E-commerce, or electronic commerce, refers to the
concept of conducting business communication and transactions online
via the World Wide Web. Overall, e-commerce is the concept of buying
and selling of goods and services, and the transfer of funds, through
digital communications. E-commerce is the most important concepts of
the Internet to emerge in recent years. Not only does it allow people
to exchange goods and services immediately, but there are no barriers
of time or distance involved in the process.
There are primarily three types of e-commerce. These include:
•
Business-to-Consumer (B2C): In this process, companies focus on selling
selected consumer products to an Internet-literate audience that is
willing to buy online.
• Business-to-Business (B2B): This process
involves interaction between businesses, either in an established
supply chain or with new trading partners.
•
Business-to-Administration (B2A): This category is still in the nascent
stages of development, and it involves electronic interaction of the
business community with public sector organizations.
E-commerce has exploded in recent years, with no end in sight to its growth rate due to several factors, such as:
•
Providing value and convenience to customers by offering a product or
product-line that attracts potential customers at a competitive price.
• Providing service and performance by offering a responsive, user-friendly purchasing experience.
• Providing an attractive website with a professional image.
• Providing incentives for customers to buy and to return to make additional purchases at a later date.
• Addressing concerns about reliability and security of online transactions in general.
• Streamlining business processes through re-engineering and the usage of information technology (IT).
• Allowing customers to shop at their own convenience.
However,
in spite of the tremendous growth of e-commerce, there are still
problems which arise from time to time that you need to be aware of, as
all could impact your profit margins
Some of the most common concerns and issues are:
• Failure to understand your customers needs and why they are buying from you and not somewhere else.
• Failure to consider the complete competitive situation in your market.
• Under-estimation of time requirements for shipping and or manufacturing.
• Customer concerns about the security of their personal information.
In
order to eliminate such problems, it is important for both the customer
and the vendor to understand how e-commerce works. In the typical
e-commerce transaction, the consumer moves through vendor's web site
selecting the product/service that he/she wants to purchase.
The
individual is then transferred to a secure online transaction server,
where all of the customer information provided by the buyer is
encrypted. Once the order is placed, the information provided moves
through a private secure gateway to a processing network, where the
issuing and acquiring banks complete or deny the transaction.
However,
it is important to note that in order to be able to accept credit cards
over the Internet, one has to apply to their respective bank for an
Internet Merchant Bank Account. The entire process, starting from the
customer selecting the product/service to the payment getting accepted,
usually takes place in about five to seven seconds.
There are
several payment systems available to accommodate the different
processing needs of vendors, from those who have a few orders in a day
to those who process thousands of transactions daily. Some of the
common suppliers offering services to e-commerce vendors include
1AutomationWiz.com, PayPal, Yahoo!, NetSuite, Inc., etc.
The
arrival of the Internet has forever changed the way people purchase
goods and services and of doing business as well. Companies are finding
that in order to keep ahead of competition, they need to adapt the
effectiveness of e-commerce and move their businesses forward.
