E-Commerce

E-Commerce

E-Commerce stands for electronic commerce, which is commerce that is conducted electronically using computers, networks and the internet. Transactions take place through networks instead of in “brick and mortar” buildings or over the phone or through mail. E-commerce gained recognition starting in 1994 with the wide public acceptance and use of computers. There are four main types of e-commerce: 1. product transactions, also called e-tailing (electronic retailing), 2. service transactions such as online trading services, 3. auctions and 4. business-to-business transactions. There are numerous advantages to e-commerce as compared to conventional commerce such as convenience and time-effectiveness, from the removal of the necessity of travel, lower associated costs and comfort, from pressure-free consumption in the comfort of personal offices and homes. There are also disadvantages such as the need for a great deal of advertising investment in order to promote awareness of the presence on the network for sales and the fact that the number of products and services that are suitable for e-commerce is limited.

E-commerce is significant to professionals, business managers and leaders of the 21^st century as it is an emerging market that continues to grow. “E-commerce now makes up 1.9% of all U.S. retail sales. Economy.com Chief Economist Mark Zandi believes that e-commerce's piece of the retailing pie could double over the next four years.”¹ Professionals, business managers and leaders will be working towards capitalizing on the growing e-commerce market. E-commerce promises speed, convenience and round the clock access. The future for e-commerce is bright as its market is growing, however, it is unlikely to ever completely replace “brick and mortar” commerce for two main reasons. First, not all products are suited to e-commerce. For example, consumers prefer to test out certain products such as furniture. Also, furniture tends to be heavy and generally has a low value to weight ratio, which becomes important in considering shipping costs. Second, consumers often enjoy the social aspect of conventional commerce – human interaction.

E-commerce offers benefits of lower overhead and inventory costs as business owners are not required to set-up a store front nor hold inventory, facilitated through dropshipping where wholesalers ship directly to the consumers. However, an important lesson from the dot-com bust is that there is a significant advertising investment required to ensure public awareness of the network presence and in turn sales.

E-commerce can be divided into:

· E-tailing or "virtual storefronts" on Web sites with online catalogs, sometimes gathered into a "virtual mall"

· The gathering and use of demographic data through Web contacts

· Electronic Data Interchange (EDI), the business-to-business exchange of data e-mail and fax and their use as media for reaching prospects and established customers (for example, with newsletters)

· Business-to-business buying and selling (B2B)

Reference:

http://www.usatoday.com/tech/news/2003-12-22-shoppers_x.htm

http://www.export.gov/sellingonline/whatisecommerce.asp

1 http://www.businessweek.com/magazine/content/04_27/b3890449.htm

http://encarta.msn.com/text_701509010___0/Electronic_Commerce.html]

http://www.bodhost.com/web-hosting/index.php/2007/07/17/e-commerce/

http://www.marcbowles.com/sample_courses/amc/ec1/ec1_3.htm