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II.  Direct Sales

Direct sales on-line, known as e-commerce, have recently become a major focus of the traditional business world. Some reasons for this are the business model associated with e-commerce, the convenience of on-line shopping, and the explosive growth of the Internet in general.

     A.  The E-Commerce Business Model

An excellent example of an e-commerce business model would be a publishing company. In the past, when a book is published it is stored in a warehouse; from the warehouse it goes to a distributor, who sends it to a wholesaler, which in turn sells the product to a book store. This is both a costly and time consuming method of introducing a product to the consumer.

E-commerce has completely revolutionized this process. The same publisher doing business on the Internet can cut out the distributor, wholesaler, and the book store all together. These would be replaced by a web site in which consumers can order the books directly from the publisher. Then the publisher can ship the product directly from the warehouse to the consumer. In this example, the warehouse is also a distributor, whereas the web site replaces both the wholesaler and the "brick and mortar" book store. Marketing the product in this manner saves both the company and the consumer a great deal of money.

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