When I was in China, I wanted to go to buy a cheap cooker in Walmart but I was really tired of going out. Suddenly, I realized that I can shop online. After checking out on Taobao, I felt that the e-commerce is really convenient and economical. I paid $10 to purchase a small cooker online, instead of buying it in much more expensive price. The experience of online shopping linked to the knowledge of direct business model that I studied in class. The model allows companies to cut the middle cost and reduce the price.

http://www.channeladvisor.com/blog/?tag=alibaba

Not only Dell but also some electronic commerce giants uses the direct business model. As I mention above, Taobao is a website for thousands of small business owners to sell their product directly. Alibaba, the company of Taobao create a consumer-to-consumer and business-to-comsumer market place, which gives many small manufacturers chances to sell to consumers directly. The model also offers the small merchants in Taobao to build their own relationship with the consumer. Thus, manufacturers can produce differential products for some consumers.

http://studyinchina.universiablogs.net/2013/02/25/the-wonderful-world-of-taobao/

The advantage of direct business model helps a lot for Ablibaba. Millions of customers (include me) keep their loyalty toward Taobao. Although we buy some “lemon” on Taobao sometimes, the differential and cheap products supplied on Taobao make us continually use the website. Ablibaba has booming revenue every year.

In today’s society, advanced technology infuses almost every part of our life, when a company realizes the importance of an appropriate business model and technology, it may get to succeed.

Reference

Media, Demand, and Matt Petryni. “Direct Sales Model Advantages.” Small Business. Web. 4 Oct. 2015. <http://smallbusiness.chron.com/direct-sales-model-advantages-32207.html>.

Osawa, Juro. “How to Understand Alibaba’s Business Model.” MarketWatch. 15 Mar. 2014. Web. 4 Oct. 2015. <http://www.marketwatch.com/story/how-to-understand-alibabas-business-model-2014-03-15-94855847>.