E-Commerce
E-commerce is a means of enabling and supporting the exchange of information, goods, and services between companies or between companies and their customers. It enables companies to be more efficient in their internal operations and more responsive to the needs and expectations of their customers. E-commerce technologies enable enterprises to exchange information instantaneously, eliminate pape work, and advertise their products and services to a global market. E-commerce is divided into two categories: business-to-consumer and business-to-business cot merce.
Business-to-Consumer Commerce
In business-to-consumer commerce, businesses create electronic storefronts that offer information, goods, and services to consumers. Internet “shopping malls” on the Web sell consumer goods ranging from cakes and wines to computers and cars.
Business-to-Business Commerce
Business-to-business commerce includes online wholesaling, in which businesses sell goods and services to other businesses on the Web. Business-to-business commerce is transacted by using Electronic Data Interchange (EDI) technologies. EDI defines the formats, data types, and routing instructions for the electronic exchange of business documents between companies’ computer systems.
Why Use E-Commerce?
Because the Internet provides a flexible and dynamic marketplace to exchange goods, services, and information with consumers and business partners, it is becon ing increasingly important for businesses to use the Internet to reach new market The greatest business advantage of being online is the ability to market products both locally and globally. The following list offers some reasons for companies to build commerce-enabled Web sites:
- Low entry costs: A company can establish itself on the Internet, and open for business, with a relatively small investment. Thousands of companies operate simple, inexpensive sites that are successful in their markets.
- Reduced transaction costs: Dealing with customers over the Web, whether to process orders or to attend to customer support, is cheaper than traditional marketing methods. For example, Dell Computer Corporation estimates that it saves eight dollars each time a customer checks the status of an order at the Dell Web site, instead of calling the company.
- Access to the global market: With a traditional business, the target market may be the local community or, with a higher advertising budget, it may extend to neighboring communities. The Web extends the reach of even the smallest businesses by allowing them to market products globally.
- Online distribution: The Web enables businesses to distribute data and software online.
- Secure market share: Getting a business online protects its current offline market share from being eroded by an online entrepreneur. If a business enters the e-commerce market too late, competitors who have already established a Web presence may make a successful market entry more difficult.
