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E-Commerce, Essay Example
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E-commerce includes the buying and selling of objects over the Internet. It can include services and products, and e-commerce may also be performed on other types of computer networks besides the Internet. E-commerce has become considerably popular in recent years, with its involvement in some aspect of transactions that occur over the Internet. Online shopping and banking are two examples of this common aspect of the Internet and online business as it resembles today’s market.
E-business is much broader than e-commerce. The former represents the application of information and communication technologies to support the business’s activities. E-business includes more aspects than e-commerce, such as the interaction between business customers and partners. E-business goes beyond the buying and selling of goods and services of e-commerce, although it certainly contains it in many cases. Thus, they intersect in the dynamics of online transactions.
Competitive advantage can of course take many forms, referring to the higher earning of the cost of investments. The capturing of advantageous attributes represents an effective strategy, such as the implementation of new technologies into a product or business model. Access to natural resources can also provide a company with a competitive advantage.
Obtaining a competitive advantage can take two forms. Porter (1985) has identified two type of competitive advantage, found in cost advantage and differentiation advantage. The former refers to delivering the same benefits as the business’s competitors, but at a lower cost. The latter refers to delivering benefits that go above and beyond products of competing businesses. As these two forms both create superior value for its customers, a business can obtain a competitive advantage in either, or boy, ways. A business may use either of these positional advantages to prove benefits in cost or differentiation. Or, a resource-based advantage makes use of the business’s resources and capabilities to produce a competitive advantage.
Scaling methods remain an important dynamic, even for small businesses. For instance, one method is used by small businesses in regards to search engine optimization, where such principles are utilized in order to allow the website to be scaled. Scaling allows websites to become friendlier to users and servers. Thus, businesses should be careful to spend time on the many scaling methods available to improve the efficiency and presentation of their website to customers and other businesses.
Online security measures often run into dangerous online criminals who exhibit a number of options in the way of Internet crime. According to Chickowski (2008), “the ways of making money with online scams, identity theft, and hacking are limited only by criminal creativity.” Chickowski also points to the “thriving” underground community of online criminals (2008). A number of scams exist to give problems to Internet crime.
Some of the most dangerous forms of Internet crime are which Chickowski mentions. Identity theft is one growing crime in the United States and around the world, with the Internet serving as a major role. Hackers and other criminals target businesses or users on the Internet for online crimes. For instance, malware writers attempt to exploit Internet Explorer, which takes up nearly 70% of the browser market (Keizer 2009). It has caused users to look for other browsers, account for Internet Explorer’s dropping share.
Internet security is constantly evolving. However, so are methods to hack into user’s and business’s accounts. As a result online crime is undergoing difficult situations in this realm. Not to mention, not all Internet users keep up with the latest technologies and scams. This makes them easy targets for online criminals to take advantage of these users, to infiltrate their accounts, passwords, and other sensitive information.
Someone who uses the Internet would generally be much more likely to continue doing so. The Internet allows individuals to perform a number of activities, both for business and personal reasons that would make continued use of the Internet quite logical. For instance, an individual may find connectivity with friends and family useful. Others may find the Internet complimentary to research for work, or even supplement their work with a website to improve business.
Internet usage can also be seen along the lines of e-commerce, to which we have analyzed briefly. Shopping online is considered quite convenient for many who have engaged in this part of business. As retailers make better use of the Internet, such as cheaper and faster methods of shipping and online sales, consumers will be more likely to shop online. This relationship is one of many in the growing use of the Internet for individuals who are becoming more experienced online.
Overall convenience will dictate increased presence on the Internet for many individuals. The Internet provides many conveniences to enhance the quality of life, to connecting with family via e-mail or a social network to finding additional work online. Of course conveniences exist in e-commerce and business online for consumers and businesses. The nature of the Internet will allow experienced users to continue or increase their Internet usage.
Chickowski, Ericka (2008). “Inside online crime: Of hackers, identity theft and online scams.” http://www.baselinemag.com/c/a/Security/Inside-Online-Crime-Of-Hackers-Identity-Theft-and-Online-Scams/. Retrieved 2010-05-25
Keizer, Gregg (2009). “Internet explorer loses market share.” http://www.pcworld.com/article/156306/ie_loses_market_share.html?tk=rss_news. Retrieved 2010-05-25
Porter, Michael (1985). Competitive advantage: Creating and sustaining superior performance. New York, NY: Free Press.
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Essay on E-Commerce: Scope, Importance, Advantages and Limitations
Essay on E-Commerce: Scope, Importance, Advantages and Limitations! Read this essay to learn about essay on e commerce, e-commerce essay topics, essay on ecommerce in india, e-commerce essays advantages and disadvantages, essay on e commerce and online shopping, e-commerce essay conclusion!
Essay on e-commerce:.
Electronic commerce, commonly known as e-commerce, is the buying and selling of product or service over electronic systems such as the Internet and other computer networks. Electronic commerce draws on such technologies as 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 one point in the transaction’s life-cycle, although it may encompass a wider range of technologies such as e-mail, mobile devices and telephones as well.
Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of the exchanging of data to facilitate the financing and payment aspects of business transactions.
Even today, some considerable time after the so called ‘dot com/Internet revolution’, electronic commerce (e-commerce) remains a relatively new, emerging and constantly changing area of business management and information technology.
There has been and continues to be much publicity and discussion about e-commerce. Library catalogues and shelves are filled with books and articles on the subject.
However, there remains a sense of confusion, suspicion and misunderstanding surrounding the area, which has been exacerbated by the different contexts in which electronic commerce is used, coupled with the myriad related buzzwords and acronyms.
In the emerging global economy, e-commerce and e-business have increasingly become a necessary component of business strategy and a strong catalyst for economic development. The integration of Information and Communications Technology (ICT) in business has revolutionized relationships within organizations and those between and among organizations and individuals.
Specifically, the use of ICT in business has enhanced productivity, encouraged greater customer participation, and enabled mass customization, besides reducing costs. With developments in the Internet and Web-based technologies, distinctions between traditional markets and the global electronic marketplace-such as business capital size, among others-are gradually being narrowed down.
The name of the game is strategic positioning, the ability of a company to determine emerging opportunities and utilize the necessary human capital skills to make the most of these opportunities through an e-business strategy that is simple, workable and practicable within the context of a global information milieu and new economic environment.
With its effect of leveling the playing field, e-commerce coupled with the appropriate strategy and policy approach enables small and medium scale enterprises to compete with large and capital-rich businesses.
On another plane, developing countries are given increased access to the global marketplace, where they compete with and complement the more developed economies.
Most, if not all, developing countries are already participating in e-commerce, either as sellers or buyers. However, to facilitate e-commerce growth in these countries, the relatively underdeveloped information infrastructure must be improved.
Among the areas for policy interventions are:
(i) High Internet access costs, including connection service fees, communication fees, and hosting charges for websites with sufficient bandwidth;
(ii) Limited availability of credit cards and a nationwide credit card system;
(iii) Underdeveloped transportation infrastructure resulting in slow and uncertain delivery of goods and services;
(iv) Network security problems and insufficient security safeguards;
(v) Lack of skilled human resources and key technologies;
(vi) Content restriction on national security and other public policy grounds, which greatly affect business in the field of information services, such as the media and entertainment sectors;
(vi) Cross-border issues, such as the recognition of transactions under laws of other ASEAN member-countries, certification services, improvement of delivery methods and customs facilitation; and
(vii) The relatively low cost of labor, which implies that a shift to a comparatively capital intensive solution including investments on the improvement of the physical and network infrastructure is not apparent.
It is recognized that in the Information age, Internet commerce is a powerful tool in the economic growth of developing countries. While there are indications of e-commerce patronage among large firms in developing countries, there seems to be little and negligible use of the Internet for commerce among small and medium sized firms.
E-commerce promises better business for SME’s and sustainable economic development for developing countries. However, this is premised on strong political will and good governance, as well as on a responsible and supportive private sector within an effective policy framework. This primer seeks to provide policy guidelines toward this end.
Essay on the History of E-Commerce:
History of ecommerce dates back to the invention of the very old notion of “sell and buy”, electricity, cables, computers, modems, and the Internet. Ecommerce became possible in 1991 when the Internet was opened to commercial use. Since that date thousands of businesses have taken up residence at web sites.
At first, the term ecommerce meant the process of execution of commercial transactions electronically with the help of the leading technologies such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) which gave an opportunity for users to exchange business information and do electronic transactions.
The ability to use these technologies appeared in the late 1970s and allowed business companies and organizations to send commercial documentation electronically. Although the Internet began to advance in popularity among the general public in 1994, it took approximately four years to develop the security protocols and DSL which allowed rapid access and a persistent connection to the Internet.
In 2000 a great number of business companies in the United States and Western Europe represented their services in the World Wide Web.
At this time the meaning of the word ecommerce was changed. People began to define the term ecommerce as the process of purchasing of available goods and services over the Internet using secure connections and electronic payment services.
Although the dot-com collapse in 2000 led to unfortunate results and many of ecommerce companies disappeared, the “brick and mortar” retailers recognized the advantages of electronic commerce and began to add such capabilities to their web sites (e.g., after the online grocery store Webvan came to ruin, two supermarket chains, Albertsons and Safeway, began to use ecommerce to enable their customers to buy groceries online).
By the end of 2001, the largest form of ecommerce, Business-to- Business (B2B) model, had around $700 billion in transactions.
According to all available data, ecommerce sales continued to grow in the next few years and, by the end of 2007, ecommerce sales accounted for 3.4 percent of total sales. Ecommerce has a great deal of advantages over “brick and mortar” stores and mail order catalogs. Consumers can easily search through a large database of products and services.
They can see actual prices, build an order over several days and email it as a “wish list” hoping that someone will pay for their selected goods. Customers can compare prices with a click of the mouse and buy the selected product at best prices.
Online vendors, in their turn, also get distinct advantages. The web and its search engines provide a way to be found by customers without expensive advertising campaign. Even small online shops can reach global markets. Web technology also allows to track customer preferences and to deliver individually-tailored marketing.
History of ecommerce is unthinkable without Amazon and E-bay which were among the first Internet companies to allow electronic transactions. Thanks to their founders we now have a handsome ecommerce sector and enjoy the buying and selling advantages of the Internet. Currently there are 5 largest and most famous worldwide internet retailers- Amazon, Dell, Staples, Office Depot and Hewlett Packard.
According to statistics, the most popular categories of products sold in the World Wide Web are music, books, computers, office supplies and other consumer electronics.
Amazon.com, Inc. is one of the most famous ecommerce companies and is located in Seattle, Washington (USA). It was founded in 1994 by Jeff Bezos and was one of the first American e-commerce companies to sell products over the Internet.
After the dot-com collapse Amazon lost its position as a successful business model, however, in 2003 the company made its first annual profit which was the first step to the further development.
At the outset Amazon.com was considered as an online bookstore, but in time it extended a variety of goods by adding electronics, software, DVDs, video games, music CDs, MP3s, apparel, footwear, health products, etc.
The original name of the company was Cadabra.com, but shortly after it become popular in the Internet Bezos decided to rename his business “Amazon” after the world’s most voluminous river. In 1999 Jeff Bezos was entitled as the Person of the Year by Time Magazine in recognition of the company’s success.
Although the company’s main headquarters is located in the USA, WA, Amazon has set up separate websites in other economically developed countries such as the United Kingdom, Canada, France, Germany, Japan, and China. The company supports and operates retail web sites for many famous businesses, including Marks & Spencer, Lacoste, The NBA, Bebe Stores, Target, etc.
Amazon is one of the first ecommerce businesses to establish an affiliate marketing program, and nowadays the company gets about 40% of its sales from affiliates and third party sellers who list and sell goods on the web site.
In 2008 Amazon penetrated into the cinema and is currently sponsoring the film “The Stolen Child” with 20th Century Fox. According to the research conducted in 2008, the domain Amazon.com attracted about 615 million customers every year.
The most popular feature of the web site is the review system, i.e. the ability for visitors to submit their reviews and rate any product on a rating scale from one to five stars. Amazon.com is also well-known for its clear and user-friendly advanced search facility which enables visitors to search for keywords in the full text of many books in the database.
One more company which has contributed much to the process of e-commerce development is Dell Inc., an American company located in Texas, which stands third in computer sales within the industry behind Hewlett Packard and Acer.
Launched in 1994 as a static page, Dell.com has made rapid strides, and by the end of 1997 was the first company to record a million dollars in online sales. The company’s unique strategy of selling goods over the World Wide Web with no retail outlets and no middlemen has been admired by a lot of customers and imitated by a great number of ecommerce businesses.
The key factor of Dell’s success is that Dell.com enables customers to choose and to control, i.e. visitors can browse the site and assemble PCs piece by piece choosing each single component based on their budget and requirements. According to statistics, approximately half of the company’s profit comes from the web site.
In 2007, Fortune magazine ranked Dell as the 34th-largest company in the Fortune 500 list and 8th on its annual Top 20 list of the most successful and admired companies in the USA in recognition of the company’s business model.
History of ecommerce is a history of a new, virtual world which is evolving according to the customer advantage. It is a world which we are all building together brick by brick, laying a secure foundation for the future generations.
Essay on the Scope of E-Commerce:
There is high scope of e-commerce in each aspect of business, at present it is in the embryonic stage but in future e-commerce would be the part of day to day activity of business firms.
Following are the marketing areas where we seek scope of e-commerce:
(i) Marketing, sales and sales promotion.
(ii) Pre-sales, subcontracts, supply.
(iii) Financing and insurance.
(iv) Commercial transactions – ordering, delivery, payment.
(v) Product service and maintenance.
(vi) Co-operative product development.
(vii) Distributed co-operative working.
(viii) Use of public and private services.
(x) Transport and logistics.
(xi) Public procurement.
(xii) Automatic trading of digital goods like games, learning material, songs and music etc.
(xiii) Accounting and financial management.
(xiv) Legal advice
Essay on the Need for E-Commerce:
E-commerce and e-business are not solely the Internet, websites or dot com companies. It is about a new business concept that incorporates all previous business management and economic concepts.
As such, e-business and e-commerce impact on many areas of business and disciplines of business management studies:
Issues of online advertising, marketing strategies, consumer’s behavior and cultures. One of the areas in which it impacts particularly is direct marketing. In the past this was mainly door-to-door, home parties and mail order using catalogues or leaflets.
This moved to telemarketing and TV selling with the advances in telephone and television technology and finally developed into e-marketing spawning ‘e-CRM’ data mining and the like by creating new channels for direct sales and promotion.
2. Computer Sciences:
Development of different network and computing technologies and languages to support e-commerce and e-business, for example linking front and back office legacy systems with the ‘web based’ technology.
3. Finance and Accounting:
On-line banking; issues of transaction costs; accounting and auditing implications where ‘intangible’ assets and human capital must be tangibly valued in an increasingly knowledge based economy.
The impact of e-commerce on local and global economies, understanding the concept of a digital and knowledge-based economy and how this fits into economic theory.
5. Production and Operations Management:
The impact of on-line processing has led to reduced cycle times. It takes seconds to deliver digitized products and services electronically; similarly the time for processing orders can be reduced by more than 90 per cent from days to minutes.
Production systems are integrated with finance marketing and other functional systems as well as with business partners and customers.
6. Production and Operations Management:
Moving from mass production to demand driven, mass customization customer pull rather than the manufacturer push of the past. Web based Enterprise Resource Planning systems (ERP) can also be used to forward orders directly to designers and/or production floor within seconds, thus cutting production cycle times by up to 50 per cent, especially when manufacturing plants, engineers and designers are located in different countries.
In sub-assembler companies, where a product is assembled from a number of different components sourced from a number of manufacturers, communication, collaboration and coordination are critical so electronic bidding can yield cheaper components and having flexible and adaptable procurement systems allows fast changes at a minimum cost so inventories can be minimized and money saved.
7. Management Information Systems:
Analysis, design and implementation of E-business systems within an organization; issues of integration of front-end and back-end systems.
8. Human Resource Management:
Issues of on-line recruiting, home working and ‘intra- pruners’ working on a project by project basis replacing permanent employees.
9. Business Law and Ethics:
The different legal and ethical issues that have arisen as a result of a global ‘virtual’ market. Issues are copyright laws, privacy of customer information, and legality of electronic contracts.
Importance of E-Commerce :
Today, we can see e-commerce is becoming a part of study of almost all the courses in management and commerce. It is an integral part of any book or manuscript that is written on retailing, and it claims a significant share in this text also. The reason behind this lies in the fact that e-commerce technology is different and more powerful than any of the other technologies we have seen in the past century.
While these other technologies transformed economic life in the 20th century, the evolving Internet and other ITs will shape the 21st century in many ways. The foremost of these is the rise of a sizeable class of Internet-habituated consumers, and then is the creation of an ecosystem essential for e-tailing’s growth. In India’s case, both these factors are poised to fall into place rapidly.
Prior to the development of e-tailing, the process of marketing and selling goods was a mass- marketing and/or sales force-driven process. Consumers were considered as passive targets of advertising (promotional) “campaigns,” and branding blitzes were intended to influence their long-term product perceptions (brand positioning) and immediate purchasing behavior.
Selling was conducted in typical well-insulated “channels.” Consumers were viewed to be trapped by geographical and social boundaries, unable to search widely for the alternatives with best price and quality. Information about prices, costs, and tariffs could be hidden from the customers to get the resultant profitable “information asymmetries” for the selling firm.
Here, information asymmetry means any disparity in relevant market information among parties in a transaction. E-commerce has challenged much of these traditional retail business norms, assumptions, and behavior.
Essay on the Principles of E-Commerce:
The various principles of e-commerce are as follows:
1. Sell Everywhere – be Seen and be Shopped:
Customer expectations for how and when they buy products have changed substantially over the past few years. Multi-channel selling was once limited to managing direct sales, a call centre, a website, and possibly a partner channel.
With E-Commerce 2.0, this has been expanded and refined to include various online channels. These new channels include additional branded websites, various online marketplaces (such as eBay, Amazon.com, Overstock.com and others), and online shopping comparison engines (such as Shopping.com, PriceGrabber.com and others).
2. The Long Tail -Target Niche Markets:
E-Tailers who can connect with niche markets and provide a better online experience are capitalizing on new-found revenue. In the past, the obvious strategy was to find the bulk of the market and then mass market to them. With so much competition, many online merchants have adapted by discovering new methods and tools that target specific niche markets.
These niche markets are not flooded by the big brands and respond well to content and online experiences directed specifically at them. In many cases, the demands of these niche markets are simply not being met by big brands.
The Long Tail principle of E-Commerce 2.0 is about being able to reach beyond the traditional prospect base and tap the potential of niche markets.
3. Decentralized Content Generation – Data from the Community:
Buyers were once along for the ride in the e-Commerce process. Now they are in the driver’s seat. The content buyers create through forums such as product reviews, blogs and social networks influences other buyers as much or more than any promotion E-Tailers create.
Forums like YouTube and MySpace underscore how content created by consumers has become a viable and valuable part of the promotional and sales cycle for retailers. The Canadian e- Commerce site Wasabi even encourages buyers to submit any offers that they find through social and economic incentives.
While some E-Tailers are frightened by the perceived loss of control over content being published, these new avenues of data acquisition greatly increase the richness and diversity of information available, ultimately helping the buyer make better decisions.
4. Personalized Shopping – Make it Fun to Shop and Easy to Buy:
Shopping has long been considered a recreational activity by many. Shopping online is no exception. In fact, with the sophistication and speed of online shopping tools, consumers are spending more and more on E-Tailer sites.
The best of these shopping tools takes into account that buyers want to be entertained and pleased. Buyers are just as in the brick-and-mortar world do not like long checkout processes. When building your online brand, regardless of channel, remember that speedy checkout equates to happier buyers who are more likely to return and buy again.
5. Mash-Ups -Integrate and Collaborate:
Integration is nothing new, but what is new is how dynamically these integrations need to be initiated, modified, and used. The e-Commerce 2.0 environment is built upon many interrelated systems and processes that require information to be exchanged dynamically.
This happens between many systems based on individual user experience and the context of a particular customer interaction or order. Seamless access and interaction between systems is what promotes increased conversions and buyer loyalty, as well as attracts new buyers.
6. Data is King-Collect a Wealth of Opportunities:
Gone are the days of looking at purely operational reports. Seeing how many listings you have in a marketplace is fine, but it does not tell you how you compare to other E-Tailers, what your performance is like over time, or what other channels may be more profitable.
E-Commerce 2.0 is about collecting and managing data from all online channels to enable better business decisions. Discovering product opportunities relies on being able to define business objectives carefully, identify related key performance indicators (KPIs) and receive continual data to act on it.
In E-Commerce business is possible in various combinations like:
(i) B2B – Business to Business
(ii) B2C – Business to Consumer
(iii) C2B – Consumer to Business
(iv) B2E – Business to Employee
(v) C2C – Consumer to Consumer
(i) B2B – Business to Business:
E-Commerce has been in use for quite a few years and is more commonly known as EDI (electronic data interchange). In the past, EDI was conducted on a direct link of some form between the two businesses where as today the most popular connection is the internet. B2B E-Commerce could be used as a significant enabler in their move towards greater trading partner collaboration. E-Commerce technologies have allowed even the smallest businesses to improve the processes for interfacing with customers. They are now able to develop services for individual clients rather than provide a standard service.
The two businesses pass information electronically to each other.
Typically in the B2B environment, E-Commerce can be used in the following processes:
(ii) Order fulfillment.
(iii) Managing trading-partner relationships.
B2B is helpful in reduction in transaction costs and improvement of product quality and customer service and insistence by large businesses that all of their suppliers link into their e-commerce system as a condition of doing business. In addition, there is greater demand by final consumers for fast order fulfillment and the ability to track an order as it is being processed and delivered.
(ii) B2C – Business to Consumer:
Business to Consumer e-commerce is where the consumer accesses the system of the supplier. It is still a two way function but is usually done solely through the Internet.
B2C can also relate to receiving information such as share prices, insurance quotes, online newspapers, or weather forecasts. When the product cannot be physically examined, traditional commerce has no advantage over the convenience of electronic commerce. The largest business-to-consumer e-commerce involves intangible product that can be delivered directly to the consumer’s computer cover the network is composed of five broad categories-entertainment, travel newspaper/magazines, financial services, and e-mail. Entertainment, online games, music and video, is the largest category of products sold to consumers.
(iii) C2B – Consumer to Business:
Consumer to Business is a growing area where the consumer requests a specific service from the business. Like reservation in a hotel in a specific time period.
(iv) B2E – Business to Employee:
Business to Employee e-commerce is growing in use it is in practice in business like pharmacy marketing, supply chain management, insurance, IT companies etc. This form of e-commerce is more commonly known as an ‘Intranet’. An intranet is a web site developed to provide employees of an organization with information. The intranet is usually access through the organizations network, it can and is often extended to an entrant which uses the Internet but restricts uses by sign on and password.
(v) C2C – Consumer to Consumer:
These sites are usually some form of an auction site. The consumer lists items for sale with a commercial auction site. Other consumers access the site and place bids on the items. The site then provides a connection between the seller and buyer to complete the transaction.
Essay on the Key Elements Supporting E-Commerce :
Here are seven important infrastructure decisions that ecommerce businesses face:
Of all the infrastructure elements, marketing may be the most important. To succeed, your website must be found. Once visitors are on your site, you need to keep them there and compel them to buy from you. That’s the job of your marketing team.
Whether it is website design, social media, search marketing, merchandising, email or other forms of advertising, it’s all about marketing.
To effectively manage marketing activities in-house is very challenging. Most small ecommerce businesses outsource some element of marketing.
2. Facilitie s:
A key competitive advantage that ecommerce businesses have over brick-and-mortar stores is the investment in their physical offices and warehouses. In many cases, you can host your business out of a home office and your basement or garage.
If you drop ship or outsource fulfillment, you may be able to do that for a long period of time. Even when you grow to have many employees, you can set up your offices in class B or C space, as you have no need for a fancy store in the right location.
A word of advice is to keep your options flexible. Try to find an office park that has a wide variety of spaces in different sizes. You may be able to start in a smaller space and move up to a larger one without penalty, as your needs change.
3. Customer Service :
There are many choices today for delivering high-quality customer service. You can manage those activities in-house or outsource to a third party. Basic customer service for sales and post- sales activities can be handled using email, and by providing an 800 number for more extensive phone support.
A customer-management system will make those activities easier, but for smaller companies it is not a requirement.
Live chat will impact your operations as someone needs to be available during specified hours of operation. Be sure to gauge the impact of that on your organization, if you decide to handle those activities in house.
4. Information Technology :
Choosing the right ecommerce platform is one of the most important decisions you will make in your business. Do you want to build and host your own system, outsource the development and then manage the system going forward, or using a host, software as a service platform that is more turnkey and externally managed?
If you build and host your own system, you may need more cash up front and skilled administrators and developers on your staff. By using a SaaS platform, you will not need to host or manage the system in-house, but you may still need web developers on staff.
Choosing to outsource the development and hosting will reduce your staffing costs, but you will incur higher costs for any future enhancements or changes to your websites.
There are pros and cons to any approach. Just be sure to think through the impacts on both your staffing and your cash flow and bottom line before you move forward.
5. Fulfillment :
Another key decision is whether you will manage your own inventory or outsource those activities to a fulfillment house or through drop shipping arrangements with your suppliers.
Managing your own inventory will provide you with a high level of control, but you will tie up your cash in inventory, warehouse space, and your own fulfillment staff. In some industries like the jewelry supply industry that my previous business was in managing your own inventory was the most logical choice.
We had no alternative for drop shipping, and most items were purchased in bulk and were very small. We did not trust preparation and fulfillment to an outside service.
Select the best fulfillment option to meet your needs. Be sure to understand the costs involved and analyze the other options before moving forward.
6. Finance and Administration :
As with other business operations, you will need to decide if you want to manage your finance and administration activities in-house, outsource, or a hybrid of the two. If your ecommerce platform is tightly integrated to your accounting system, you may have very little need for an in-house bookkeeper.
If you use separate systems for your website, order management and accounting, you may require more help for data entry and making sure that the information is properly managed. Many ecommerce companies use outside services for vendor payments, payroll, and other basic accounting activities.
They decide to focus on the sales, marketing, and customer service. This allows them to maintain a focus on growing their businesses, instead of paying an internal accountant or doing that work you as the business owner.
On the administration side, you need a leadership team and provide direction to them. Good communication is important, whether you have 3 or 100 employees. Whether you choose to be more authoritative or democratic in your management style is up to you.
But choose a style and stay consistent. Be sure that everyone understands their roles, as well as the overall business strategies. You may need to adjust your approach as your business evolves.
7. Human Resources :
Many small-business owners avoid the human resources function. Recruiting, setting up compensation, maintaining compliance and other HR activities are specialized and time consuming.
You may choose to bring the resources in-house to manage those activities, but also evaluate outsourcing them. There are many individuals and agencies well equipped to take on your HR activities.
Impact of E-Commerce on Business:
i. Transformation in the Marketplace:
Now business can be conducted at anywhere any place accessible to internet. Firms can offer their products and services with involvement of intermediaries. Traditional intermediary functions will be replaced, new products and markets will be developed, and new and far closer relationships will be created between business and consumers. It will change the organization of work- new channels of knowledge diffusion and human interactivity in the workplace will be opened more flexibility.
ii. Fast Growth of Business:
E-commerce will serve as a catalyst and diffuse more widely changes that are already under way in the economy, such as the reform of regulations, the establishment of electronic links between businesses (EDI), the globalization of economic activity, and the demand for higher-skilled workers. Likewise, many pectoral trends already under way, such as electronic banking, direct booking of travel, and one-to-one marketing, will be accelerated because of electronic commerce.
iii. Helpful in Globalization:
Information exchange was constraint in transnational business but e-commerce provides facilities to MNCs and global organizations to transfer real time information to employees, stake holders and customers. E-commerce over the Internet greatly increases interactivity in the economy. These linkages support business organization in expansion of business.
iv. Electronic Commerce Growth:
At present, electronic commerce over the Internet is relatively small but is growing very rapidly. At present electronic commerce is in a birth stage, and technology and market dynamics are still casting its basic shape. People resist using e-commerce. This is especially true for the business-to-consumer segment, where people concerns about security of payment, potentially fraudulent merchants, privacy of personal data, etc.
v. New Employment Opportunities:
Electronic commerce will cause changes in the mix of skills required, driving demand for information technology professionals. For electronic commerce, IT expertise also needs to be joined with strong business applications skills, and therefore requires a flexible, multi-skilled works force. Apart from contingent skills needed to support electronic commerce transactions and applications, there will be a requirement of hardware and software professionals.
vi. New Business Opportunities:
Changing industry structures and electronic commerce systems allow for new business models, based on the wide availability of information and its direct distribution-to end customers. Going further than new ones, we also see new business models are new forms of intermediaries, or information brokers. The examples are currently the directory providers or the search engines, such as Yahoo and Lycos, bidding sites like e-bay, Internet shopping, on line trading, online consultancy etc.
E-commerce is a technology driven activity which require an infrastructure that supports the seamless location, transfer, and integration of business information in a secure and reliable manner. Adaptability of e-commerce in small cities and village is very low due to non-availability of basic infrastructure.
vii. Product Promotion:
Through a direct, information rich and interactive contact with customers. The first use of electronic commerce is to provide product information through online electronic brochures and buying guides. This can be seen as an additional marketing channel, allowing reaching maximum number of customers the advantage of electronic commerce as way to deliver product information and its availability anytime, anywhere, provided the customer has right infrastructure to access the information.
viii. New Sales Channel:
Multidirectional approach of e-commerce has created new sales channels by which firms can directly reach to customers, suppliers, and stake holders, considering electronic commerce and in particular the World Wide Web, as a sales channel makes sense for two kinds of products- Physical products sometimes also sold in conventional stores, which can be advertised and for ordered online, such as computer hardware or wine, products which can additionally be delivered over the electronic commerce medium, such as information or software.
Electronic commerce strategies are of primary value in markets where information is of significant added value to the products being brought, rather than in commodity markets. Centralizing, this information digitally is therefore of significant value for customers.
ix. Customer Service:
E-commerce provides on line customer care and support services. The ability to provide online answers to problems, through resolution guides, archives of company encountered problems, electronic mail interaction, in the future audio and video support and all that 24 hours a day, 365 days a year, builds customer confidence and retention. Monitoring how customers use this support information also provides insights on improvement areas in current products and the list of issues encountered with products can be significant source of product feedback for the design of new products.
x. Customer Relationships:
Electronic commerce systems will allow for more personalized relationships between suppliers and their customers, due to their ability to collect information on customer’s needs and behavioural patterns. The role of technology in learning about customers is its ability to record every event in the relationship, such as customers asking for information about a product, buying one, requesting customer service, etc. Throughout all these interactions, either over the phone, in person or online, the needs of the customer are identified and will feed future marketing efforts.
Essay on the Basic Elements of E-Commerce Hosting:
Ecommerce web hosting is gaining swift popularity with every passing day as more and more people use the internet to shop and purchase things. Even traditional brick and mortar businesses are also looking for options to make their products and services available online so as to increase the customer base by allowing geographically dispersed customers to access their online store.
Since an online store is such an important part of the business, you may need to put in a lot of time and effort while selecting your ecommerce hosting company.
Following are the key elements of ecommerce hosting:
1. Security :
You need to bear in mind that while making online sales, you will have access to the credit card information of many clients and such information is very sensitive. Hence, online stores are prone to security issues as hackers try to gain access to such information.
Thus, to ensure that the client information is not at risk, you need to choose an ecommerce hosting provider which offers tight security options such as sophisticated firewalls, valid SSL certificates and anti- phishing software.
2. Flexibility :
If you are a startup business your business demands might not be as high as those of large businesses and you may opt for an ecommerce plan which fulfills your immediate hosting needs. However, as businesses grow, demands increase and you may need more space and bandwidth.
If your current ecommerce hosting provider does not offer flexible plans, you may need to transfer your hosting account to another provider. Thus, keep your expansion plans in mind while selecting a hosting company and make sure your provider offers flexible plans.
3. Reliability :
The key to the success of an online store is convenience and round the clock availability. People generally use online stores because they are accessible at all times from anywhere in the world.
However, if your hosting company does not provide maximum uptime, your online store may not be available to customers hence forcing them to purchase from your competitors. Thus, choosing a hosting provider which offers 50% uptime would mean that you are allowing competitors to lure your customers.
4. Accessibility and Ease :
A website which is easy to browse for products and services is generally liked by customers. Therefore, it is necessary to bring your website at the top in terms of search engine results. Once your website is search engine optimized, you may drive loads of traffic to the website. However, if the hosting servers are down most of the time, making your website search engine optimized would be in vain.
5. Technical Expertise and Customer Support :
Another key element of ecommerce hosting is technical expertise of the hosting provider. This is an essential element especially during peak times as you may need immediate technical help for your online store in order to deal with certain website issues.
Also, ensure the customer support is available 24/7 via live chat, email and phone to assist clients in solving issues.
The above mentioned elements of ecommerce hosting are crucial to the success of any online business and thus should not be ignored.
Now that you know what you need to run a successful ecommerce site, you can buy and sell websites, being sure that you will be able to figure out how to host them on a decent server or offer the best quality possible (in case you sell sites) to your buyer.
Essay on the Advantages, Limitations, and Challenges :
E-tailing can be considered another form of non-store retailing. Its closest “cousin,” in terms of other forms of non-store retailing, is catalog retailing. Catalog retailing still claims a significant part of all retail transactions pie. It is therefore instructive to compare e-tailing to catalog retailing to gain some insight into its potential impact.
Catalog retailing, which evolved over a century ago, grew rapidly in its early stages (similar to e-tailing), and it was assumed to become a very important part of the overall retailing environment and market. It allowed customers to shop from home, when they wanted, at their own convenience. While this proved enticing and comfortable for some consumers and some types of products, there are some limitations that limited its growth further.
1. Customers have a much wider choice at their fingertips (many e-tail sites, etc.). Thus, the web creates a global bazaar-style marketplace that brings together many consumers and many retailers and sellers.
2. With web search capabilities (which need further development), it is easier to find the different types and varieties of goods a customer is searching for.
3. Customers can execute transactions/put orders via the same medium the information is provided, so there is no disconnect between the desire to purchase and the ability to purchase.
4. Payment schemes are still evolving, and therefore, this advantage is likely to become more apparent in the future.
5. E-tailers can use price discrimination more efficiently than other retailers.
6. E-tailers can use previous transactions to identify the likelihood of products being purchased at certain price points.
7. Product placement- E-tailers can change the product placement (user display) based on previous transactions, to increase the visibility of goods that the user is more likely to purchase based on their close relationship with previous purchases. Thus, placement can be designed based on the context of the previous purchases.
8. E-tailing includes some advantages to the consumer that no other form of retailing can provide. The hypertext nature of the medium allows for more flexible forms of transactions—the growth of C2B and C2C highlights this point. It allows for ease of comparison across broad product categories with the evolution of shopping bots and allows for more flexible pricing mechanisms that lead to dynamic pricing.
9. This is giving benefit to marketers who provide products with real (perceived) value and consumers in general. It also penalizes the marketers who have thrived in marketplaces that had “information” barriers to entry, where lack of information for customers restricted their choices and led to inefficient pricing and localized monopolies.
10. Inventory-based e-retailers are known the world over for running highly automated and efficient warehouses, bringing new benchmarks in this function.
1. All the customers may not have access to the web, as they do to the postal system. This is a temporary issue as the evolution of the web continues.
2. Ease of use may be an issue, as the web design may appear to be complex for some users or at sometimes a bit chaotic.
3. Online retail stores are not standardized in design in the way catalogs and retail stores (which use planograms for the same) have become.
4. Therefore, different user behaviors and patterns (navigation schemes) need to be observed for each online store. This is again a temporary issue as the evolution of the web continues.
5. Many times, trust deficit, security, and privacy concerns prevail. Consumers are concerned with the exposure of the data they provide/insert during transactions.
6. In Indian context, tax demands and regulatory hassles, coupled with low Internet density and sundry other problems, pose some other challenges.
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Essay on e-commerce: meaning, advantages and disadvantages.
Read this article to learn about the meaning, advantages and disadvantages of E-Commerce.
Meaning of E-Commerce:
The fast and dramatic changes in information technology specially in last one decade has given new concept of marketing in which buyer and seller do not see each other face to face nor see the goods physically; the whole transaction is carried out with the help of ‘on line’ communication. The entire deal is carried out with the help of computer – telecommunication and net working with associated hardware.
In the e – commerce internet provides information about goods and services “It is” a way of conducting imaging and executing business transactions and services through electronic media and net working in computers and communication net work, websites, e-mail are resorted.
Customers know about goods and services sitting at home. The manufacturers, distributors, suppliers and services providers let the consumers know about their products quality, price, size, color etc. through multi-colored catalogues on website. The consumers can ‘surface various web sites and compare their relative prices, quality characteristic, features etc.
These details can be obtained from suppliers around the globe. The websites are available beside for goods for direct selling, context selling, financial and other services such as hospitals, education, training, advertisements, property, entertainment, product demonstrations, bill payment, exchange and all other services which one can think of.
The types of selling through the use of internet and other electronic devices can be of following types:
1. Business to Business (B2B):
This implies selling by one business manufactures to other business manufactures, trade, wholesaler or retailer. In India as yet most of the e-commerce is B2B. The number of companies like TELCO, IBM, C1TI BANK, BHEL, ESSAR, TVS, MARUTI, BAJAJ, and many others are doing B2B. In 1998 out of total e-commerce of us$ 210 billion us$ 100 billion was accounted for B2B.
2. Business to Consumer (C2B):
When business sells to customers/consumers it is called B2C and is most important from our point of view. The products include items sold in departmental stores, chemist shops, grocery stores, books, stationery, clothes, vegetables, fruits and what not. As yet in India such sales are only of US$ 100 billion but are expected to go up to US$ 900 billion by 2005 i.e. the growth of 9000 percent. Many service sectors are adopting this mode.
3. Consumer to Consumer (C2C):
Under this system when some consumer want to dispose off his old items, he can take the help of selling through internet. But this type of e-commerce is not very common at least in India and the business is negligible.
4. Business to Government (B2G):
Business house or on individual business has to file income tax and sales tax returns and various types of other returns. As yet this requires filing of return in respective office and apply for approval in concerned office. But now many countries allow this type of activity through e-mail/e-commerce. However, as yet this is not being done in India.
5. Government to Consumer (G2C):
In order to provide facilities to public and speed up information and records government in many cases provide record of information, through this system; sale of documents, passport forms, copies of returns etc are supplied through e-mail. The main features of e-commerce is that one does not physically feel an item nor sees it and places order on the basis of information supplied through website or in response to consumers inquiry, as yet e-commerce has last preference for daily consumption items.
It is largely limited to durable goods like computers, TV’s, automobiles, books, travel reservation. In case of service it is becoming popular for banking and share purchases. The growth of E-commerce is restricted as given in Table 20.1
Key players in e-commerce are consumers and sellers.
E-mail net work :
E-commerce requires visit of website, selection of products, select a payment mode, realization of money (which is done before dispatch) and dispatch of goods.
The process may be depicted as under:
A. Visit of website :
Selection of a product
Selection of payment mode
1. Credit card
3. VP/courier (who collects the payment at the time of delivery, but this is discouraged.
4. Placement of order through e-mail
5. Realization of money.
Dispatch to the customer can be on line or through courier.
In order that consumer may visit particular website, sellers have to advertise about their website so that consumer may visit the website. The consumer decides which websites have to be visited and after getting the information from various sites he makes a choice and decides which one should be purchased. He then places an order intimating the mode of payment which is generally through credit card or e-banking and advise the bank where he has credit card to debit the amount to his account.
After the seller realizes the amount for the goods order he dispatches the goods. In most of the cases whole process takes couple of minutes and goods reaches the consumer within half an hour to one hour if he is a local consumer, it is claimed so by sellers. In India in this business Rediff(dot)com is most popular and sells products worth Rs. 1340 million every month.
Advantage to Consumers:
The consumer has number of advantages and convenience and therefore the system is becoming popular.
1. Consumer has wider choice not from his town or country but also round the globe unless there are import restrictions.
2. Customized or personalized product and service. For instance if some lady wants a bra of exact size, her size can be measured through internet and stored and she will be supplied bra of her requirement.
3. In case of purchase, one is not required to go from store to store to see the products to collect their details, prices etc. Sitting at home he gets all the required information and that too very fast without spending much time.
4. There is absolute flexibility of time, place and distance is no hurdle; one can open the site any time day or night to get details, there is no problem of shops/stores opening/closing hours. Website can be opened any time. In physical sales place and distance is also a problem which is no problem in e-commerce because one can see sites all over the world without moving out of the house.
5. Goods are available at cheaper price because there are lot of economies of space, rent, interest to the seller Further, he manages with much lesser number of outlets and cost of marketing is reduced. Part of these savings is passed on to consumer and therefore, he gets the products cheaper than from conventional shops/departmental stores, grocers etc.
6. It helps to globalize retail trading. One can buy things without geographical boundaries.
7. It eliminates with the system of distributors, authorized dealers and retailers, the manufacturer can deal with large territory with one store.
8. The inventory is reduced, and so the cost of carrying goods and distribution cost.
9. Exports to final consumers is possible through e-commerce, not only-just sales but procurement, accounts, logistics product development and other related services are also possible through e-commerce
10. The net enables suppliers to introduce and promote new markets and new products to meet the needs of individual buyers.
11. Long distance, travelling and delays, pollution all are avoided because one has not to travel to the shop.
12. Consumer is better informed about products, price etc and therefore can make better choice.
13. Suppliers, competitors and customers come under one roof through internet websites and massive exhibition of various items is possible.
1. The biggest disadvantage of e-commerce is that one is not able to see and feel the product.
2. Since consumers are not able to feel and touch the products and therefore business is on trust and as yet business is largely limited to travel, automobiles, PC’s, services, books and CD’s entertainment. As yet sales of apparel, food products is largely small percentage of total e-business. For instance in 1999 the maximum ownership of internet was 50 percent in USA, in other countries it varied between 1.8 percent to 45 percent (Table 20.2) But gradually this disadvantage is being reduced but still there is large percentage of population which does not own internet.
3. There is a big problem in on-line payment. It is with regard to time and legality of order to complete the transaction. As yet satisfactory system of payment has not been developed by banks and financial institutions in large number of countries.
4. The electronic signatures acceptance has been legalized by large number of countries but still many more have to take steps in this direction. Further, there are great chances of fraud in-spite of all the precautions.
5. The. e-commerce requires large investment to build a brand image on internet which is estimated around us$ 100 million or around Rs. 500 crores which can be invested only by big players. Thus small suppliers cannot get business through internet.
6. The market is restricted to high income and educated population who own and know the use of internet. Thus in poor, illiterate or less educated countries it has limited access.
7. Sometimes there could be flood of orders for any particular product which makes problem of timely supply to consumer. In 2000 there was YK2, problem and customers had to wait to get product of their choice.
8. Consumer has number of problems. He has to search internet/websites information on internet, make the purchase domain and the payment. There are difficulties in searching, surfing, browsing and wandering around the internet which costs both time and money.
9. Privacy of consumer is adversely affected specially in the matter of accounts; he is required to tell his credit card number to supplier or e-banker.
10. E-commerce is good for branded products like automobiles, electronic goods, computers, electrical goods, branded garments, branded food products, music, books etc. If middle class or lower middle class want to buy non branded products which are generally cheaper, they cannot be bought through e-commerce.
In other words e-commerce is for effluent society i.e. why population in USA use is 50%, in Europe 13 percentage, in poor countries only 1-2 percent and in some countries it is negligible. Thus e-commerce is for classes and not for masses.
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Home / Essay Samples / Business / Online Shopping / E-commerce and Online Selling: Trends and Challenges
E-commerce and Online Selling: Trends and Challenges
- Category: Business , Economics
- Topic: Competition , E Commerce , Online Shopping
Pages: 1 (661 words)
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Perceived effectiveness of e-commerce platforms (peep).
- Order fulfillment.
Competition against the marketplace, order fulfillment.
- Low Profit Margins
- Counterfeit Products
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