1. What is E-Commerce? There exists no exact definition ofe-commerce. Generally it is described as any kind of business transaction whereinformation is exchanged electronically. To some people it means shopping at a websiteand buying products online, to other people it means just designing a web pagein a way to increase the customers interest. It does not necessarily describea process of ordering and paying online.Electronic trading, in which a supplierprovides goods or services to a customer in return for payment is just onespecial case of electronic commerce.
Other equally valid examples include internaltransactions within a single companyor provision of information to an externalorganisation without any charge.E-commerce is concerned with attracting newcustomers and therefore it involves advertising, public relations andcollecting information for and about customers. It s not enough to get an online order for aproduct, it s also necessary to have this product and to deliver it to thecustomer.
So e-commerce includes, besides of interacting with customerselectronically, all the things a normal business would also need.Categories of E-CommerceThere are 3 categories of e-commerce - business-to-business B2B - business-to-consumer B2C - business-to-administration- consumer-to-administrationAn example in the business-to-business categorywould be a company thatuses an electronic way for ordering from itssuppliers, receiving invoices andmaking payments.The business-to-consumer category meansselling things to consumers via Internet.
It is the most well-known form ofe-commerce. The business-to-administration categorycovers all transactions between companies and government organisations.The same category exists for consumers andadministration, though it is rather seldom.As the B2C category is the most popular one,we will talk about it. Advantages of E-CommerceThe following list describes of what may bethe main advantages of e-commerce - lower transaction costs if ane-commerce site is organised well, you won t even need any officeequipment however, it is ratherseldom - availability people fromeverywhere and at any time of the day can visit your site, get information andput orders - large quantity of information acompany can build a very large catalogue with a lot of information on the web just think of Amazon with it s 3 Mio. articles - providing up-to-date information you can update your site quickly and make important informationavailable in time - comparing prices and products- quickness the customers ordersand enquiries can be handled immediately Disadvantages of E-CommerceThere are a lot of hard aspects aboute-commerce as the recent failures in this branche show - making people to visit your site getting traffic to come to your web site - how do you make yourself differentfrom a large competition - getting people to buy something atyour site people usually feel VERY uneasy about buying via Internet - you still need money capital tomaintain your system and provide an effective customer supportSo e-commerce does not mean that you can makeprofits easier than in a normal business.
You have to manage allthe activities concerned with marketing, finance, distribution, purchase andpublic relations.These problems are the most relevat ones ascompetition grows all the time and people still try to avoid buying online.Stories about hackers using your credit card number or even large companiesmaking losses in trying themselves in e-commerce all this makes people evenmore sceptical about buying anything online.However, this problems are also common in theold economy.
So there are a few other hard aspects about e-commerce - legality concerning internationale-commerce companies business contracts are defined differently by law inevery country - ownership the copyright problemis a very big one - privacy and securityWhat is Popular With E-Commerce?Here you can see a list of products mostpopular with B2C e-commerce in Austria.There were about 700.000 people who boughtsomething via Internet in Austria in the year 2000. Regardless of the rather bad development ofthe technology stock markets during the past few months, the number of peopleusing internet to purchase products is likely to rise even more this year.If we turn to the practical side of the wholething, what are the most relevant details aboutBuilding an E-Commerce SiteFirst of all, you need what your - suppliers this is not differentfrom a normal company without good suppliers and efficient ways of purchasinggoods you cannot offer products - prices as price comparisons arevery easy on the internet, you must have more competitive prices than thecompetition - customer relations it meanscommunicating with your potential customers efficiently via e-mail, forums,chat-rooms, FAQ-pages, try to provide as much information as possible - fulfillment and service as forevery other company in the real world you must provide quick andcorrect handling of the customers orders as well as an effectiveonline-service will be.Implementing an E-Commerce SiteNow you can step on to creating your site. Generally there are 3 possibilities how youcan do this - enterprise computing E C means that you have to purchase your own software and hardwareand hire your own team of developers and supporters just to create and maintainyour site big firms which are very frequently visited by customers wouldusually do this virtual hosting services VHS means that all the facilieties required such as the necessaryhard- and software, security, is provided and maintaned by another firm,for payment, of course. Usually it is a company specialised in providing VHS simplified e-commerce Here you just pay a company specialised in developing e-commercesystems to create a simple site for you. You must already have the necessaryhard- and software.
The basic functions of a simplified e-commerce systeminclude displaying a product catalogue, allowing users to browse through it andallowing them to buy items from it . Most of the B2C e-commerce companies use oneof these systems.
And there are too many who just implement the simplifiedsolution and forget about offering online customer support and help and evenkeeping the site up-to-date. A lack of customer support is only one of thereasons why e-commerce is in a crisis now. Trends for the futureAs you can see on the graph the purchase ratesare rising steadily. A recent study found out that most e-commerce websiteowners are generally optimistic.
Three-quarters say their online market isexpanding, while two-thirds say their ability to attract new customers isimproving.
Half of those polled say they are also seeing increased loyalty frompast customers.
So, as the customers get used to e-commerce, it becomes morepopular.
It may not replace the common way to buy and sell products but formost companies it offers new ways to reach their customers.E-Commerce Categories of E-Commerce Benefitsof E-Commercev lower transaction costsv availability v large quantity of information v providing up-to-date information v comparison of prices and productsv quicknessDisadvantagesof E-Commerce v hard to make yourself visible v hard to differ from competition v hard to make people buy somethingv moneyv legalityv ownershipv privacy and security ProductsPeople Buy via InternetConsumer Spending at European Sites 1997-2002.