Overview of E-Commerce

Overview of E-Commerce

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Introduction

Electronic Commerce or e-commerce, as it is popularly known, is done through the Internet. Most businesses are now performing transactions on the Internet. E-commerce is as complex as traditional commerce but is easier to manage.

Definition

E-commerce refers to the method of conducting business communication and transactions over networks and through computers. Electronic commerce includes the buying and selling of goods and services, and the transfer of funds, through digital communications. EC also includes all inter-company and intra-company functions that enable commerce and use electronic mail, EDI, file transfer, fax, video conferencing, workflow, or interaction with a remote computer. Typically, e-commerce sites are used to complete the e-commerce processes. An e-commerce site is any site involved in the buying and selling of goods and services. An e-commerce transaction typically requires a shopping cart system and a payment processing system.

Why Use E-commerce?

There are many reasons for adopting e-commerce. Some of them are described below:

• It opens new markets: The merchants are able to sell their goods to those areas that are beyond their reach. They can use the Web sites to advertise and market their products and services to those areas that are outside their geographical area. The consumers can buy goods without accessing the physical store of a merchant.
  
  
• It increases efficiency: In traditional e-commerce, there are several barriers between a business and the consumers. These barriers are distance, business hours, distributors, and middlemen. A merchant can use e-commerce to overcome these barriers. He can directly communicate with his consumer and can advertise and sell his goods online, etc.
  
  
• It extends the capabilities of traditional commerce: An e-commerce site provides various options to a merchant, which he can use to increase his business. A merchant can sell his goods, advertise for the products and services of other merchants, and permit other merchants to advertise their products and services.

History of E-Commerce

E-Commerce is not just related to the Internet. It is performed through various electronic media such as telephone, fax, and television. E-commerce started through networks due to the sharing of business data. This sharing is known as Electronic Data Interchange (EDI). EDI refers to the transferring of data among companies through networks. The data that is shared among the companies are purchase orders, invoices, sales orders, etc.

The Users of E-commerce

Companies: The main aim of companies is to increase the number of consumers on their Web site. Companies are using e-commerce sites to reduce the cost of conducting business. Avoiding middlemen, eliminating paperwork, etc., reduces the cost.

Consumers: Consumers get various facilities from e-commerce. The benefits that a consumer gets are as follows:

• Wide variety of goods
• Privacy
• Security
• Direct contact with the company

Government: The government is still trying to find ways of governing the Internet. The big issue with governance of the Internet is that it is a global entity.

Characteristics of a Successful E-commerce Business

The following are the characteristics of a successful e-commerce business:

• Generating demand for the products and services: The demand for the products and services provided by a company should be told to the consumers. There are several methods by which the consumers can be made aware about the products and services, such as through Web advertising, e-mail, etc.
  
  
• Ordering the products or services: The process of ordering a product or service should be easy and straightforward. A complex ordering process should be avoided.
  
  
• Fulfillment of the order: The Web site of a company should provide an automated e-mail to inform the consumers about their orders. The company should be in contact with the consumers until the order is fulfilled.
  
  
• Payment processing: This is the most important part of a transaction between a buyer and a seller. The mode of payment is mostly done through a credit card. The important part is that the transfer of funds from a buyer to a seller should be done securely. If the credit card number is hacked, it can be misused.
  
  
• Service and support: A company should provide good consumer support and service to show its loyalty to the consumer. The company should provide help system and contact details to the consumer, so that he can easily access his order information, shipment details, etc.
  
  
• Security: Online data can be stolen and misused by unauthorized users. Online shoppers should adopt every possible security measures to secure data such as the consumer's home address, credit card number, etc.
  
  
• Community: E-commerce sites can be used to create a sense of community. The online community can be created by using the message boards, notification e-mails, etc.

Types of E-Commerce

There are four types of e-commerce as follows:

• B2B: B2B e-commerce refers to Business-to-Business e-commerce. This type of e-commerce is performed between two businesses.
  
  
• B2C: B2C e-commerce refers to Business-to-Consumer e-commerce. In this type of e-commerce, businesses sell their goods to the general public.
  
  
• C2B: C2B e-commerce refers to Consumer-to-Business e-commerce. This type of e-commerce is performed between a consumer and a business. A consumer can post his goods and services online to sell them to a business.
  
  
• C2C: C2C e-commerce refers to Consumer-to-Consumer e-commerce. This type of e-commerce contains auctions, forums, etc. where consumers buy and sell their goods.

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