What is E-commerce?

Electronic commerce or e-commerce refers to a wide range of online business

activities for products and services. It also pertains to “any form of business
transaction in which the parties interact electronically rather than by physical
exchanges or direct physical contact.”
A more complete definition is: E-commerce is the use of electronic
communications and digital information processing technology in business
transactions to create, transform, and redefine relationships for value creation
between or among organizations, and between organizations and individuals.

E-business (electronic business) is the conduct of business

processes on the internet. These e-business processes include
buying and selling goods and services, servicing customers,
processing payments, managing production control, collaborating
with business partners, sharing information, running automated
employee services, recruiting; and more.

E-business can comprise a range of functions and services. They

range from the development of intranets and extranets to the
provision of e-services over the internet by application service
providers.

Advantages of Ecommerce
Faster buying/selling procedure, as well as easy to find products.
Buying/selling 24/7.
More reach to customers, there is no theoretical geographic limitations.
Low operational costs and better quality of services.
No need of physical company set-ups.
Easy to start and manage a business.
Customers can easily select products from different providers without moving around
physically.
Disadvantages of Ecommerce
Any one, good or bad, can easily start a business. And there are many bad sites which
eat up customers‘ money.
There is no guarantee of product quality.
Mechanical failures can cause unpredictable effects on the total processes.
As there is minimum chance of direct customer to company interactions, customer
loyalty is always on a check.
There are many hackers who look for opportunities, and thus an ecommerce site,
service, payment gateways; all are always prone to attack
Application of Electronic Commerce
Retail and wholesale:
E-commerce has a number of applications in retail and whole sale. E-retailing or
online
retailing is the selling of goods from Business-to-Consumer through electronic
stores
that are designed using the electronic catalogue and shopping cart model.
Cybermall is a single Website that offers different products and services at one
Internet location. It attracts the customer and the seller into one virtual space
through a Web
browser.

Marketing:
Another application e-commerce is marketing.Data collection about customer
behaviour, preferences, needs and buying patterns is possible through Web and
Ecommerce.
This helps marketing activities such as price fixation, negotiation, product feature
enhancement and relationship with the customer.
Finance:
Financial companies are using E-commerce to a large extent. Customers can check
the
balances of their savings and loan accounts, transfer money to their other account
and pay
their bill through on-line banking or E-banking.
Another application of E-commerce is on-line stock trading. Many Websites
provide
access to news, charts, information about company profile and analyst rating on the
stocks.
Manufacturing:
E-commerce is also used in the supply chain operations of a company. Some
companies form an electronic exchange by providing together buy and sell goods,
trade
market information and run back office information such as inventory control.
This speeds up the flow of raw material and finished goods among the members of
the business community.
Various issues related to the strategic and competitive issues limit the
implementation
of the business models. Companies may not trust their competitors and may fear
that they
will lose trade secrets if they participate in mass electronic exchanges.
Auctions:
Customer-to-Customer E-commerce is direct selling of goods and services among
customers. It also includes electronic auctions that involve bidding. Bidding is a
special type
of auction that allows prospective buyers to bid for an item.
For example, airline companies give the customer an opportunity to quote the price
for a seat on a specific route on the specified date and time.
Entertainment
E-Commerce application is widely used in entertainment area for video cataloging,
multiplayer games, and interactive ads and for online discussion.
Education
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In educational training also e-commerce has major role for interactive education,
video
conferencing, online class and for connecting different educational training centers.

FRAMEWORKS OF ELECTRONIC COMMERCE

E-Commerce is the smartest way of doing business. The framework is
comprised of three levels that this framework is needed to for successful
electronic commerce.
1. Infrastructure Communication: It is the first part of the
framework for
electronic commerce is including hardware, software, databases and
communications. It is used in term of World Wide Web on the Internet
or other
message switching way on the Internet or other telecommunication
networks.
2. Services: The second part of the framework include a wide range of
services
that provide the ability to find and in recent times of information and are
including the search for trading business partners, negotiation and
agreements
3. Products and Structures: This section of the electronic commerce
frameworks consist of forecasts and direct provision of goods, services
and
trade business related information to consumers and strategic business
partners,
cooperation, coordination and sharing of data and information inside and
outside the organization and organizing of environment of electronic
marketplace and supply chain and support services.

B2B BUSINESS-TO-BUSINESS
It is defined as E-commerce between any two companies. Business-to-Business
(B2B)
E-commerce, which deals with relationships among businesses that have two
primary
components, E-frastructure and E-market. E-frastructure is the architecture of B2B,
and E market refers to a Website where buyers and sellers interact with each other
and conduct transactions. Some of the application areas of B2B are supplier
management, inventory management, distribution management, channel
management and payment management.
Website following B2B business model sells its product to an intermediate buyer
who
then sells the product to the final customer. As an example, a wholesaler places an
order from a company's website and after receiving the consignment, sells the end
product to final customer who comes to buy the product at wholesaler's retail
outlet.

ADVANTAGES OF B2B
1. Improving and increasing the speed of communication.
2. Higher level of customer retention rates in business.
3. Higher transaction value and cost through business purchases.
4. Crystal clear structure and collaborative support shopping.
5. Opportunity to expand and start of new business.
6. Enhancement of brand knowledge through an additional channel.
7. Lesser consumer acquisition costs.
8. Change of business and market intelligence.
DISADVANTAGES OF B2B
1. Less barriers to entry for competitors.
2. Limited market opportunities.
3. Long purchase decision time.
4. Inverted power structure.
5. Adoption of Lengthy sales process.

Business-to-Consumer
It is defined as E-commerce between companies and consumers.
Business-to-
Customer (B2C) involves selling and buying of goods and services over
the Internet from Web retailers to Web customers. With B2C E-
commerce, the retailer sells the products and the services to unknown
and un-trusted strangers. Therefore, extra effort must be made to capture
customer and payment information. The most common application areas
of this type of E-commerce are purchasing product and information and
personal finance management.
In B2C model, business Website is a place where all transactions take
place between a business organization and consumer directly.
In B2C Model, a consumer goes to the website, selects a catalog, orders the catalog
and an email is sent to business organization. After receiving the order, goods will be
dispatched to the customer. Following are the key features of a B2C Model
Heavy advertisingsare required to attract large number of customers.
High investment in terms of hardware/software.
Support or good customer care service
Consumer Shopping Procedure
Following are the steps used in B2C e-commerce −
A consumer must
Determine the requirement.
Search available items on the website meeting the requirement.
Compares similar items for price, delivery date or any other terms.
Gives the order.
Pays the bill.
Receives the delivered item and review/inspect them.
Consults the vendor to get after service support or returns the product if not satisfied
with the delivered product.

ADVANTAGES OF B2C
1. Extensive search capabilities by item, corporate name, division name,
location, manufacturer, partner, price or any other specified needs.
2. Reduced marketing and advertising expenses to compete on equal
balance with much bigger companies; easily compete on quality, price
and availability of the products.
3. The internet gives customers get the new opportunity to browse and
shop at their place. They can access the services from home, office at any
time.
4. The internet allows the companies to reach people around the world,
offering many products to a global customer.
5. It has reduced inventory, employees, purchasing costs, order processing
costs associated with faxing, phone calls, and data entry, and even
eliminate physical stores.
6. Lesser transaction costs.

DISADVANTAGES OF B2C
1. The Consumer will only local point of view and limited to certain area
of operation.
2. With Increased cost regarding inventory, employees, purchasing costs
and order processing costs associated with faxing.
3. The sales or transaction may taking part indirectly or gone through third
party or other party.
4. It is needed staffs that give customer service and sales support service.
5. The list of products or services needs to regenerate every time when
there is some new information or items to add in.