Information Technology Internet

Introduction:

Information Technology has profoundly transformed business processes. Since the advent of the public Internet, e-commerce has become a new phase in the business world. The following essay first, emphasizes the development of e-commerce, followed by demonstrating the operation of e-commerce within electronic companies such as Amazon.com and Dell.com as well as analyzing their websites. Also, advantages and drawbacks of e-commerce in the business trend are being highlighted.

History of E-Commerce:

Sourced from Wikipedia, the free encyclopedia, "The meaning of electronic commerce has changed over the last 30 years. Originally, electronic commerce meant the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). The growth and acceptance of credit cards, automated teller machines (ATM) and telephone banking in the 1980s were forms of electronic commerce. From the 1990s onwards, electronic commerce would additionally include enterprise resource planning systems (ERP), data mining and data warehousing."[Ref1] "Although the Internet began to advance in popularity among the general public in 1994, it took approximately four years to develop the security protocols (for example, HTTP) and DSL which allowed rapid access and a persistent connection to the Internet. In 2000 a great number of business companies in the United States and Western Europe represented their services in the World Wide Web."[Ref2] "Today, Electronic commerce, commonly known as e-commerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks."[Ref1]

"Ecommerce has a great deal of advantages over “brick and mortar” stores and mail order catalogs. Consumers can easily search through a large database of products and services. They can see actual prices, build an order over several days and email it as a “wish list” hoping that someone will pay for their selected goods. Customers can compare prices with a click of the mouse and buy the selected product at best prices."[Ref2]

"Online vendors, in their turn, also get distinct advantages. The web and its search engines provide a way to be found by customers without expensive advertising campaign. Even small online shops can reach global markets. Web technology also allows to track customer preferences and to deliver individually-tailored marketing.

History of ecommerce is unthinkable without Amazon and EBay which were among the first Internet companies to allow electronic transactions. Thanks to their founders we now have a handsome ecommerce sector and enjoy the buying and selling advantages of the Internet. Currently there are 5 largest and most famous worldwide Internet retailers: Amazon, Dell, Staples, Office Depot and Hewlett Packard. According to statistics, the most popular categories of products sold in the World Wide Web are music, books, computers, office supplies and other consumer electronics."[Ref2]

In the next section, the operation and nature of electronic commerce is illustrated through two most popular and successful e-commerce companies and market makers: Amazon and Dell.

1. Amazon.com

"Amazon.com, Inc. is one of the most famous ecommerce companies and was founded in 1994 by Jeff Bezos and was one of the first American ecommerce companies to sell products over the Internet. After the dot-com collapse Amazon lost its position as a successful business model, however, in 2003 the company survived and made its first annual profit which was the first step to the further development. "Now the company is more than just surviving, it's made itself the undisputed leader of Internet commerce. Taking its cue from old and new ways of doing business, its model today has helped the company to grow into a multibillion-dollar business -- more important, one that can turn a profit."[Ref3] "At the outset Amazon.com was considered as an online bookstore, but in time it extended a variety of goods by adding electronics, software, DVDs, video games, music CDs, MP3s, apparel, footwear, health products, etc. Although the company's main headquarters is located in the USA, WA, Amazon has set up separate websites in other economically developed countries such as the United Kingdom, Canada, France, Germany, Japan, and China. The company supports and operates retail web sites for many famous businesses, including Marks & Spencer, Lacoste, the NBA, Bebe Stores, Target, etc. "

"The Marketplace gives you an opportunity to make contact with a customer. Using Amazon Marketplace, any person or business with an item to sell, new or used, can offer that item directly to Amazon customers alongside the same item offered by Amazon, while Amazon handles the credit card acceptance and approval process."[Ref4] Amazon .com has many considerable positive advantages such as being Fast and professional. This is due to the fact that people can find whatever they need. It's a well-planned, intuitive site, it almost always works and they make it easy for the customer to get what they want with desirable prices. Amazon provides its customers excellent services such as fast shipping of purchases; however, they sometimes could be expensive.

"Amazon is one of the first ecommerce businesses to establish an affiliate marketing program, and nowadays the company gets about 40% of its sales from affiliates and third party sellers who list and sell goods on the web site. In 2008 Amazon penetrated into the cinema and is currently sponsoring films.

According to the research conducted in 2008, the domain Amazon.com attracted about 615 million customers every year. The most popular feature of the web site is the review system, i.e. the ability for visitors to submit their reviews and rate any product on a rating scale from one to five stars. Amazon.com is also well-known for its clear and user-friendly advanced search facility which enables visitors to search for keywords in the full text of many books in the database."

2. Dell.com

"One more company which has contributed much to the process of ecommerce development is Dell Inc., an American company located in Texas, which stands third in computer sales within the industry behind Hewlett-Packard and Acer.

Launched in 1994 as a static page, Dell.com has made rapid strides, and by the end of 1997 was the first company to record a million dollars in online sales. The company's unique strategy of selling goods over the World Wide Web with no retail outlets and no middlemen has been admired by a lot of customers and imitated by a great number of ecommerce businesses. The key factor of Dell's success is that Dell.com enables customers to choose and to control, i.e. visitors can browse the site and assemble PCs piece by piece choosing each single component based on their budget and requirements. According to statistics, approximately half of the company's profit comes from the web site." [Ref2]

In 2007, Fortune magazine ranked Dell as the 34th-largest company in the Fortune 500 list and 8th on its annual Top 20 list of the most successful and admired companies in the USA in recognition of the company's business model.

Advantages and disadvantages of e-commerce

"Access the global marketplace: The Internet spans the world, and it is possible to do business with any business or person who is connected to the Internet. Simple local businesses such as specialist record stores are able to market and sell their offerings internationally using e-commerce. This global opportunity is assisted by the fact that, unlike traditional communications methods, users are not charged according to the distance over which they are communicating.

Speed: Electronic communications allow messages to traverse the world almost instantaneously. There is no need to wait weeks for a catalogue to arrive by post: that communications delay is not a part of the Internet / e-commerce world.

Opportunity to reduce costs. The Internet makes it very easy to 'shop around' for products and services that may be cheaper or more effective than we might otherwise settle for. It is sometimes possible to, through some online research, identify original manufacturers for some goods - thereby bypassing wholesalers and achieving a cheaper price.

Allowing customer self service and 'customer outsourcing'. People can interact with businesses at any hour of the day that it is convenient to them, and because these interactions are initiated by customers, the customers also provide a lot of the data for the transaction that may otherwise need to be entered by business staff. This means that some of the work and costs are effectively shifted to customers; this is referred to as 'customer outsourcing'.

On the other hand, conducting business in this manner has also several disadvantages which are briefly discussed below:

Time for delivery of physical products: It is possible to visit a local music store and walk out with a compact disc, or a bookstore and leave with a book. E-commerce is often used to buy goods that are not available locally from businesses all over the world, meaning that physical goods need to be delivered, which takes time and costs money. In some cases there are ways around this, for example, with electronic files of the music or books being accessed across the Internet, but then these are not physical goods.

Privacy, security, payment, identity, contract. Many issues arise - privacy of information, security of that information and payment details, whether or not payment details (e.g. credit card details) will be misused, identity theft, contract, and, whether we have one or not, what laws and legal jurisdiction apply.

Returning goods. Returning goods online can be an area of difficulty. The uncertainties surrounding the initial payment and delivery of goods can be exacerbated in this process. Will the goods get back to their source? Who pays for the return postage? Will the refund be paid? How long will it take?" [Ref5]

Conclusion

Through the preceding sections in this essay, different and outstanding dimensions of e-commerce were analyzed. Electronic commerce has become a fascinating aspect of the virtual world since nowadays companies, especially international ones, take advantage of the opportunities and services that e-commerce offers, in order to be profitable and successful. In the foreseeable future e-commerce will further confirm itself a major tool of sale. Successful e-commerce will become a notion absolutely inseparable from the web, because e-shopping is becoming more and more popular and natural. At the same time severe rivalry in the sphere of e-commerce services will intensify their development.

The ease of placing an order online has brought the buying public to Internet sales. The Internet continues to grow and boost facilities in electronic shopping and transactions satisfying customers' requirements. Therefore, the technology might change but the market will remain. The creator of this broad virtual world is the human, and must be careful to make a proper use of these technological facilities and build a secure foundation for the next generations.

References

1. Electronic commerce [cited 1th May 2008] - available from: http://en.wikipedia.org/wiki/e-commerce

2. History of e-commerce [cited 1th May 2008] http://www.ecommerce- land.com/history_ecommerce.html

3. History of Amazon.com- [cited 9th May 2008] available from: http://seattlepi.nwsource.com/business/158315_amazon28.html

4. Advantages of Amazon.com [cited 9th May 2008] available from: http://www.writing-world.com/promotion/amazon.shtml

5. Advantages of e-commerce [cited 9th May 2008] available from: http://www.marcbowles.com/sample_courses/amc/ec1/ec1_3.htm

6. e-commerce [cited 9th May 2008] - available from: http://www.letmeshop.com/Section_Home.asp?SID=29

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