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Electronic commerce, commonly known as e-commerce or eCommerce, or e-business 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 with widespread Internet usage. The use 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. Modern electronic commerce typically uses the World Wide Web at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as well. A large percentage of electronic commerce is conducted entirely electronically for virtual items such as access to premium content on a website, but most electronic commerce involves the transportation of physical items in some way. Online retailers are sometimes known as e-tailers and online retail is sometimes known as e-tail. Almost all big retailers have electronic commerce presence on the World Wide Web.
Features of E-Commerce
Ubiquity - In traditional commerce, a marketplace is a physical place we visit in order to transact. For example, television and radio are typically directed to motivating the customer to go someplace to make a purchase. E-commerce is ubiquitous, meaning that it is available just about everywhere at all times. It liberates the market from being restricted to a physical space and makes it possible to shop from your desktop. The result is called a market space. From consumer point of view, ubiquity reduces transaction costs - the cost of participating in a market. To transact, it is no longer necessary that you spend time and money traveling to a market. At a broader level, the ubiquity of e-commerce lowers the cognitive energy required to complete a task. Global Reach - E-commerce technology permits commercial transactions to cross cultural and national boundaries far more conveniently and effectively as compared to traditional commerce. As a result, the potential market size for e-commerce merchants is roughly equal to the size of world's online population. Universal Standards - One strikingly unusual feature of e-commerce technologies is that the technical standards of the Internet and therefore the technical standards for conducting e-commerce are universal standards i.e. they are shared by all the nations around the world. Interactivity - Unlike any of the commercial technologies of the twentieth century, with the possible exception of the telephone, e-commerce technologies are interactive, meaning they allow for two-way communication between merchants and consumer.
Information richness refers to the complexity and content of a message. Its function is no more or less than providing a virtual store. With the introduction of e-commerce business. cheaper and of higher quality. storage. customer service. It is the total amount and quality of information available to all market participants.The Internet vastly increase information density. communication and processing costs. communication has become effortless and has also changed a lot in recent years for the better. interests and past purchases. and transaction capabilities (including credit authorization. inventory and billing). information becomes plentiful. At the same time. All of the same processes that the merchant must have in place to support an in-store or catalog purchase must also be in place for an electronic purchase: product information. the electroniccommerce system must recreate or utilize existing data and business processes. the purpose of an electronic-commerce system is to enable that customer to locate and purchase a desired good or service over the Internet when the customer is interested in making the purchase. Merchants can change the product or service based on user's preferences or prior behavior.. It has also eased the customers with online shopping and easy transactions. Merchant's Perspective From a merchant's perspective. customer-service capability. Functions of E-CommerceCustomer's Perspective From a customer's perspective. Still. As a result. making information more useful and important than ever.E-commerce technologies permit personalization. there are people who think that conventional business practices are far better then the e-commerce business. In order for this to happen. inventory systems. the key function of an electronic-commerce system is to generate higher revenues than the merchant would achieve without the system. and shipping). are to help redefine and enhance an enterprise's brand strength. but it should be linked with other information technology (IT) systems that affect customer service (i. Merchants can target their marketing messages to specific individuals by adjusting the message to a person's name. Benefits and limitations of e-commerce E-commerce has revolutionized the concept of conducting business by providing equal chance to all the businesses to mark their global presence. and supply-chain effectiveness. financial settlement. Here. we are bringing you some of the . tax computation.e. related to revenue generation. The technology also permits customization. Ecommerce technologies reduce information collection. consumers and merchants. Personalization . An electronic-commerce system is one of the areas of an enterprise's infrastructure that is open to customers via the Web.Information Density and Richness . these technologies increase greatly the accuracy and timeliness of information. Additional functions of an electronic-commerce system.
If apt strategies are followed and technical issues are addressed properly. which in turn will assist you in developing efficient promotional strategy. Cost effective : . Lack of knowledge restricts large number of people from using the internet and understanding online transactions. Some people refuse to trust the legitimacy of online business and some are not comfortable about disclosing their personal and confidential information online. Round the clock availability :.The biggest limitation of e-commerce is that it is not suitable for perishable goods and food items. inventory management. customer care etc. consumers can search the specific product or service they require and can even find the direct manufacturer from where they can purchase products at comparatively less price.benefits and limitations of e-commerce that will make you aware of the certain aspects of this new trend of conducting business. as it still has not touched the lives of every individual. Not suitable for perishable commodities :. The major disadvantage of ecommerce is the limitation of the Internet. E-commerce caters to the demands of national as well as international business simultaneously and brings your business activities out of geographical boundaries. For purchasing such items people prefer the conventional way of shopping. even small businesses get the access to the global market.The foremost advantage of e-commerce is that it empowers the business to reach the global market. After evaluating the pros and cons of e-commerce. With e-commerce. Authenticity of e-commerce businesses has always remained in question. The time factor significantly turns into the increment in sales as well as profits. we can clearly state that the benefits of e-commerce are sufficient enough for overpowering the limitations. The present scenario . Benefits Expands the reach of your business to the global market :. you can easily build up the customers trust in your system.E-commerce is proved to be highly cost effective for business concerns as it cuts down the cost of marketing. Gives freedom to make choices :. You can also collect and manage the information related to the customers efficiently. Shopping online is time saving and convenient. In addition to it. It also reduces the burden of infrastructure required for conducting business. the time period also plays a significant role in delivering goods to the customers.E-commerce has abolished time restrictions on business activities because with this you can execute business transactions 24X7. you also get to see the reviews of other consumers that will help you in making beneficial purchase decision.The technological limitations of e-commerce have restricted a large number of people from using this revolutionizing technique. With e-commerce. Along with that. Customers may need to make lot of phone calls and e-mails for getting the products within the desired timeframe. processing. it becomes really troublesome to return the product or get refund in case if you are not satisfied with the product. Limitations Technological and inherent limitations :.It also gives customers an opportunity to look for cheaper and better quality products. Moreover.
sales managers. you would realize a lot of headache and problems reside within this area. A sales letter or a membership site can work for the business at any given time a day and in different time zones at any time of the day. The usage of software. There are many advantages for a traditional company to use the technology available to further enhance the profitability of their respective businesses. which needs to hire sales executive.of e-commerce can also be changed for good. If you’ve actually owned a traditional business before. Most offices can only operate within a certain period of time because one can only work so many productive hours a day. 4. There are e-commerce businesses being run on a shoe-string budget and raking in profits like a large enterprise. web designers and other staffs. The traditional business which requires location renting/purchasing. for example a website to sell your products or services. so that it can easily adapt to the ever changing needs of the customers as well as of the world. inventory. shipping and handling all sums up the high-cost equation which makes many people negate from starting a business entirely. The low-cost itself is a deciding factor that many individuals are learning how to operate this businesses on a home-based basis. Low-Cost Start-Up/Maintenance vs High Cost Start-Up/Maintenance The barriers of entry have allowed many individuals to start their own e-commerce business. Traditional Business vs E-Commerce Business 1. hardware and other technological devices has enabled a person who’s running an ecommerce business be “productive” 24 hours/ 7 days a week / 365 days a year unless their hosting server’s go down for unforeseeable circumstances. advertising. staff employment. Global Market vs Local Market The introduction of the Internet has leveled they playing field in business so to speak. Setting Your Own Hours vs Following Business Hours It is easy to identify that most traditional business operates at business hours because their employees have families to go home to and colleagues to hang out with after sun-down. Here are a few examples. 3. With the World Wide Web fast becoming a place where people buy and sell their respective products and services . accountants. 2. The e-commerce models uses more technology as leverage. Employees vs No Employees The most particular difference between is that an e-commerce business doesn’t need to have employee’s to function as opposed to the traditional business. an auto-responder to automatically sent out e-mails to targeted markets and forums to facilitate consumer and staff feedbacks.
Bill Gates once said “There will be only 2 types of business in the future. secured payment systems comes into operation to authorize and authenticate payment to seller. most businesses are being run by their owners on a daily basis which makes their income a Linear Income type. product configuration guidelines. The delivery system then take over to execute the delivery to customer. More advanced B2B model . earn a recurring commission/profit from the same customer over and over again. Internet Businesses and Those Out Of Business”. all at your finger-tips. The basis of a traditional business depends on the frequency of new and old customers buying from them to keep the business running. Imagine. it is becoming a heaven for business. Types of E-commerce: E-Commerce process model can be viewed in four ways and categories: 1. to find their business isn’t there. Residual Income vs Linear Income The benefits of e-commerce is there is a system in place which allows you to sell your to your customer once. With the advancement of e-commerce technology integrated with credit card processors. through multimedia clippings. if it wants to survive. buyer and seller are business organizations. and without additional effort. has to acquire a web presence if they want to continue surviving because.com). customer histories and so on. your competitors will. Then model works on similar line like B2C. They exchange technical & commercial through websites and portals. It’s a locked in mechanism which will help your customers make their payments easily each and every time their payment is due and allows you to earn a residual income without any effort. Some people leave their business and come back knowing it grew without them being there whilst some return. On placements of order. there are many competitors around to always try and succeed in getting your business away from you and your profits will suffer from it. Apart from that. C2B: Customer to Business Organisation 4. rest assured if you don’t. C2C: Customer to Customer In B2C Model. catalogues. 5. In B2B Model. business organization uses websites or portals to offer information about product.(ebay. A new customer interacts with the site and uses interactive order processing system for order placements. In any event. having access to millions of prospects. it has become imperative that any business. B2B: Business Organisation to Business 3. B2C: Business Organisation to Customer 2.
All that we will have to do is do right safety precautions when confronted with shopping on-line. both sides need to install the required software so that they can communicate on the common platform. m-Commerce . and manage progress. E. B2G may also include e-procurement services.Newspaper website is an Example of advertising and selling of goods to customer. Even the web design and development companies optimize the websites to be viewed correctly on mobile devices. and so forth. customer initiates actions after logging on to seller’s website or to server. E-Commerce application are present for the use of the customer. This type of e-commerce has quite low revenue generation as from the beginning it has been inclined to the free usage due to which it sometimes got entangled in cyber laws. Safety Precautions In Doing Business With E-Commerce E-commerce has actually provided ease to all the shoppers primarily in their effort and time.It refers to the use of mobile devices for conducting the transactions. Everything is now available on the web so any person of us can easily have the stuffs that we want by exploring the web site. in which businesses learn about the purchasing needs of agencies and agencies request proposal responses. country. To use this. Be fix in making use of merely one of your bank cards mainly the one with lower credit limit and never make use of ATM or debit cards. B2G may also include the rental of online applications and databases designed especially for use by government agencies. On the server of the selling organization. lots of cyber criminals in the present day have the ability to quickly acquire the information with regards to your debit cards resulting to a shocking increase in your debts. In this model. and so forth). For example. It is a technology in itself which helps people to directly share computer files and computer resources without having to go through a central web server. review plans. a Web site offering B2G services could provide businesses with a single place to locate applications and tax forms for one or more levels of governent (city. In spite of this. The entire Internet banking process work on C2B model where account holders of the bank transact a number of requirements such as seeking account balance.uses Extranet and Conducts business transaction based on the information status displayed on the buyer’s application server. Customer Participates in the process of selling and buying through the auction website. In C2B Model.Though it is an e-commerce model but it is more than that. In C2C model. The mobile device holders can contact each other and can conduct the business. payment and so on. . 1. website is used for personal advertising of products or services.the concept that businesses and government agencies can use central Web sites to exchange information and do business with each other more efficiently than they usually can off the Web. B2G may also support the idea of a virtual workplace in which a business and an agency could coordinate the work on a contracted project by sharing a common site to coordinate online meetings. state or province. B2G is business-to-government . request answers to specific questions. update corporate information. provide the ability to send in filled-out forms and payments. Peer to Peer (P2P) . It is simple to simply select the product which you prefer and thus pay for it thru your debit cards.
• • • Much less labor time is required Fewer errors occur because computer systems process the documents rather than processing by hand Business transactions flow faster. ANSI has approved a set of EDI standards known as the X12 standards. fewer out-ofstock occurrences and lower freight costs through fewer emergency expedites.With the implementation of EDI. saving time and reduced cost of business transaction and enabling the automatic processing of documents. Computer-to-computer exchange of information is much less expensive than handling paper documents. thus. One drawback to EDI is that companies must ensure that they have the resources in place to make an EDI program work. better use of warehouse space. there is no need for re-entering data. Overview of EDI benefits and drawbacks The EDI process provides many benefits. and trade information. the need for buying and hiring these resources or outsourcing them may be offset by the increased efficiency that EDI provides.Data security and control are maintained through out the transmission process using passwords. Advantages of EDI • Operation Lowering Operating Cost . Reduced Error and Increases Business Information Accuracy . user identification and encryption. however. EDI orders can take as little as one day. Paper purchase orders can take up to 10 days from the time the buyer prepares the order to when the supplier ships it. Increase Productivity .Making personnel more efficient and it improves business capabilities by speeding up throughput. Faster transactions support reduction in inventory levels.cohesive system within which all parties are able to electronically exchange data information within a set of protocols. . sell. Each re-entry of data is a potential source of error. Increase Security . reducing the risk for human error. EDI is becoming increasingly important as an easy mechanism for companies to buy.EDI replaces paper transactions with electronic transmissions. As more and more companies get connected to the Internet.
EDI facilitated financial processes and potential in providing faster reconciliation or elimination of tasks. Accounting . Disadvantges of EDI Too Many Standards There are too many standards bodies developing standard documents formats for EDI. The use of computers to obtains information is replacing the use of telephone and catalogues. This strengthen inter-company relationship.Improving delivery of services and goods by reducing order and delivery time and increase the reliability of meeting targets. auditing.. corporate buyers are now insisting their suppliers to conform to company performance criteria. With EDI. specification. Companies with EDI will certainly have an edge.etc. wastage being minimized.EDI can directly and indirectly helps organisations improve their inventory control. • Strategic Faster Trading Cycle . departments and regional offices are co-ordinate together. while your trading partner follows the EDIFACT standard format. customer have more accurate information on the progress of their orders.. stock in-and-out. Marketing Competitiveness . Improve Corporate Trading Relationship . Fast and accurate communications permits better management. making the entry of new competitors more difficult and gaining more new business opportunity. inventories are better managed. . buyer and customer can easily search for product description.Business units.. Many large.EDI allows faster and streamlining trading cycle between organisations leading to improved relationships between trading partners.With the use of EDI.. Fact and accurate permits better managing on stock balance. stock handling.Quality control has becoming a key thrust for progressive organisations. Better Quality Control . checking and improving cash flow.• Tactical Inventory Control . For example your company may be following the X12 standard format. prices and availability. Suppliers are given more specification. Distribution .
when we summaries the usage of the internet there are some common uses of the internet. This expense may be very costly for small companies. Browsing requires a skill of its own to be able to get the data on the topic one requires. they have to implement an EDI program." is a worldwide system of computer networks . information. While the internet is widely used by many. You may be using one version of the standard while your trading partners are still using older versions. The result of this is a limited group of people you can do business with. if they have permission. If a company wants to do business with these organizations. for various reasons as it is low cost. to meet different requirements. Communication is another area where the internet is used for frequently.a network of networks in which users at any one computer can. cracks. get information from any other computer Common uses of the internet. In fact one cannot go far in the internet without this basic activity done properly. sometimes called simply "the Net. For example Wal Mart is only doing business with other companies that use EDI. most standards bodies publish revisions to the standards. Browsing the internet is the most common use. Unit-4 Internet-The Internet. software's. chats. it has become very . This poses a problem to EDI users. effortless and fast. Communication takes place in the forms of emails. Limit Your Trading Partners Some large companies tend to stop doing business with companies who don't comply with EDI. EDI is Too Expensive Some companies are only doing business with others who use EDI.Changing Standards Each year. With the many open communication methods. video & chats and video conferences. Whether one browses for research purpose. news or to learn new things browsing is the commonest use of the internet. This in fact has become a very common past time for individuals.
Communication over the internet has reached great heights where now even interviews can be conducted online through video conferencing giving the same effects as real life interviews with no issues of being late or traveling to the venue of the interview. One good reason is that it takes only a fraction of the cost of advertising through other mediums like News paper and Television. so the consumers can talk with advertisers while seeing the advertisement and get more details and even purchase the item or get the service online itself. thus bringing in more demand resulting in more positive results than any other medium of marketing. within the tens of millions internet and email users. which is something which didn't exist in other traditional advertising mediums. Almost every site provides a blog page to make the consumers and internet users provide their honest views easily And the most recent but now a very common and frequent use of the internet is buying and selling over the internet. They find many useful things to learn on the internet(though with supervision). Job search: Nowadays. Also it has been found that it can reach a far greater crowd based on interest. .easy to meet new friends and pen pals to share common interests and exchange information. Research: Research papers are present online which helps in the researcher doing a literature review. Hobbies: Those who are having certain hobbies can try to improve on it by reading up on many aspects of their hobby. Because of its low production cost and flexibility one can change his/her ads quickly and as frequently as they require. people rely on internet for their education. EMarketing is very popular for many reasons. Internet marketing also provides for two-way communication. Online educational books have even reduced the need for a library. Another growing use of the internet is to build and take part in discussion forums as per interest and express one's ideas as and when and how ever he/she wants. many people search for their jobs online as it is quicker and there is a larger variety of job vacancies present. Studying: Now right from kinder garden children are exposed to internet and computers. Upto doctorate level education.
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