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E-Commerce By Danish Kanojia

Introduction

Commerce refers to all the activities the purchase and sales of goods or services.

Marketing, sales, payment, fulfillment, customer service. Commerce comprises the trading of something of economic value such as goods, services, information or money between two or more entities. Commerce functions as the central mechanism which drives capitalism and certain other economic systems (but compare command economy, for example).

Electronic commerce, commonly known as e-commerce or eCommerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown extraordinarily since the spread of the Internet. A wide variety of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems.

History

• 1970s: Electronic Funds Transfer (EFT)

–        Used by the banking industry to exchange account information over secured networks

• Late 1970s and early 1980s: Electronic Data Interchange (EDI) for e-commerce within companies

–        Used by businesses to transmit data from one business to another

• 1990s: the World Wide Web on the  Internet provides easy-to-use technology for information publishing and dissemination

–        Cheaper to do business (economies of scale)

–        Enable diverse business activities (economies of scope)

• 1994: Netscape released the Navigator browser in October under the code name Mozilla. Pizza Hut offered pizza ordering on its Web page. The first online bank opened. Attempts to offer flower delivery and magazine subscriptions online. Adult materials were also commercially available, as were cars and bikes. Netscape 1.0 in late 1994 introduced SSL encryption that made transactions secure.
• 1995: Jeff Bezos launched Amazon.com and the first commercial 24 hour, internet-only radio stations, Radio HK and NetRadio started broadcasting. Dell and Cisco began to aggressively use Internet for commercial transactions. eBay was founded by computer programmer Pierre Omidyar as AuctionWeb.
• 1998: Electronic postal stamps can be purchased and downloaded for printing from the Web.
• 1999: business.com was sold for US $7.5 million, which was purchased in 1997 for US $150,000. The peer-to-peer filesharing software Napster was launched.
• 2000: The dot-com bust.
• 2003: Amazon.com had its first year with a full year of profit

Applications

Some common Business applications related to electronic commerce are:

• E-mail and messaging
• Documents, spreadsheets, database
• Accounting and finance systems
• Orders and shipment information
• Enterprise and client information reporting
• Domestic and international payment systems

Some Other Applications are:

• Supply chain management
• Video on demand
• Remote banking
• Procurement and purchasing
• Online marketing and advertisement
• Home shopping
• Auctions

Government Regulations

In the United States, some electronic commerce activities are regulated by the Federal Trade Commission (FTC). These activities include the use of commercial e-mails, online advertising and consumer privacy. The CAN-SPAM Act of 2003 establishes national standards for direct marketing over e-mail. The Federal Trade Commission Act regulates all forms of advertising, including online advertising, and states that advertising must be truthful and non-deceptive.[3] Using its authority under Section 5 of the FTC Act, which prohibits unfair or deceptive practices, the FTC has brought a number of cases to enforce the promises in corporate privacy statements, including promises about the security of consumers' personal information.[4] As result, any corporate privacy policy related to e-commerce activity may be subject to enforcement by the FTC.

Types

Business to Consumer

One of the most common models in E-Commerce is the Business-To-Consumer (B2C) model. In B2C transactions, online transactions are made between businesses and individual consumers. Businesses sell products and services through electronic channels directly to the consumer.

Consumer to Consumer

Consumer-to-consumer (or C2C) electronic commerce involves the electronically-facilitated transactions between consumers through some third party. A common example is the online auction, in which a consumer posts an item for sale and other consumers bid to purchase it; the third party generally charges a flat fee or commission.

Consumer to Busines

Consumer-to-business (C2B ) is an electronic commerce business model in which consumers (individuals) offer products and services to companies and the companies pay them. This business model is a complete reversal of traditional business model where companies offer goods and services to consumers (business-to-consumer = B2C).

Business to Business

Business-to-business (B2B) is a term commonly used to describe electronic commerce transactions between businesses, as opposed to those between businesses and other groups, such as business and individual consumers (B2C) or business and government (B2G).

Building an ecommerce site

Creating Customized Shopping Cart :- Shopping Cart is like a store front where you can display your products, catalogue, price etc. The customer comes to your store through website and selects the item which he requires, after selection gets completed he will be shown with the total amount to be paid for the items he has selected. He would be given an option for paying through Credit Card and complete the transaction. Approaching Payment Gateway Service Provider :- Now the Payment Gateway Service Provider comes into picture who are authorized to accept credit card on behalf of merchant. It may be a Bank or Authorized Company who can accept and process credit card online. They Provide us with the payment gateway software that needs to be integrated with the website to enable secure transaction. The providers are been certified by Digital Certified Authorities like Verisign, Thwate etc which build trust among buyer and can transact safely. Integrating Payment Gateway with your Website :- This is very important part and the last stage of completing you e-presence. Some Team at Cyberweb Global Services Ltd will integrate the Payment Gateway software with your website to carry online transaction safely and securely.

Division of E commerce

E-tailing or The Virtual Storefront and the Virtual Mall

As a place for direct retail shopping, with its 24-hour availability, a global reach, the ability to interact and provide custom information and ordering, and multimedia prospects, the Web is rapidly becoming a multibillion dollar source of revenue for the world's businesses. A number of businesses already report considerable success. As early as the middle of 1997, Dell Computers reported orders of a million dollars a day. By early 1999, projected e-commerce revenues for business were in the billions of dollars and the stocks of companies deemed most adept at e-commerce were skyrocketing. Although many so-called dotcom retailers disappeared in the economic shakeout of 2000, Web retailing at sites such as Amazon.com, CDNow.com, and CompudataOnline.com continues to grow.

Market Research

In early 1999, it was widely recognized that because of the interactive nature of the Internet, companies could gather data about prospects and customers in unprecedented amounts -through site registration, questionnaires, and as part of taking orders. The issue of whether data was being collected with the knowledge and permission of market subjects had been raised. (Microsoft referred to its policy of data collection as "profiling" and a proposed standard has been developed that allows Internet users to decide who can have what personal information.)

Electronic Data Interchange (EDI)

EDI is the exchange of business data using an understood data format. It predates today's Internet. EDI involves data exchange among parties that know each other well and make arrangements for one-to-one (or point-to-point) connection, usually dial-up. EDI is expected to be replaced by one or more standard XML formats, such as ebXML.

E-Mail, Fax, and Internet Telephony

E-commerce is also conducted through the more limited electronic forms of communication called e-mail, facsimile or fax, and the emerging use of telephone calls over the Internet. Most of this is business-to-business, with some companies attempting to use e-mail and fax for unsolicited ads (usually viewed as online junk mail or spam) to consumers and other business prospects. An increasing number of business Web sites offer e-mail newsletters for subscribers. A new trend is opt-in e-mail in which Web users voluntarily sign up to receive e-mail, usually sponsored or containing ads, about product categories or other subjects they are interested in.

Business-to-Business Buying and Selling

Thousands of companies that sell products to other companies have discovered that the Web provides not only a 24-hour-a-day showcase for their products but a quick way to reach the right people in a company for more information.

The Security of Business Transactions

Security includes authenticating business transactors, controlling access to resources such as Web pages for registered or selected users, encrypting communications, and, in general, ensuring the privacy and effectiveness of transactions. Among the most widely-used security technologies is the Secure Sockets Layer (SSL), which is built into both of the leading Web browsers.

Advantages

• Increased sales: Reach narrow market segments in geographically dispersed locations, Create virtual communities.
• Decreased costs: Handling of sales inquiries, Providing price quotes, Determining product availability
• Being in the space

Unlimited Market Place and Business Access Which Extend Customer Base

• The Internet gives customers the opportunity to browse and shop at their convenience and at their place. They can access your services from home, office, or on the road, 24 hours a day, 7 days a week.
• The Internet allows you to reach people around the world, offering your products to a global customer base.

A 24 Hour Store Reduced Sale Cycle

• Reduce unnecessary phone calls and mailings.

Lower Cost of Doing Business

• Reduce inventory, employees, purchasing costs, order processing costs associated with faxing, phone calls, and data entry, and even eliminate physical stores. Reduce transaction costs.

Eliminate Middlemen

• Sell directly to your customers.

Easier Business Administration

Disadvantages

• Rapid developing pace of underlying technologies

• Difficult to calculate return on investment

• Cultural and legal impediments

• Loss of ability to inspect products from remote locations

Process

1. Attract customers

–        Advertising, marketing

1. Interact with customers

–        Catalog, negotiation

1. Handle and manage orders

–        Order capture

–        Payment

–        Transaction

–        Fulfillment (physical good, service good, digital good)

1. React to customer inquiries

–        Customer service

–        Order tracking

About the Author

Danish Kanojia a student of BCA from PCTE ludhiana.

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