E-Commerce

E-Commerce

Definition: E-commerce (electronic commerce or EC) is the buying and selling of goods and services, or the transmitting of funds or data, over an electronic network, primarily the internet. These business transactions occur either as business-to-business, business-to-consumer, consumer-to-consumer or consumer-to-business. 

Meaning: E-Commerce or Electronics Commerce is a methodology of modern business which addresses the need of business organizations. E-commerce refers to paperless exchange of business information using following ways.

• Electronic Data Exchange (EDI)
• Electronic Mail (e-mail)
• Electronic Bulletin Boards
• Electronic Fund Transfer (EFT)

 

Features:

E-Commerce provides following features

·        Non-Cash Payment − E-Commerce enables use of credit cards, debit cards, smart cards, electronic fund transfer via bank's website and other modes of electronics payment.

·        24x7 Service availability − E-commerce automates business of enterprises and services provided by them to customers are available anytime, anywhere. Here 24x7 refers to 24 hours of each seven days of a week.

·        Advertising / Marketing − E-commerce increases the reach of advertising of products and services of businesses. It helps in better marketing management of products / services.

·        Improved Sales − Using E-Commerce, orders for the products can be generated any time, any where without any human intervention. By this way, dependencies to buy a product reduce at large and sales increases.

·        Support − E-Commerce provides various ways to provide pre sales and post sales assistance to provide better services to customers.

·        Inventory Management − Using E-Commerce, inventory management of products becomes automated. Reports get generated instantly when required. Product inventory management becomes very efficient and easy to maintain.

·        Communication improvement − E-Commerce provides ways for faster, efficient, reliable communication with customers and partners.

E-Commerce – Advantages

 

·        An organization can easily locate more customers, best suppliers and suitable business partners across the globe.

·        E-Commerce helps organization to reduce the cost to create process, distribute, retrieve and manage the paper based information by digitizing the information.

·        E-commerce improves the brand image of the company.

·        E-commerce helps organization to provide better customer services.

·        E-Commerce helps to simplify the business processes and make them faster and efficient.

·        E-Commerce reduces paper work a lot.

·        24x7 support. E-Commerce application provides user more options and quicker delivery of products.

E-Commerce - Disadvantages

·        There can be lack of system security, reliability or standards owing to poor implementation of e-Commerce.

·        Software development industry is still evolving and keeps changing rapidly.

·        Initial cost: The cost of creating / building E-Commerce application in-house may be very high. There could be delay in launching the E-Commerce application due to mistakes, lack of experience.

·         Security/ Privacy: Difficult to ensure security or privacy on online transactions.

·         Lack of touch or feel of products during online shopping.

 

E-Commerce - Business Models

E-Commerce or Electronics Commerce business models can generally categorized in following categories.

• Business - to - Business (B2B)
• Business - to - Consumer (B2C)
• Consumer - to - Consumer (C2C)

Business - to - Business (B2B)

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.

Business - to - Consumer(B2C)

Website following B2C business model sells its product directly to a customer. A customer can view products shown on the website of business organization. The customer can choose a product and order the same. Website will send a notification to the business organization via email and organization will dispatch the product/goods to the customer.

Consumer - to - Consumer (C2C)

Website following C2C business model helps consumer to sell their assets like residential property, cars, motorcycles etc. or rent a room by publishing their information on the website. Website may or may not charge the consumer for its services. Another consumer may opt to buy the product of the first customer by viewing the post/advertisement on the website.