Research On Profit Model Of E-commerce Companies

With the popularization of Internet technology and the expansion of Internet users,Internet retailing came into being and quickly divided the market of traditional retailers.Faced with the impact of online retail and the decline of the entire retail market,some traditional retailers decided to use the Internet to develop the retail industry in search of new profit points.As one of them,Suning gradually explored a profit model suitable for its own development.This paper takes Suning as an example to study the profit model of e-commerce enterprises.It is hoped that the Suning profit model can be improved while providing reference cases for other enterprises.This paper uses the literature research method and case analysis method to study the profit model of Suning.First,it defines the components of e-commerce definition,classification,industry characteristics and profit model.Secondly,it briefly introduces the business strategy of Suning,and analyzes the profit model of Suning from the five elements of the profit model.Then,using Gome retail as a comparison object,the profit model of Suning was evaluated from a financial perspective.Finally,on the basis of summarizing the advantages and disadvantages of Suning's easy-to-buy profit model,it gives suggestions for Suning and the e-retail industry.Through the research on the profit model of Suning,on the one hand,Suning has strong self-operating ability and perfect sales system,and has advanced science and technology;on the other hand,Suning's core business has weak profitability.The quality of earnings is poor,and the base of total liabilities is too large,and the proportion of current liabilities is too high.The main reason is that Suning is in a transitional period,with large capital needs in various aspects,and the profitability of the retail business is insufficient.Therefore,while developing a diversified business,Suning should focus on developing core retail business and appropriately slow down the expansion rate;at the same time,increase the company's free cash flow and reduce the proportion of current liabilities.