Post-project

After submitting the project for checks, we were told that we were on the wrong track, and we realized bargaincity is not a Transaction Broker. Thus, researched about what is the exact meaning of a transaction broker To our surprise, there were various competing definitions of a Transaction Broker.

1. K.C. Laudon & J.P. Laudon

• saves users money and time by processing online sales transactions,
• generates a fee each time a transaction occurs,
• provides information on rates and terms
• examples - etrade.com, expedia.com

2. Michael Rappa is director of the Institue for Advanced Analytics at North Carolina State University.

• provides a third-party payment mechanism for buyers and sellers to settle a transaction

• examples - paypal.com , escrow.com

3. Lecture

• provides coordination services and documentary supports between the buyers and sellers (of products and services).
  
• The transaction broker's online platform offers a range of products and services (offered by the selling parties, who are ultimately responsible for providing the products and services transacted through the transaction brokers).
  
• You will note that the transaction brokers neither own nor produce any of the products and services on offer, and are not resellers.
• examples - Hotelroom brokers (such as Accomline, Hotels, cTrip), airticket agents (such as Zuji.com) and insurance broker (such as inspro
• Do note that technically ebay, amazon, paypal, SIA, tuition centres are all not transaction brokers.

The project helped us to understand that we had the wrong concept of transaction brokers, that transaction brokers are not resellers (thus, bargaincity is not a transaction broker too). We may have made a mistake in our planning but it was worth it as we learn even more through our deficiencies. There is saying, 'Failure is the stepping stone to success'. Below is the project:

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Introduction

The Transaction Broker e-Business Model is defined here as as an intermediary acting on behalf of sellers and buyers in order to facilitate transactions between both parties, through the use of the Internet as a medium. While the characteristics of the Transaction Broker can have several common characteristics, it must be noted that individual Transaction Brokers have their own distinctive features in terms of purpose, features, designs, strengths, weaknesses, security, privacy, pitfall and problems. In order to illustrate this distinction, we will be using bargaincity.com.sg as a case study. One important element of this case study is that it is a local website. As we shall see later, this will have important implications for bargaincity as a Transaction Broker.


Purpose of Bargaincity.com.sg

• Bringing consumers the latest products

• Offer competitive prices

• Provide thorough and reliable services
  

• Provide more information for photography enthusiasts

All these purposes serve to increase the profits of the owner(s), which is arguably the main purpose of the site.


Features

Here are some features listed in the site:

• 24-hr shopping

• ultra competitive prices

• low delivery fees

• risk-free shopping

• smartshopper program

• 7-days 1-to-1 exchange policy

Some of these features are a direct result of using the Transaction Broker e-Business Model, such as 24-hr shopping and competitive prices (which includes low delivery fees). What makes this particular e-business unique is that it understands consumers' fears of goods being faulty, counterfeit, or even never arriving. Therefore the risk-free shopping element allows consumers to pay on delivery. Other features which are distinctively unique to this particular company is that it includes features which are only commonly seen in storefronts. These features are the smartshopper program and the 7-days 1-to-1 exchange policy.



Website Design

At first look, the design of the website might look clunky and messy. However after a few minutes on it, shoppers will find it easier to navigate. The different products are categorize in groups on the left for easy access. Most products are also photographed to show customers whaty to expect. Plus, the products sold are well detailed in a sense that they tell u everything u get when u purchase that particular product. Colours used here are simple but however, it also stands out with bright colours to emphasize a 'selling' mentality.


Strengths of the Transaction Broker e-Business Model

1. Decreased overhead costs translates into cost savings for consumers

• cost of physical rental/asset/space

• labour cost to man the shop

• back office for support work

2. Increased convenience for consumers

• saves search time

• saves physical energy in the search for a suitable product at the lowest price

3. Allows consumers to weigh the pros and cons for the supplementary products whose opinions would not be swayed by the salesman.

4. Typically offer reviews and ratings from other consumers or from specialists across products, which consumers will find helpful, as compared to the Virtual Storefront e-Commerce Business Model which would only show the merits of the product.


Strengths of the site

1. The risk-free shopping feature encourages more sales from consumers

• due to a decrease in risk

2. The risk-free shopping feature also saves the company the hassle of ensuring high levels of security and privacy

• especially in the area of monetary transaction.

• Monetary transactions increases the complications of designing the website.

• Without this complication, the website can merely serve informative purposes, be it product information or price information

3. Smartshopper program

• increases the chances of customers returning

• encourages loyalty to the site

• provide incentives for loyal customers

4. Website caters to local requirements

• provides low cost delivery as compared to if consumers were to order from international websites and pay exorbitant shipping rates

• arguably increased reliability in terms of exchange policy (it is possible that the company later reneges on their promises)

• lower chances of miscommunication due to language/culture barriers

• lower costs for both sellers and buyers as both parties do not have to bear forex risks

5. No credit card facility lowers the prices of goods for consumers

• companies which offer credit card facility will increase the prices of goods in order to compensate charges by the credit card company

Weaknesses of the Transaction Broker e-Business Model

1. intense competition from rival transaction brokers or storefronts

• lowers profit to the bare minimum (any slight increase in price in an attempt to increase profits will cause sales to tend to zero)
• almost like a perfectly competitive market structure

• the reason that sales will not drop to zero immediately is mostly due

1. imperfect information by consumers
2. minimal differentiating features such as, in this case, smartshopper programs

2. On the other hand, small-scaled transaction brokers often feel pressurized to increase prices as the revenue does not cover costs or does not provide a sufficient income for long-term survival

3. very hard to gain market share, market recognition or even consumers' knowledge of your existence

4. Harder for regulators to tax

5. Consumers would not be able to access the rich experiences of the regular salesmen


Weaknesses of the site

• does not offer reviews and ratings by end-users as compared to other Transaction Brokers

• products are not comprehensive enough

• most locals are not aware of the site - need to create awareness

• products are not cheap enough - there are cheaper alternatives, which might be the main reason for the lack of business for bargaincity.com.sg

• information on international shipping has to be inquired - decreases convenience for consumers

Privacy

Bargaincity is comitted to the privacy and security of electronice commerce. Bargain city does not sell or rent personal information to others. Such information are names, e-mail addresses, billing addresses, shipping addresses, telephone numbers and payment information. They cliam the sole purpose of customer information is to fulfill orders, contacting purchasersto inform of thier order status, sending promotional information, enhancing the operation of thier site, for statistical purposes and to administer thier systems. They may use third parties to do the above, thats when they give these third parties the information needed to do the job. These sometimes includes the personal information.


Conclusion

In conclusion, Bargaincity as a transaction broker will definitely help to ease the shopping for consumers, Especially those who does not have the luxury of time. From our research, we have seen that Bargaincity is a business to consumer e-commerce (consist of buying and selling of products over electronic systems such as the Internet) transaction broker. In our opinion, Bargaincity has what it takes to be a top transaction broker according to its strengths. However, similar to other websites online, Bargaincity is not without its weaknesses and there is still room for improvement.