What is E-commerce?
Electronic commerce or ecommerce is a term for any type of business, or commercial transaction, that involves the transfer of information across the Internet. It covers a range of different types of businesses, from consumer based retail sites, through auction or music sites, to business exchanges trading goods and services between corporations. It is currently one of the most important aspects of the Internet to emerge.
Ecommerce allows consumers to electronically exchange goods and services with no barriers of time or distance. Electronic commerce has expanded rapidly over the past five years and is predicted to continue at this rate, or even accelerate. In the near future the boundaries between "conventional" and "electronic" commerce will become increasingly blurred as more and more businesses move sections of their operations onto the Internet.
Business to Business or B2B refers to electronic commerce between businesses rather than between a business and a consumer. B2B businesses often deal with hundreds or even thousands of other businesses, either as customers or suppliers. Carrying out these transactions electronically provides vast competitive advantages over traditional methods. When implemented properly, ecommerce is often faster, cheaper and more convenient than the traditional methods of bartering goods and services.
Electronic transactions have been around for quite some time in the form of Electronic Data Interchange or EDI. EDI requires each supplier and customer to set up a dedicated data link (between them), where e-commerce provides a cost-effective method for companies to set up multiple, ad-hoc links. Electronic commerce has also led to the development of electronic marketplaces where suppliers and potential customers are brought together to conduct mutually beneficial trade.
The road to creating a successful online store can be a difficult if unaware of e-commerce principles and what ecommerce is supposed to do for your online business. Researching and understanding the guidelines required to properly implement an e-business plan is a crucial part to becoming successful with online store building.
What do you need to have an online store and what exactly is a shopping cart?
Shopping cart software is an operating system used to allow consumers to purchase goods and or services, track customers, and tie together all aspects of ecommerce into one cohesive whole. While there are many types of software that you can use, customizable, turnkey solutions are proven to be a cost effective method to build, edit and maintain an online store. How do online shopping carts differ from those found in a grocery store? The image is one of an invisible shopping cart. You enter an online store, see a product that fulfills your demand and you place it into your virtual shopping basket. When you are through browsing, you click checkout and complete the transaction by providing payment information.
To start an online business it is best to find a niche product that consumers have difficulty finding in malls or department stores. Also take shipping into consideration. Pets.com found out the hard way: dog food is expensive to ship FedEx! Then you need an ecommerce enabled website. This can either be a new site developed from scratch, or an existing site to which you can add ecommerce shopping cart capabilities.
The next step, you need a means of accepting online payments. This usually entails obtaining a merchant account and accepting credit cards through an online payment gateway (some smaller sites stick with simpler methods of accepting payments such as PayPal). Lastly, you need a marketing strategy for driving targeted traffic to your site and a means of enticing repeat customers. If you are new to ecommerce keep things simple- know your limitations. Ecommerce can be a very rewarding venture, but you cannot make money overnight. It is important to do a lot of research, ask questions, work hard and make on business decisions on facts learned from researching ecommerce. Don't rely on "gut" feelings. We hope our online ecommerce tutorial has helped your business make a better decision in choosing an online shopping cart for your ecommerce store.
Ecommerce (e-commerce) or electronic commerce, a subset of ebusiness, is the purchasing, selling, and exchanging of goods and services over computer networks (such as the Internet) through which transactions or terms of sale are performed electronically. Contrary to popular belief, ecommerce is not just on the Web. In fact, ecommerce was alive and well in business to business transactions before the Web back in the 70s via EDI (Electronic Data Interchange) through VANs (Value-Added Networks). Ecommerce can be broken into four main categories: B2B, B2C, C2B, and C2C.
B2B (Business-to-Business)
Companies doing business with each other such as manufacturers selling to distributors and wholesalers selling to retailers. Pricing is based on quantity of order and is often negotiable.
B2C (Business-to-Consumer)
Businesses selling to the general public typically through catalogs utilizing shopping cart software. By dollar volume, B2B takes the prize, however B2C is really what the average Joe has in mind with regards to ecommerce as a whole.
Having a hard time finding a book? Need to purchase a custom, high-end computer system? How about a first class, all-inclusive trip to a tropical island? With the advent ecommerce, all three things can be purchased literally in minutes without human interaction. Oh how far we've come!
C2B (Consumer-to-Business)
A consumer posts his project with a set budget online and within hours companies review the consumer's requirements and bid on the project. The consumer reviews the bids and selects the company that will complete the project. Elance empowers consumers around the world by providing the meeting ground and platform for such transactions.
C2C (Consumer-to-Consumer)
There are many sites offering free classifieds, auctions, and forums where individuals can buy and sell thanks to online payment systems like PayPal where people can send and receive money online with ease. eBay's auction service is a great example of where person-to-person transactions take place everyday since 1995.
Companies using internal networks to offer their employees products and services online--not necessarily online on the Web--are engaging in B2E (Business-to-Employee) ecommerce.
G2G (Government-to-Government), G2E (Government-to-Employee), G2B (Government-to-Business), B2G (Business-to-Government), G2C (Government-to-Citizen), C2G (Citizen-to-Government) are other forms of ecommerce that involve transactions with the government--from procurement to filing taxes to business registrations to renewing licenses. There are other categories of ecommerce out there, but they tend to be superfluous.
B2B - Business to Business
B2B is the selling between companies, wholesale rather than retail. But it means more than that. Efficient use of capital demands small inventories, which entails anticipating demand, and so maintaining detailed information flows between all parties involved in today's complex manufacturing processes. B2B involves widening the circle of suppliers (for safety and competition), and of centralizing control (for records and discounts).
B2B ecommerce is an important part of any online business. Leaving aside the simple transfer of funds — covered here — many businesses need some combination of:
creditworthiness assessment.
guarantee of quality and delivery of goods (escrow services).
safeguards against fraud.
fast collection of funds, with ability to vary the collection period.
reporting: approval of sale, invoicing, delivery, payment.
procedures to handle disputes.
Information of all types — corporate, technical, identity-building — has to be interchanged across the scattered divisions of large companies, and new ideas fostered, assessed and disseminated. Speed is vital, as are improved communication, collaboration, and customer understanding. All these requirements can be handled by IT, and software has been developed to meet the challenge — customer relationship management, enterprise resource planning, online auction, supply chain management, etc. Little of it is off-the-shelf, but is devised as systems to be extended and built round individual company requirements.
B2C - Business to Consumer
B2C (Business to Consumer): Refers to a business communicating with or selling to an individual rather than a company. B2C e-commerce jumped from $11.2 billion in 1998 to $31.2 billion in 1999,
Doing business online no longer requires a huge investment by retailers, thanks to developments in template-based online stores which are based on packaged applications that are delivered over the internet.
As nearly all online stores will require the same functions: catalogues, order baskets, payment processing, content management and member management, it makes sense for those components to be created once and shared by all stores, with each store effectively ‘renting’ its own copy of the applications.
The one area where it's important for online stores to differentiate is their look and feel, and naturally retailers feel very strongly about their business branding. So the ability to create a unique ‘skin’ for each site is an important part of a template-based e-store offering.
Using the latest internet application technology, individual sites can be created within minutes of the retailer selecting a template and supplying graphics such as logos. Typically, retailers will pay only a modest monthly rental charge – and retailers require no specialist hardware or software, other than internet access.
Anyone who wants to sell products and services over the internet, or who wants customers to be able to research their purchases on the internet, should consider an online store.
These days, a web site should be a standard part of the promotional and advertising mix for every business, along with other tools such as Yellow Pages, newspaper advertising and signage.
Advantages of B2C e-commerce
Shopping can be faster and more convenient.
Offerings and prices can change instantaneously.
Call centers can be integrated with the website.
Broadband telecommunications will enhance the buying experience.
Challenges faced by B2C e-commerce
The two main challenges faced by B2C e-commerce are building traffic and sustaining customer loyalty. Due to the winner-take-all nature of the B2C structure, many smaller firms find it difficult to enter a market and remain competitive. In addition, online shoppers are very price-sensitive and are easily lured away, so acquiring and keeping new customers is difficult.
B2E - Business to Employee
B2E (Business to Employee) E-Commerce generally refers to the requisitioning of supplies by employees for use in their jobs, but this really has grown to encompass much more. For example, B2E makes it very easy for an employee to requisition a new toner cartridge and printer paper - the order is entirely electronic, and supervisors are asked to approved the requisition in the event that the total order exceeds preset limits for that particular employee. However, B2E has grown into technologies that allow the employee to access their employee records to update address information, shift investments in the 401K plan, or maintain their internal resume. Many companies have found that B2E technologies have dramatically reduced the administrative burdens with the human resources department. Admittedly, maintaining employee information has little to do with commerce, but this term has grown to encapsulate this activity into the B2E definition.
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Creative Web Store makes your e-commerce transition easy by providing out-of-the-box integration with your accounting system, adaptability to the way you do business today, and flexible deployment options. And, of course, Creative Web Store offers all the customization features you expect from a premier Web store solution.
C2B - Consumer to Business
A consumer posts his project with a set budget online and within hours companies review the consumer's requirements and bid on the project. The consumer reviews the bids and selects the company that will complete the project. Elance empowers consumers around the world by providing the meeting ground and platform for such transactions
C2B is a rather peculiar Internet phenomenon. An example of C2B e-commerce could be the following. A student wants to fly from London to New York, but has only £200 ($320) in the bank to pay for this round trip. They put up an ad in an Internet C2B site, seeking airlines that are willing to offer the transatlantic round trip for £200 or less. The beauty of the Internet is that it brings together a large number of customers to create a marketplace that a number of airlines (that will have to otherwise fly with empty seats) will be interested in.
Many analysts state that C2B and C2C e-commerce will thrive in the near future. It is a challenging task, however, to construct these e-commerce systems because of their diverse nature. The existing EC construction tools, which usually focus on B2B and B2C e-commerce schemes, were designed for constructing specific e-commerce systems, making them unsuitable for developing consumer-initiated e-commerce systems. In this paper, we propose a trading model that supports C2B and C2C e-commerce through the use of digital media called “vouchers” and the trading system “VTS”. We show how the introduction of vouchers simplifies the procedures of C2B and C2C e-commerce, and show that vouchers, together with VTS, can be utilized to form a trading framework that uniformly realizes the delivery/payment phase. We demonstrate that a wide range of matching phase implementations, in which the characteristics of specific e-commerce systems such as market coordination are implemented, can be integrated into this framework.
C2C - Consumer to Consumer
The introduction of the new economy has helped to create a very individualistic and independent society. Consumers are no longer totally reliant on corporations and are increasingly looking to conduct their own business transactions. This is evident in Western Australia where the number of small businesses has doubled from 1983 to 1999 (Australian Bureau of Statistics, 2001). At the forefront of this movement are Consumer-to-Consumer (C2C) applications within eBusiness. C2C applications are any transactions between and amongst consumers (QUT School of International Business, 2003, p. xv). They are often described as Peer-to-Peer (P2P) (QUT School of International Business, 2003, p. xv). When eCommerce was first introduced, it redefined the traditional structure of business by giving small firms and individuals the same opportunity as multi-national corporations. As a result, many individuals established online organizations that encouraged and assisted commerce between consumers.
There are many sites offering free classifieds, auctions, and forums where individuals can buy and sell thanks to online payment systems like PayPal where people can send and receive money online with ease. eBay's auction service is a great example of where person-to-person transactions take place everyday since 1995.
Companies using internal networks to offer their employees products and services online--not necessarily online on the Web--are engaging in B2E (Business-to-Employee) ecommerce.
G2G (Government-to-Government), G2E (Government-to-Employee), G2B (Government-to-Business), B2G (Business-to-Government), G2C (Government-to-Citizen), C2G (Citizen-to-Government) are other forms of ecommerce that involve transactions with the government--from procurement to filing taxes to business registrations to renewing licenses. There are other categories of ecommerce out there, but they tend to be superfluous.
The most famous and successful example of a Consumer-to-Consumer application is Ebay. Ebay.com is an online auctioning site that facilitates the trade of privately owned items between individuals (May, 2000, p.109). The website claims that through Ebay, “practically anyone can trade practically anything� (Ebay, 1995-2004). The company began in September 1995 when Pierre Omidyar decided to establish the first online marketplace (Ebay, 1995-2004). Since that time, the company has continued to grow both in size and popularity. Ebay is now considered one of the most successful C2C eBusinesses ever.
Other examples of Consumer-to-Consumer applications are service and employment websites such as Monster.com, Seek.com.au and CareerOne.com.au. These websites provide a valuable service to consumers looking for jobs. Employers can advertise on these websites and potential employees can contact their organization for an interview.
Web-based communication organizations are one final example of a C2C operation. Sites such as Sastashopping.com ICQ.com and MSN.com act as a communications medium for peer-to-peer deliberations. Although there is no commercial benefit to the website, they do provide the facilities for Consumer-to-Consumer exchange.
Consumer-to-Consumer applications are a growing area of eCommerce. As online business expands, peer-to-peer transactions will continue to grow in popularity and the industry will become highly profitable.
