What is E-Commerce



• E-Commerce will replace traditional off-line Business.
• E-Commerce is the way forward for Business and Organisation.

1.0 Introduction of E-Commerce

E-commerce, we can define as the online transaction of business, featuring linked computer systems of the vendor, host, and buyer. Electronic commerce involves the transfer of ownership to use a good or service. Most people are familiar with business-to-consumer electronic business (B2C).

We can also define as Business activities conducted using electronic data transmission via Internet & worldwide web.

E commerce is buying and selling of information, products and services via computer networks today and in the future, using any one of the myriad of networks that make up internet.

E-commerce occurs when one business transmits computer readable data in a standard format to another business, business realized that many of documents they exchanged related to shopping of goods, such as invoices, purchase orders and bills of lading and included the same set of information for almost every transaction. They also realize that they were spending a good deal of time and money entering these data into their computers, printing paper forms and then re-entering the data on the other side of transaction. E-Commerce is the process used to distribute, buy, sell or market goods and services, and the transfer of funds online, through electronic communications or networks.

2.0 E-Commerce Development

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Online selling goods and services is the natural progression for almost all companies that are looking to expand their business in to whole world. There is no other method to reach more customers that is more cost-effective than an e-commerce. As you know, this model has been so successful that some businesses (e.g. Amazon.com and e Bay) have even forgone a physical location. While their situations stand out from the rest, even existing "bricks-and-mortar" businesses can benefit from selling online

One of the keys to ensuring success with your e commerce is to make it robust enough to meet the needs of your customers while simple enough so that they don't need a manual to figure out how to buy something. Typically this means having a searchable catalogue and a minimal number of clicks to get from the product page to the order page.

I prefer to work closely with you to figure out exactly what your businesses needs are. This process is iterative and provides flexibility to adjust to changing needs, while being structured enough so that there are no surprises in the finished product.

Elements of E-Commerce

• Consuming shopping on the web called Business to Consumer (B2C).
• Transaction conducted between Business on the web is called Business-to-Business (B2B).
• Transaction and business processes that support selling and purchasing activities on web.

3 E-commerce applications

3.1 Supply chain management

Before looking the wide range of variety of e-commerce application areas that have flourished over the last decade in more detail, it is worth looking at one which may not be familiar to a reader, but which saves companies huge amounts of resources. The application involves a supply chain. A supply chain is a set of relationships between a number of companies who having the symbiotic relationship with each other in that one company supplies commodities or services to another companies which, in turn, supply commodities or services to another companies, and so on.

The following example was originally described by Kalakota and Robinson (1999) in their excellent management introduction to e-commerce. It concerns the processes involved in getting a bottle of Listerine mouthwash to the shelves of a retail chemist. It consists of the following steps:

• In Australia a farmer sells his or her eucalyptus crop to a processing company that extracts the eucalyptus oil from the leaves.
• The oil is then sold to a distributor in New Jersey.
• At the same time as the eucalyptus oil is being extracted natural gas is being drilled in the Saudi Arabian desert in order to produce the alcohol that is added to the raw ingredients of the mouthwash.
• Union Carbide ships the alcohol to Texas City, Texas, where the company that manufactures the mouthwash (Warner Lambert) has its factory.
• Farmers in the mid-west of America grow corn which is used in the manufacture of Sorbitol which both sweetens and adds bulk to the mouthwash. This is harvested and sent to the factory in Texas City.
• The ingredients are mixed and the mouthwash manufactured.
• The final bottles of mouthwash are sent to wholesalers or to the warehouses of chains of chemists from where they are distributed to individual retail outlets.

3.2 E-tailing

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The next example is probably the one that you expected me to introduce first: that of selling goods over the internet. However, I deliberately introduced supply chain management first since it is an area where companies are making huge savings in their investment in internet technology. The investments in retailing using the internet (e-tailing) are only gradually being realised.

The archetypal e-tailing application is that of a bookseller such as Amazon. This company is renowned for the fact that it only sells books over the internet and doesn't even take telephone orders. It has one of the best-organised websites and is continually referred to by journalists as an e-commerce success story.

Customers of Amazon interact with its website and carry out a number of functions including:

• Browsing readers' reviews of books;
• Reading feature articles about books and authors similar to those found in magazines and newspapers;
• Searching for details of a book based on information such as the author's name or the title of the book;
• Browsing the books which are the Amazon bestsellers;
• Ordering books using credit cards or some other similar payment method;
• Tracking the progress of an order.

Behind the scenes of the Amazon site are a number of conventional functions, which are found in all retailing applications, these include:

• Stock management: keeping track of what books are in stock and ordering titles when stocks become low;
• Payment management: paying suppliers of books for those that have been delivered;
• Customer payment management: keeping track of payments made by customers and of payments made by credit card companies and banks which correspond to the customer payments;
• Market analysis: the process of analysing sales in order to determine what books to order and which to discount in the future. This analysis occurs at both the customer level and at a temporal level in that customer preferences are processed and the times and dates when they express these preferences are analysed; for example, in order to answer questions such as what books sell well at Christmas or at Easter?

3.3 Procurement

This is used to describe the purchase of goods and services, which are not directly used in the main business of a company. For example, a car manufacturer will procure stationery for its employees or procure training courses for them to attend in order to improve their skills.

A typical conventional procurement process consists of a number of steps:

• The person making the procurement expresses their need by typing in details of a requisition using either a computer-based or paper-based form;
• The form is then dispatched to a member of staff who checks that it has been filled in correctly, that the amount is no larger than the amount that they are able to authorise and that there are sufficient funds available for purchase;
• If the form is authorised then it is sent on to a member of staff who is concerned with the purchasing of the good or service that is required; they then fill in a purchase requisition and send it off to the company who supplies the item that is to be purchased. If the item is over the limit for authorisation, then it is sent to someone who can authorise greater amounts.

This is in contrast to an e-procurement system which would automatically take the form produced by the person making the procurement, check that it satisfies all the company rules for procuring the item that is required, carry out authorisation if it is below a certain limit or send the form to someone who can carry out authorisation and then log the purchaser into the site of the supplier. He or she is then able to use this site to make the purchase, quoting an automatically generated procurement requisition number.

Again this is not hugely different to a conventional automated procurement system; however, it does cut out a number of inefficiencies at the purchase requisition end by virtue of the fact that the purchaser of a good or service is able to interact directly via the internet with the supplier. With procurement consuming as much as 10 per cent of a company's resources some large savings can be made by such an utilisation of e-commerce-based technology. Another example of the myth detailed in the previous section.

3.4 Auction sites

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These are sites on the web, which run conventional auctions. There are two types of auction: those that are carried out in real time, where participants log in to an auction site using a browser at a specified time and bid for an article until the highest price is reached and no other bids are forthcoming. The other type of site - and the most common - is where an item is offered for sale and a date advertised after which no more bids are accepted. Such sites make a profit from two sources: first they usually charge a commission on the items that are sold and, second, they display adverts, which are viewed by visitors to the site. The auction site will then receive some fee for displaying the advert, a further fee if a visitor clicks on an advert and it takes them to the advertiser's website and another fee if they purchase something from this site. Again, this is just an online analogue of a conventional business.

3.5 Other commercial websites

So far I have detailed e-commerce applications, which are connected with very large organisations; to conclude this section it is worth looking at a number of smaller applications, many of which are distinguished by the fact that they are novel. They are in contrast to the applications discussed in previous subsections, which mainly consist of standard functions such as order processing.

3.5.1 Anonymous remailers

An anonymous remailer is a website which enables you to send an email anonymously to some recipient. The main reason for this is to do with something known as spam. This term describes unsolicited email which tries to sell the recipient something.

3.5.2 Link checking sites

The World Wide Web contains millions of web pages. Many of these pages are impossible to read, even though many existing web pages will reference them. It is also the telephone area code for Atlanta in the United States; you will occasionally hear technical staff referring to non-existent web documents as having ‘gone to Atlanta'.

There are two main reasons why a web document disappears from the World Wide Web:

• The developer or company might have deleted it, for example the company associated with the site has filed for bankruptcy or the individual who developed the site has moved it to another computer.
• The second reason is that the computer holding the web document is currently malfunctioning or has been switched off.

A link checking site is one to which you submit the address of a web page; it will store this address in a database and will then periodically check that the document is still accessible. If it discovers that a document is no longer available then it will email the customer who asked for the site to keep an eye on the document.

This is the type of service that technical staff who look after a collection of web documents find valuable; such staff, often known as webmasters, need to know very quickly when this happens. For example, the page that is no longer accessible could be the home page for a company that sells some goods through the internet: having web documents unavailable means that it effectively shuts the front door of the store to customers. Because speed in this case is essential a number of link checking sites offer webmasters a notification service via a customer's portable phone or pager.

3.5.3 Archive sites

These are websites, which offer customers a facility for storing their files at a safe location. These guards against anything-disastrous happening to the customer's computer and their losing valuable data. Often the files will be duplicated at a number of computers at different locations in order to guard against the possibility of one of the locations being affected by a natural disaster such as an earthquake, or a computer being affected by a catastrophic failure which results in its stored data being destroyed. The user of such a site usually registers with it using a name and a password; they are then presented with a set of instructions, which take them through the process of collecting their files together to send to the remote location.

3.5.4 Change notification sites

These sites are a variation on link checking sites. Here, the customer is notified not when a web document becomes unavailable, but when the document is changed. For example, the customer might be interested in a particular page which advertises some holiday package offers to a particular destination and wants to keep abreast of any changes to the page which might signal the fact that a new improved offer has been added.

3.5.5 Email providers

These are sites, which provide free email facilities; often they provide other facilities such as sending anonymous mail and constructing mailing lists. Such sites are valuable to users who are too impecunious to be able to afford conventional mailing software and to frequent travellers who can access such sites anywhere in the world. Their main disadvantage is that they tend to be slow compared with conventional mailing utilities such as Microsoft Outlook and Eudora.

4.0 Conclusion

An online presence for a business is a powerful business opportunity, an implausible source of cost-efficiency, an environmental friendly way to work, and became essential for today's business success. Online businesses have a potential advantage to choose the whole world as target market. Online business for global market has no restrictions or boundaries for operating the business. The market is expanding because customers are demanding more services online. People all over the world can gain advantages of doing business online. It can have wider consumer base locally and internationally. As soon as a website is launched, the company starts working 24/7 for their customers. Company can meet the expectation of thousands of customers at a time. In online business, customers not only can visit the website but also can place their orders at any time. No specific timings of business are followed and the business operations will never close in between any two days. With the help of Internet, business operations can be carried out from their workplace time flexibility.

5.0 References

Electronic commerce by Gary P Schneider, James T Perry 2nd Annual edition pg no. 3

Internet commerce digital models for business by Elaine Lawrence, brain corbitt, jo-anne fisher, john Lawrence, Alan Tidwell 2nd edition pg no 3

http://www.export.gov/sellingonline/whatisecommerce.asp dated 24/9/09

http://www.thehindubusinessline.com/businessline/iw/2000/05/28/stories/28g101c1.htm dated: - 2/10/09

http://openlearn.open.ac.uk/mod/resource/view.php?id=197549 dated. 26/9/09

http://www.articlepool.com/advantages+of+online+business+over+offline+business-76738 dated 3/10/09.

http://www.bignews.biz/?id=817452&keys=deign-hosting-service-web dated 15/10/09/