. It makes all the difference between a unicorn and a failed start up. Scaling up to a
billion-dollar value is a dream come true for many ecommerce businesses. For understanding
how ecommerce businesses make money, business models offer further clarity.
QUESTION 1
1.1 The article above states: “A revenue generation model is a critical component of the
ecommerce business plan”. Explain the conflicting issue associated with the use of all
revenue generation models and four solutions that may be used to resolve this issue.
1.2 The article above further states: “Amazon is the ecommerce titan the industry has been
waiting for”. Describe two major challenges of adopting online advertising as the sole
revenue.
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