E-commerce

From Isopedia

1 Technical Information
2 Historical Information
3 References
4 Team Members

Technical Information

E-Commerce Defined

E-Commerce (Electronic Commerce) contains primarily the use of distributing, buying, selling, and marketing of products or services through electronic systems such as the internet (and other types of computer networks). In general, E-Commerce levels the field for small businesses by giving them the ability to market their products and services nationwide. Also, E-Commerce offers an inexpensive alternative for advertising and marketing products, services, and functions through a low cost, high impact channel for businesses. The Information Technology industry most likely sees E-commerce as an electronic business application aimed at commercial transactions. These can include electronic funds transfer, supply chain management, e-marketing, online marketing, online transaction processing, electronic data interchange, automated inventory management systems, and automated data-collection systems. It normally uses electronic communications technology such as the internet, extranets, e-mail, e-books, databases, and mobile phones.

E-Commerce vs. E-Business

Based upon the definition above, E-commerce consists of the direct financial business transactions of buying and selling over the internet. E-business, on the other hand, deals with more than the online financial transactions between customers and businiesses. E-business consists of not only E-commerce, but the servicing of customers and collaboration deals with other businesses. In conclusion, E-commerce is simply a component to E-business.

E-Commerce: Online and Automated

It is important to note how E-commerce demands that all the aspects of a business sale are both automated and on-screen. Customers need to be able to view any product, its details, options, pricing, availability and also have a way to place an order. E-commerce's solution for these demands include extensive databases and the creation of online "templates." Templates allow for thousands of products to be visible on one webpage instead of thousands of webpages needing to be produced for thousands of products (like in an ordinary print order catalog). These templates contain empty spaces and each space is designated to show information such as the product's picture, description, price, etc. All of this product information is filled in from the database that the company has created regarding all of their products.

After the consumer has found their desired product they must inform the company of their order, but how? E-commerce introduced "shopping carts," or "shopping baskets," where the consumer can hold a product's identification number. Shopping carts are a special part of temporary computer memory and are created for each individual customer. It is only after the customer proceeds to check out that the customer's shopping cart, order information, and shipping information is transferred to permanent placement in the company's database. After this point, there are many different types of payment and shipping options that are completed using secured technologies such as e-cash or credit card.

In most cases, an E-Commerce company will continue to exist not only on the basis of its product, but having a well-organized business structure and a secure, well-designed website. Factors include:

1.Providing an easy and secure way for customers to order.
2.Providing reliability and security
3.Providing an all around view of the customer relationship, distinct as ensuring that all employees, suppliers, and partners have a complete view, that corresponds with that of the customer.
4.Constructing a commercially sound business model.
5.Engineering an electronic value chain in which one centers in on a "limited" number of core competencies - the opposite of a one stop shop.
6.Operating with or close to the cutting edge of technology and keeping up with the technology as it changes from time to time.
7.Setting up an organization of sufficient alertness and agility to respond quickly to any alteration in the economic, social and physical environment.
8.Provide an attractive website that will grab customers to explore your website.
9.Streamline business processes, possibly through re-engineering and information technologies. Above all, the E-commerce seller must execute routine tasks as being truthful about its product and its availability, shipping reliably, and handling complaints in a professional manner. One distinctive property of using E-Commerce through the internet is that individual customers have far more access to information, making E-Commerce exceptional in its time.

Historical Information

The definition of the term "electronic commerce" has changed over time. Initially "electronic commerce" meant the facilitation of commercial transactions electronically, usually using technology like Electronic Data Interchange (EDI, introduced in the late 1970s) to send commercial documents like purchase orders or invoices electronically.

Later it would incorporate such activites more precisely deamed "Web commerce" -meaning the purchase of goods and services over the World Wide Web by means of secure servers (note HTTPS, a special server protocol which encrypts confidential ordering information for customer security) with e-shopping carts and with electronic pay services, like credit-card payment authorizations. When the web first became distinguished among the public in 1994, many people felt that e-commerce would become a chief economic division. Although, it took until 1998 for security protocols (like the HTTPS discussed above) to become sufficiently developed and extensively deployed. Consequently, between the years of 1998 and 2000, a substantial portion of businesses in the United States and Western Europe in corporated basic Web sites.

As of 2005, E-Commerce has become well-established in major cities across the majority of North America, Western Europe, and some East Asian countries like South Korea. In spite of this, E-Commerce is still emerging slowly in some industrialized countries, and is basically nonexistent in many Third World countries.

Major Entities Using E-Commerce:

Amazon.com - Website that sells variety of products and services to customers. Ex: Toys, Books, DVDs and CDs

EBAY - Online auction and shopping website.

Exostar - Trading Exchange for the Aerospace and Defense Industry.

Smarthome - Production and Sale of automation products.