What is eCommerce?
By Gopinath Gandhavadi
eCommerce (or e-commerce) consists of buying and selling
products and services over the Internet, as opposed to the traditional business practices. It can be a subset of your
e-business strategy, or it can be simply used to add revenue streams to a
standard business.
Many companies purchase parts and supplies through
business-to-business (B2B) e-commerce before selling finished products to
customers with business-to-consumer (B2C) e-commerce. Individuals also often
purchase goods and hire services online.
Selling goods online usually requires a website with a
shopping cart function. To a degree, e-commerce is similar to catalog sales,
where the customer only sees specifications and perhaps pictures before making
an online purchase. The online seller must have a way to process payments online
and deliver the goods or Collect cash while delivering the goods(Cash on Delivery).
Many businesses have become extremely profitable through
online sales. Dell Computers is a prime example. Small companies and even
individuals can also market their products or services on a worldwide basis
through e-commerce. Large companies can reduce sales and stocking costs by
selling online.
Questions you may have include:
What are the
elements of e-commerce?
What are the
advantages and disadvantages of e-commerce?
How can a business
get set up to sell online?
This lesson will answer those questions.
Buying online
Companies and individuals use e-commerce to make online
purchases. This be especially convenient if the seller is at a great distance
from the buyer. Also, prices are often lower when purchasing online, since the
business does not need to maintain a physical store.
Companies
In e-commerce, companies can access the websites of
suppliers to order parts or services. This is called business-to-business (B2B)
e-commerce.
For example, a
company making electrical fixtures may purchase quantities of wiring and
switches from online vendors. This purchases faster and often reduces
costs.
If the company has an account with the supplier, a bill may
be sent at a later time, or the transaction can be completed electronically
with a company credit card or Internet Banking.
They will then make arrangements for the delivery of the
goods.
Advertising space
Many companies purchase online advertising space as part of
their marketing campaign. The purchase is a form of e-commerce, and the
campaign may be part of the company's e-marketing strategy.
In purchasing
Google Adwords, a company pays for clicks on ads being displayed on various
websites. Adwords is an e-commerce service that the company purchases.
Individuals
Individuals also use e-commerce to purchase items or
services online.
Many people buy
things through eBay or Amazon.com, as well as other companies. They may also
hire a local plumber through his website.
Payment is done by credit card and delivery is usually by
the Postal Service or shipping companies such as Bluedart or DTDC.
Selling online
A business doing e-commerce sales must have a website that
includes an online catalog or store. It must be the capability to receive
payments. Finally, the business needs a way to deliver the product or service.
Website promotion
In order to sell products online, a company needs a website.
They also need to perform e-marketing to drive people to their site.
You need to advertise and promote your business, so that the
customers will either come to your store, read your catalog or view your Web
site.
Online catalog or store
You need to have a store or catalog where customers can view
and select goods or services. Customers need to be able to easily get around
your catalog to find things. The customer should be able to easily browse the
selection and mark products for later purchase. They also need to be able to
information or see pictures of the items.
The Web site should be easy for customers to find what they
want. The customer must know what is in the store, and the products must be
organized in a logical manner.
The customer must be able to easily search for what he or
she wants without the help of a sales clerk.
Selecting what to buy
Once the customer finds what he is looking for, he can put
the selection in a "shopping cart" and search for other items. This
make it easier for the customer to purchase multiple items, as well as to buy
things he may not have been looking for.
Just as in a physical store, people often buy things they
just happen to see. For example, stores place some "impulse items" at
the checkout stand.
Taking orders
If the company is selling B2B, orders are often made via
email. If the company is selling to individuals, their website usually includes
a shopping cart feature.
After making an electronic transaction, they then deliver
the good to the customer.
Purchase
It should be easy for customers to purchase the items they
want. You must have a way to receive online payments, either using credit cards
or other means of payment. For example, business-to-business sales may simply
involve a purchase order.
The purchase of the item can be complex, but it should be
made as simple as possible for the customer.
The customer must
give certain information about himself. Usually this is name, address and
e-mail.
A mutually
acceptable payment method must be chosen. Credit card or billing information
must be gathered.
The merchant must
process the customer's payment information.
Finally, the
customer must receive confirmation of the sale.
Security is a concern in Online payment purchases and the
ability to encrypt transfer of data
Completing transaction
In both online buying and selling, there must be a way to
send and receive payments, deliver the goods and provide any needed support.
Payments
Companies may pay for goods purchased through Electronic
Funds Transfer (EFT) or similar method of electronic payment for online
transactions, such as a form of Electronic Data Interchange (EDI).
Small companies and individuals typically send and receive
payments with credit or debit cards, often through some service like PayPal.
Now a day, Companies are using Cash on Delivery Option to receive payment,whereby logistics company collects payment while delivering goods.
Delivery
You must have a good means of fulfilling the order and
delivering the material to customers. Different means of delivery depends on
the type of item purchased.
The product may be access to special information on the Web
site, it may be downloadable software, or it may be items that must be
physically delivered to the customer.
Support
The customer needs a way to voice problems. You also need a
customer service system, consisting of support to handle complaints or returns
in the event of problems.
Summary
Online commerce is similar to the mail order business,
except that it has potential for worldwide markets. You must not only promote
your Web site, but you must also make it easy to find, select and purchase the
items. Delivery and support issues are similar to that in mail order.
To set up your own online store, you can either purchase
e-commerce software or have your capabilities custom programmed.
Today e-commerce business increasing day by day. I used EDI Services for data exchange. What technique you are using?
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