E-COMMERCE E-commerce (or Electronic commerce) is a process of buying, selling, transferring, or exchanging products, services, and information over computers networks or internet through which transactions or terms of sale are performed electronically It consists of: Buyers: these are the people with money who want to purchase a good or service Sellers: these are the people who offer goods and services to buyers Producers: these are the people who create the products and services that sellers offer to buyers Modern electronic commerce typically uses the World Wide Web for at least one part of the transaction's life cycle although it may also use other technologies such as e-mail There are three areas of electric commerce: online retailing, electric markets, and online auctions E-commerce is supported by electronic business E-commerce is devided into categories (or Models): B2B E-commerce: is simply defined as e-commerce between companies About 80% of e-commerce is of this type Examples: Intel selling microprocessor to Dell, Heinz selling ketchup to Mc Donald… B2C E-commerce, or Business-to-consumer, or commerce between companies and consumers, involves customers gathering information; purchasing physical goods or receiving products over an electronic network Example: Dell selling a laptop to a customer… B2G E-commerce, or Business-to-government, or B2G is generally defined as commerce between companies and the public sector It refers to the use of the internet for public procurement, licensing procedures, and other government-related operations Example: Business pay taxes, file reports, or sell goods and services to Government agencies C2C E-commerce, or Consumer-to-consumer, is simply commerce between private individuals or consumers Examples: Mary buying an iPod from Tom on eBay, me selling a car to my neighbour… G2C E-commerce, Government-to-consumer, is also a part of egovernance The objective is to provide good and effective services to each citizen The Government provides the following facilities to the citizens through website: information of all government departments, different welfare schemes, and different application forms to be used by citizens G2B E-commerce, Government-to-business, is a business model that refers to government providing services or information to business organisation Government uses B2G Model website to approach business organizations Such websites support auctions, tenders and application submission functionalities THE PROCESS OF E-COMMERCE Order placed by user Shopping cart Order is completed Shipment Warehouse A consumer uses Web browser to connect to the home page of a merchant’s Web site on the internet She browses the catalog of products featured on the site and selects items to purchase The selected items are placed in the electronic equivalent of a shopping cart When the purchase of selected items is ready to be completed, she provides a bill-to and ship-to address for purchase and delivery When the credit card number is validated and the order is completed at the merchant’s site displays a receipt confirming the customer’s purchase The Commerce Server site then forwards the order to a Processing Network for payment processing and fulfilment FEATURES OF E-COMMERCE Ubiquity and Global Reach and Universal Standards There are seven basic features of e-commerce The first three relate to the global nature of the e-commerce environment Ubiquity means that the commercial transaction or activity is available at anytime from anywhere in the world Global reach is the number of potential consumers a business can reach; this means high levels of global Internet connectivity Universal standards means that e-commerce operates on standard platforms with agreed methods and systems Richness and Interactivity Richness and interactivity refer to the content available on the e-commerce platform and how it used by the consumer Richness means the commercial activity and experience is conducted through a variety of messages and means, such as videos, text, pictures, sound, links, SMS and more Interactivity is the relationship a consumer has with this richness - similar to a face-to-face customer meeting in a traditional business Information Density Information density relates to the technological capabilities of e-commerce, in that vast amounts of information can be stored and made accessible very cheaply and without the need for bulky storage In e-commerce banking, a customer can have access to a vast array of personal records and the bank can store huge amounts of information as well Personalization E-commerce takes personalized selling and marketing to a new level because of the level of information-gathering and interaction and engagement a consumer has online Products and messages can be personally targeted in a much more efficient way, saving a lot of wasted time and boosting the potential for sales ADVANTAGE OF E-COMMERCE Low Financial Cost One of the e-commerce benefits is that it has a lower startup cost Physical retail stores have to pay up to thousands of dollar to rent one of their store locations Also, they have several upfront costs such as store signs, store design, buying inventory, sales equipment, and more Physical retail stores also have to pay staff to work and run each location They may also need to hire security staff depending on the product value in the store 24/7 Potential Income One of the advantages of e-commerce is that online stores are always open for business With your Facebook ads, you can attract someone at 11 p.m or a.m Most physical location stores are open between a.m to p.m By being available at all hours, you can attract people who would normally pick up a product in stores, if the store were open You can also attract those who may have odd work schedules or who don’t have time to shop in-person Sell Internationally Next on the list of ecommerce benefits is that a new brand can sell to customers around the world easily You have the ability to discover your audience whether they’re in the UK, South America, or neighboring countries Affordable employees You can choose to outsource work to virtual assistants in countries where the cost of living is much lower You’ll need fewer employees in an e-commerce business than a retail location A huge advantage of e-commerce is that you don’t need to hire employees at launch You can start and run an e-commerce business all by yourself Easier to Encourage Impulse Buy If you have an attractive product photography, one with vibrant color or human emotion, you can create ads that drive impulse buys You can also execute a range of scarcity tactics such as countdown timers or showcasing limited quantities Customers Get a Less Invasive Experience Some people dread walking into a brick and mortar store as they’re forced to interact with the store’s employees Whether learning about a sales promotion or being asked questions throughout the shopping experience, some may prefer online shopping as it can be a little less invasive making it one of the best benefits of ecommerce If a customer wants to contact the store owner, they can click on a live chat feature, email or send a Facebook message Able to Process a High Number of Orders As your business continues to grow, you might choose to hire employees to help with order processing In retail stores, long line ups can deter people from shopping With e-commerce, there’s no waiting time A customer can place orders on his or her own schedule with no delays allowing you to accept a high number of orders DISADVANTAGE OF E-COMMERCE E-commerce Does Not Allow You to Experience the Product Before Purchase You cannot touch the fabric of the garment you want to buy You cannot check how the shoe feels on your feet You cannot test the perfume that you want to buy In many cases, customers want to experience the product before purchase Ecommerce does not allow that If you buy a music system, you cannot play it online to check if it sounds right E-commerce Delays Goods Unless you are using a website to order a pizza, e-commerce website delivery takes a lot longer to get the goods into your hands Even with express shipping, the earliest you get goods is usually "tomorrow" (except for some Amazon services) But if you want to buy a pen because you need to write something right now, you cannot buy it off an e-commerce website Likewise, with candy that you want to eat now, a book that you want to read tonight Many Goods Cannot Be Purchased Online Despite its many conveniences, there are goods that you cannot buy online Most of these would be in the categories of "perishable" or "odd-sized." For example, you cannot order an ice cream or a dining table set Unless the seller was willing to make a huge loss, the cost of shipping that popsicle would far exceed the cost of the popsicle Likewise, a dining table set can certainly be purchased online In some cases, the cost of logistics is bearable But if you have to return the furniture, you will get well-acquainted with the inconvenience of e-commerce Anyone Can Set Up an e-Commerce Website We live in an era where online storefront providers bring you the ability to set up an e-commerce store within minutes I have tried it, and it is possible to set up a basic store in under 10 minutes But if anybody can set up a store, how I know that the store I am purchasing from is genuine? The lowered barriers to entry might be a great attraction to the aspiring ecommerce entrepreneur But for the buyer, reliability can be an issue It could lead customers to restrict their online purchases to famous e-commerce websites Security When making an online purchase, you have to provide at least your credit card information and mailing address In many cases, e-commerce websites can harvest other information about your online behavior and preferences It could lead to credit card fraud, or worse, identity theft PROBLEMS WHEN WE BUY ON THE INTERNET Online shopping - that glorious invention which allows people to buy things from the comfort of their homes No more travelling to multiple stores to find the right product; no more having to deal with over-enthusiastic sales persons; no more standing in long lines at the checkout counter The e-commerce boom has certainly changed the way we shop for the better But, like everything else, the world of online shopping is not all roses Despite all the efforts of ecommerce companies to alleviate them, there are a few problems that customers still have to face while shopping online Six of these problems are listed below Quality issues The biggest problem while buying things online is that you have no guarantee of a product's quality Reviews are not always reliable and all the research can't assure you of a product's quality; fraudulent sellers who intentionally mislead customers to increase sales are the prime reason for faulty products being sold online With the volume of goods e-commerce companies handle these days, it can be quite difficult for them to conduct quality checks on each and every one of the products they're selling Additionally, the issue of getting the correct size remains a serious drawback for buying clothing and footwear online Sizes vary from brand to brand, and since you can't try out the products before buying them, selecting the size is always a gamble Delivery and logistics One predicament that constantly turns up while shopping online is when the order will be delivered Delivery personnel often turn up at our homes when we're at work or out somewhere as there's no way to fix a particular time slot for the delivery to take place This same issue exists while returning products Another problem is that the vast majority of the Indian population which lives in rural areas and Tier-III cities is unable to shop online because not all ecommerce sites provide delivery services to their locations Lack of full cost disclosure The lack of full cost disclosure may also be problematic While it may be easy to compare the base price of an item online, it may not be easy to see the total cost up front Additional fees such as shipping are often not visible until the final step in the checkout process The problem is especially evident with crossborder purchases, where the cost indicated at the final checkout screen may not include additional fees that must be paid upon delivery such as duties and brokerage Some services such as the Canadian-based Wishabi attempts to include estimates of these additional cost, but nevertheless, the lack of general full cost disclosure remains a concern Privacy Privacy of personal information is a significant issue for some consumers Many consumers wish to avoid spam and telemarketing which could result from supplying contact information to an online merchant In response, many merchants promise to not use consumer information for these purposes Many websites keep track of consumer shopping habits in order to suggest items and other websites to view Brick-and-mortar stores also collect consumer information Some ask for a shopper's address and phone number at checkout, though consumers may refuse to provide it Many larger stores use the address information encoded on consumers' credit cards (often without their knowledge) to add them to a catalog mailing list This information is obviously not accessible to the merchant when paying in cash or through a bank (money transfer, in which case there is also proof of payment) Additional charges How many times has it happened that you've spotted a great deal on a product and when you're one click away from purchasing it you noticed an additional shipping charge This is commonplace on all e-commerce sites when your order amount isn't high enough to qualify for free shipping And even when it is, sometimes these shipping charges are added on each individual product (if you're buying multiple products of course) and not the collective order Unclear return and guarantee policies Since you have no idea of product's quality until you hold it in your hands, returning things bought online is quite common Unless you're buying from one of the established e-commerce companies, it's important to go through the return policy while making a purchase But most sites have vague return policies that can leave you with a low-quality product and no way to return it The same applies for guarantees, as most sites don't clearly mention what the policy is for a product and then refuse to carry out replacements if you receive a damaged product HOW TO SUCCEED IN DOING ONLINE BUSINESS We are in a connected world today The internet, along with smart phones, has changed the way business is done Here are some ways to run a successful online business: Organize Your Web Assets Your web assets are everything from your website to your social media profiles to your hosting account These need to be in order All relevant assets should be optimized for your brand For example, your social media and webpages should have the relevant keywords They should fall into an integrated marketing plan And they should be completely updated with the latest information about your company Maintain Customer Records Safely One problem business owners have is that they need to be able to keep records safely You have a legal obligation to protect any customer information obtained online For example, you should store information on separate devices and have a number of secure backups Your systems must be kept updated and controls should be implemented and access should be restricted only to specific employees You should have a system in place to destroy things like credit card details securely when they’re no longer needed Be aware of your competitors Any good business will know its competitors You need to know who you’re competing against so that you know why customers choose you over others, or vice versa Nowhere is this more important than in the online world You should be aware of social media channels your competition is using And you should inspect keyword usage from all your competitors using the variety of tools Google provides Protect Your Brand’s Online Reputation Online business is all about reputation The slightest mistake can taint your brand forever Setup a Google Alerts notification for your brand That way, you’ll be able to inspect any mention of your brand Have a firm set of branding and social media guidelines, so anyone posting on behalf of your brand is aware of what you expect from them Learn to deal with customer complaints and adopt a mindset of solving problems; even if the customer is wrong Invest on a good internet connection If you are online, you need a good internet connection Sometimes, I’ve sacrificed on a good internet connection, only to realize I couldn’t act fast on important orders Without a fast internet connection, you could miss out on orders and customer questions In short, your business could be paralyzed Stay On Top of the Latest Trends The online world is one that is constantly changing and evolving It evolves faster than anything you’ll see in the real world Furthermore, you’ll see social media trends evolving all the time You need to be on top of this so you can be on the cutting edge of online marketing and branding Know When to Call It Quits Sometimes an idea will fail The biggest challenge for an entrepreneur is to know when an idea has failed It’s no point trying to revive a dead duck So don’t be scared to change course if necessary ... fulfilment FEATURES OF E-COMMERCE Ubiquity and Global Reach and Universal Standards There are seven basic features of e-commerce The first three relate to the global nature of the e-commerce environment... fewer employees in an e-commerce business than a retail location A huge advantage of e-commerce is that you don’t need to hire employees at launch You can start and run an e-commerce business all... With e-commerce, there’s no waiting time A customer can place orders on his or her own schedule with no delays allowing you to accept a high number of orders DISADVANTAGE OF E-COMMERCE E-commerce