ELECTRONIC COMMERCE

Unit I: INTRODUCTION 9 HOURS

Definition of Electronic Commerce, E-Commerce: technology and prospects, incentives for engaging in
electronic commerce, needs of E-Commerce, advantages and disadvantages, framework, Impact of E-
commerce on business, E-Commerce Models.

Unit II: NETWORK INFRASTRUCTURE FOR E- COMMERCE 9 HOURS

Internet and Intranet based E-commerce- Issues, problems and prospects, Network Infrastructure,
Network Access Equipments, Broadband telecommunication (ATM, ISDN, FRAME RELAY). Mobile
Commerce: Introduction, Wireless Application Protocol, WAP technology, Mobile Information device.

Unit III: WEB SECURITY 9 HOURS

Security Issues on web, Importance of Firewall, components of Firewall, Transaction security, Emerging
client server, Security Threats, Network Security, Factors to consider in Firewall design, Limitation of
Firewalls.

Unit IV: ENCRYPTION 9 HOURS

Encryption techniques, Symmetric Encryption: Keys and data encryption standard, Triple encryption,
Secret key encryption; Asymmetric encryption: public and private pair key encryption, Digital Signatures,
Virtual Private Network.

UNIT V: ELECTRONIC PAYMENTS 9 HOURS

Overview, The SET protocol, Payment Gateway, certificate, digital Tokens, Smart card, credit card,
magnetic strip card, E-Checks, Credit/Debit card based EPS, online Banking.EDI Application in business,
E- Commerce Law, Forms of Agreement, Govt. policies and Agenda.
 Unit I

1.1. Meaning of E-Commerce:

E-Commerce is defined as those commercial transactions carried out using the

Electronic means, in which goods Or services are delivered either electronically or
in their Tangible or intangible form.

Examples of E-Commerce:

(a) Online shopping:

Buying and selling goods on the internet is one of the most popular examples of Ecommerce.

(b) Electronic payments:

When we are buying goods online, there needs to be a mechanism to pay online too. That Is where the
payment Processors and payment gateways come into the picture. Electronic Payments reduce the
inefficiency associatedWith writing the Cheque books. It also does Away with many of the safety issues
that arise due to the payments Made in currency Notes.

1.2. Main difference between E-Business and E-Commerce :

E-BUSINESS

E-Business covers the online transactions, but Also extends to all the internet Based Transactions with the
business partners, Suppliers and customers like: Selling directly To the consumers, manufacturers and
suppliers; Monitoring and exchanging information; Auctioning surplus inventory; Collaborative Product
design. These online interactions are Aimed at improving Or transforming the Business processes and
efficiency. An E-Business status is Received when we handle E-Commerce refers to the online
transactions (i.e.) buying and selling of goods and/or Services over the internet. he business using phone
calls, E-Mail orders, Postal orders, and also the online activities.

E-Commerce

E-Commerce refers to The online transactions (i.e.) buying and selling Of goods and/or Services Over the
internet.
1.3. BENEFITS OF ELECTRONIC COMMERCE
E-Commerce has revolutionized the concept of conducting business by providing equal Chance to all the
business to mark their global presence. It has also eased the customers with online Shopping and easy
transactions. With the introduction of E-Commerce business, communication Has become effortless and
has also changed a lot in recent years for the better. Still, there are people Who think that conventional
business practices are far better than the Ecommerce business. The

Benefits of Electronic commerce is Classified in to three categories those are:

(a) Benefits of E-Commerce to Businesses

(b) Benefits of E-Commerce to Consumers
(c) enefits of E-Commerce to Society

Its brief explanation is as follows:

(a) Benefits of E-Commerce to Businesses:

It helps to reach Global: E-Commerce enabled business now have access to people all around the world.
InEffect all E-Commerce businesses have become virtual multinational corporations. E-Commerce
expands the Market place to national and international markets. Internal and web based E-Commerce
helps to reach a more Geographically dispersed customer base and more business partners as compared to
the traditional business Methods.

Cost effective: E-Commerce is proved to be highly cost effective for business concerns as it cuts down
the cost Of marketing, processing, inventory management, customer care etc. It also reduces the burden of
infrastructure Required for conducting business. It can also collect and manage the information related to
the customers Efficiently which in turn will assist the consumer in developing efficient promotional
strategy.

New Customers With Search Engine Visibility: Physical retail is driven by branding and relationships.
In Addition to these two drivers, online retail is also driven by traffic from search engines. It is not
unusual for Customers to follow a link in search engine results and land up on an ecommerce website that
they have never Heard of. This additional source of traffic can be the tipping point for some ecommerce
businesses.

It Reduces the Paper Costs: E-Commerce decreases the cost of creating, processing, distributing, storing
and Retrieving information through the use of FDI systems. This greatly cuts on the cost of paper work in
terms of The time taken and the man power required. Also the date is more secure from theft and
destruction.

Reduction in Inventories: A reduction in inventory is desirable to enable reduction in storage, handling,

Insurance and administrative costs. Internet E-Commerce can helps firms to reduce inventories by
electronically Linking the suppliers and buyers. The process starts from the customer orders and uses just-
in-time Manufacturing. Information on inventory levels and production rate is shared between
manufacturers and their Suppliers. Using such information, the delivery schedules are “fine turned” for
justin-time manufacturing, rather Than maintaining large inventories.

Mass Customization and Competitive advantage: The web based interactive Ecommerce Enables the
Customization of products/services as per the customer needs. This provides a Great competitive
advantage to Businesses. For example, an online travel agency may Customize the literary for a customer
who wishes to Travel abroad or a Computer manufacturer may be able to supply to customized PC to a
user.

No Middlemen: There is a direct contract with customers in E-Commerce through internet Without any
Intermediation. Companies can now focus more on specific customers by Adapting different one-to-one
Marketing strategy.

Reduced Production lead Time: The production cycle time is the time taken by a business To build a
product, Beginning with the design phase and ending with the completed product. The internet based E-
Commerce Enables the reduction of this cycle time by allowing the Production teams to electronically
share design Specifications and refinement processes. The reduction in the production cycle time helps to
reduce the fixed Overheads associated With each unit produced. This saving in the cost production can be
passed onto the customer Or may be used to achieve higher profits.

Improved Customer relationship: Customer service can be enhanced using the internet Based E-
Commerce By helping the customer to access information before, during and After a sale. Customers may
need to retrieve Information on product specifications and Pricing. On the status of an order or may need
online help in the Installation or use of a Product he has purchased. A prompt customer support service
can help businesses to earn Goodwill of customers in the long run.

Lower Sale and Marketing Costs: The internet allows businesses to reach many customers Globally at
lower
Costs. Thus by shifting the sale and marketing functions to the electronic Processes, the organizations can
bring Down greatly the marketing overheads. For example, Advertisements on the internet can cut down
the cost of Printing and mailing the pamphlets Or brochure. Any charge in product specifications in the
case of paper- based Advertisements may mean re-printing, how-ever in web based advertisement it may
mean Changes only in the Web site.

Lower Telecommunication Costs: The Internet is much cheaper than value added Networks (VANs)
which Were based on leasing telephone lines for the sole use of the Organization and its authorized
partners. It is also Cheaper to send a fax or e-mail via the Internet than direct dialling before the coming
internet, only few Organizations were using The private networks and VANs for their EDI. The cost of
installation and running These Systems was very high and beneficial only to the larger firms and enough
business volumes To justify the Cost.

New Found Business Partners: Internet based E-Commerce enables businesses to find New business
partners globally on the web, thus not restricting themselves to a specific Choice of suppliers.

Increased supply chain efficiencies: E-Commerce minimizes supply chain Inefficiencies, reduces
inventories, Reduces delivery delays.

Digitization of Products and Processes: Particularly in the case of software and Music/video products,
this Can be downloaded or e-mailed directly to customers via the Internet in digital or electronic format.
The internet Helps to expedite access to remote Information, thus adding speed to transactions and
processes.
Information sharing: It takes only few seconds to share information over the internet. A Firm can e-mail
its Customers relating new products and new offers and can solve their Product related quires and
welcome Suggestions.

Benefits of E-Commerce to Consumers:

Gives freedom to make choices: It also gives customers an opportunity to look for Cheaper and better
quality Products. With E-Commerce , consumers can search the Specific product or service they require
and can even Find the direct manufacturer from Where they can purchase products at comparatively less
price. Shopping Online is time Saving and convenient. In addition to it, consumers also get to see the
reviews of other Consumers That will help in making beneficial purchase decision.

Increase in variety of goods: As the market will expand the variety of goods available Will also expand.
Wide Variety of goods are available than ever before.

It gives more choice and alternatives: E-Commerce provides more choice and Alternatives to customers
that Will increase the choice of vendors or products because They are no longer geographically
constrained to reach a vendor or a product. A large Number of vendors/manufacturers are marketing and
selling their products/services on The internet. Virtual shops (e.g.Homeshop18, snapdeal, flipkart) can
offer the consumers alarge Number of products/services at a single site.

Convenience of Shopping at Home: allows the consumers to shop went it is convenient For them not
strictly During store hours. Also for handicapped or ill consumers, home Shopping on the internet
provides a lot of opportunity and convenience.

Ensure Secrecy: the various security measures that are in built are used in Ecommerce Transactions to
prevent Any unauthorised access to information on the internet for ensure secrecy they maintain
encoding, encryption and passwords.

More Competitive Prices and Increased Price comparison capabilities: The large Amount of
Information available on the internet is giving more and more power to the Consumers. Consumers can
make Comparison shopping. There are several online Services that allow customers to browse multiple
ecommerce Merchants and find the Best prices.

Access to Greater Amounts of Information on Demand: Consumers can have access to Large amount
of Information online on products and services, their features and prices. This further translates into more
choice to customers in shopping and greater price Comparison opportunities.

Time compression: Time is not a factor with Internet communication between firms And their
stakeholders. Online stores can be open 24/7; people can communicate as Their schedules permit; time
zones disappear for Managers collaborating with partners On other continents. Quick Delivery of
Digitized Products/Services: E-Commerce allows quick delivery In the case of digitized products such as
music, software etc.

Provide Comparison Shopping: Economic facilitates comparison shopping. There are Several online
services That allow customers to browse multiple ecommerce merchants And find the best prices.
E-payment system: The electronic payment system on the internet is facilitated by Payment gateways or
Intermediary between the business firm and customers and Between the business firms for assuring the
payments from the customers.

Benefits of E-Commerce to Society:

Enables More Flexible Working Practices: Which enhances the quality of life for a whole Host of
people in Society, enabling them to work from home. Not only is this more Convenient and provides
happier and less Stressful working environments. It also Potentially reduces environmental pollution a
fewer people have to Travel to work Regularly.

Connects People: Enables people in developing countries and rural areas to enjoy and Access products,
services, information and other people which otherwise would not be Easily available to them.

Facilitates Delivery of Public Services: The health services available over the Internet On-line
consultation with Doctors or nurses, filing taxes over the Internet through the Inland Revenue website.

1.4. Comparison of Traditional commerce and E-commerce:

Factor E-Commerce Traditional Commerce
Sales Channel Enterprise –Internet -Consumer Manufacturer-Wholesaler-
Retailer-Consumer
Sales timing /Region Entire world Restricted area
24X7 Restricted sales hour
Sales place/method Market space (Network) Market space (store)
Sale based on information Sale based on display
Customer Any acquisition through internet Market survey and salesman
Information Digital data without re-entry Require information re-entry
acquisition
Marketing activity Marketing via bi-directional One way marketing to consumer
communication
Customer support Real time support for customer Delayed support for customer
dissatisfaction. dissatisfaction.
Real time acquisition of Different time for catching
customer needs. customer needs.
Capital requirement Less High

1.5. Advantages and Disadvantages of E-Business:

Advantages of E – business
Save More:

The whole point of doing business online is to get things done more quickly, cheaply, and efficiently. The
aim is to accomplish more with less. As a consequence, you will conserve time, money, and effort as a
result. E-business also offers the benefit of reducing the amount of paper needed for forms and
streamlining the customer experience.
Real-time updates:

Many individuals think that communication is the key to surviving in the complex and quick-paced
commercial world. However, the speed with which information can be communicated is one of the
essential advantages of online business that many people need to be aware of. In today’s fast-paced
market, making decisions quickly is frequently essential to staying competitive. Electronic
communication is critical to e-business, enabling more rapid information transmission and timely
decision-making.

Virtual office:

Today’s office is more than just a desk. These days, offices might be virtual or located anywhere in the
world. The fast-paced climate of today, when choices must be taken instantly, necessitates using e-
business. It enables businesses to effectively connect by utilizing technology like email and the internet
while leveraging the Cloud for storage.

Better marketing:

Businesses have significantly benefited as online marketing becomes more common. Getting their
marketing for less is one of these advantages. As a result, buyers can pay lesser prices, which increases
sales. More control over their brand is another advantage of online marketing. Through social media,
businesses can manage how their brand is presented on numerous platforms, which has increased the
number of favorable customer evaluations and word-of-mouth recommendations for their products.

More revenue streams:

E-business offers several revenue streams. Many people have been successful in generating income using
the Internet. Affiliate marketing is typically the simplest method of earning money online. Creating an
account and promoting goods that can aid in driving traffic to your website are good ways to get started.
You will be compensated with a commission if customers purchase your product through your website.

More open and unrestricted:

The flexibility of e-business is the ability to launch your own company whenever you want, from
anywhere, in the comfort of your home. Get a domain name and website hosting, and begin adding your
artwork. The online e-commerce platform is also available to you. Additionally, e-Business is the current
mode of conducting business. It has wrought a great deal of change yet has much to offer. E-business is
currently the most affordable and quickly expanding type of business. Even as a replacement for
conventional advertising strategies, it has been considered.

Greater Reach than physical stores:

E-businesses can have many different forms, including those of small and large businesses. Because large
organizations can reach a vast audience through the Internet, it is growing in popularity with enterprises
of all sizes. These businesses are easily found by customers online, and the Internet has made it possible
for these firms to interact with a more extensive clientele. Companies that have websites not only have
the same access to consumers as physical businesses have, thanks to e-business but also have more
control over their operations.

Simple to Set Up:

It’s easy to launch an online business. If you have the hardware, software, and internet connectivity, you
can launch an online business while relaxing at home.

Cheaper than Traditional Business:

Traditional business is significantly more expensive than online company. On average, an e-enterprise
requires far more money to start than a conventional firm. Additionally, the transaction cost is lower.

No Geographical Restrictions:

E-business is not geographically constrained. Anyone can place an order at anytime from anywhere. One
advantage of doing business online is this.

Disadvantages of E-Business

No Personal Touch:

Small business owner suffers significantly from the immediacy of online connection. Online research is
quick for customers, but it takes a lot of effort to replace in-person connections. No one is there to assist
you when you are looking for the perfect product, for instance-whether it be the right size, color, or type.
Additionally, you cannot see or hear what others say about your goods. If a customer has a problem with
their item, they could have to wait days for a response rather than just returning it and speaking with
management.

Delivery or product/service is not fast:

Customers who wish to view a product or receive assistance from an e-Business may have to wait a long
time because these businesses might need to be more active. This is a significant issue when it comes to
buying. Customers might want to avoid hanging around and becoming impatient with inaction.
Additionally, lengthy product delivery delays are a huge deterrent.

Privacy violations and security issues:

Since there are few obstacles to entry, operating your business in this manner has many benefits. In
addition, we live in the Age of Information, when we may quickly and easily obtain any information. The
drawback of e-businesses is that only some can access them. Some people might require assistance to take
advantage of e-businesses because of the high cost of resources like Internet connections, computer
hardware and software, broadband internet service providers, and even cell phones.

Nobody can make a Purchase when a Website is Down:

The most significant disadvantage of online purchasing is that nobody can

The security dangers that e-business presents are its most significant negative. For instance, businesses
are increasingly concerned about the problem of cybercrime. Cybercriminals lure naïve victims using a
range of tactics One of their tactics is to produce a phony website that looks identical to the actual one.
They’ll offer a free trial or some other ploy to get consumers to click on it, and once they do, they’ll
hijack your account or steal your data.

Not accessible to all:

access your store if your website is down. As a result, be sure the platform hosting your website is
appropriate.
Innovation Pressure:

When you use an e-business strategy, you are exposed to a fiercely competitive global market where
thousands of other brands are likely to overshadow yours. Due to this situation, innovation is constantly
under pressure. You need to be creative if you want to draw and keep customers; otherwise, the
competition will outshine you. It would be advantageous if you innovated your supply chain to meet the
demands of your customers.

Handling Returns:

Product descriptions displayed on the screen are limited in length. Because of this, if the finished product
is different from what the buyer anticipated, they will return it Do you have the means to manage these
returned goods in your company? Can you handle all incoming requests for money back? These are things
to consider when starting an online business, especially if you plan to offer physical goods.

Shipping Times Can Be Lengthy:

According to customers, one of the significant problems with online purchasing is the shipment periods.
When purchasing anything in person, the customer can take it home immediately. However, most online
shoppers receive their items within a week.

Security Concerns and Privacy Violations:

One of the e-mail business’s drawbacks is, without a doubt, the security concerns that it introduces. For
instance, companies are increasingly worried about the problem of cybercrime. Cybercriminals use
several tactics to seduce naïve victims. One of their tactics is to build a phony website that looks identical
to the real one. Fraudsters may use a free trial offer or another trick to entice customers to click on it, and
once they do, they take over your account or steal your personal information.

1.6. Major categories of E-business

Some of the very important E-Commerce models are elaborately explained as follows:

1.6.1.Business – to – Business (B2B):

Business – to – Business (B2B) is a transaction that occurs between two companies, as opposed To a
transaction involving a consumer. This term may also describe a company that provides Goods or services
for another company. Business – to – Business (B2B) is a transaction that exists between businesses, such
as those Involving

• a manufacturer and wholesaler, or,

• a wholesaler and a retailer.

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.
Examples of B2B Model:

Let us take an example of www.amazon.com. As we know, www.flipkart.com is an online Store that sells
various products from various companies. Assume that the skyward Publishers want to sell the books
online. In this case, the publishers have the option of Either developing their own site or displaying their
books on the Amazon site (www.flipkart.com), or both. The publishers mainly choose to display their
books on www.flikart.com at it gives them a larger audience. Do Now, to do this, the publishers need to
transact with flipkart, involving business houses on the both the ends, is the B2B model.

The impact of B2B markets on the economy:

B2B E-Commerce have a significant impact on the economy as they help to lower various Cost involved
in business transactions. There are the cost areas that are significantly reduced

Through the conduct of B2B E-Commerce :

(a) Search costs:

Buyers need not go through intermediaries to search for information about suppliers, products And prices
as in a traditional supply chain. Internet is more efficient information channel then Its traditional
counterpart. So effort, time and money can be saved. In B2B, buyers and sellers Are gathered together
into a single online trading community and reducing search cost even Further.

(b )Processing cost:

Reduction in the costs of processing transactions (e.g. invoices, purchase orders and payment Schemes),
as B2B allows for the automation of transaction processes and therefore the quick Implementation of the
same compared to telephone and fax.

(C) Avoid intermediaries:

Through B2B e-markets, suppliers are able to interact and transact directly with buyers there By
eliminating intermediaries and distributors.

(a) Transparency in pricing:

The gathering of a large number of buyers and sellers in a single e-market reveals market price
Information and transactions processing to participants. Thus increases the price transparency.

Advantages and Disadvantages of B2B Model

Advantages:

• It can efficiently maintain the moment of the supply chain and the manufacturing and Procuring
processes.
• It can automate corporate processes to deliver the right products and services quickly And cost-
effectively.
• B2B is global trade market, where we can but anything at anytime.
• Creates new sales opportunities
• It lowers the search cost and time for buyers to find products and vendors
Disadvantage:

• Delay of goods where the earliest to receive goods would be the next day
• Some goods cannot be purchased online such as perishable items
• Enable to experience the product before purchasing
• Fraudulent websites and scams
• Security issues leading to credit card fraud or identity theft

1.6.2.Business – to – Consumer(B2C):

Business – to – Consumer(B2C) is a transaction in which the businesses sells their products Or services to
the consumers directly. It refers to the online online selling of products, or, e-tailing, in which the
manufacturers or retailers sell their products directly to the consumers over the internet. Website
following B2C business model sells its product directly to a customer. A customer canView 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.
Business2consumer (B2C) :Online transactions are made between businesses and individual consumers e-
Tailing (online retailing)

Examples: amazon.com, dell.com

Examples of B2C Model

• The example of the www.flipkart.com site also involves the B2C model in which the Consumer searches
fo a book on their site and places an order, if required. This implies That a complete business solution
might be an integration solution of more than one Business model. For example, www.flipkart.com
includes the B2B model in which the Publishers transact with flipkart and the B2C model in which an
individual consumer Transact with the business organization.

Key features of a B2C model:

• Heavy advertising required to attract large number of customers.

• High investment in terms of hardware/ software.
• Support or good customer care service.
• Consumer Shopping Procedure Steps used in B2C E-Commerce :

Types of B2C:

Different types of B2C Ecommerce are: direct sellers, online intermediaries, advertisingbased Models,
community-based models and fee-based models. Each type is so different from the Other that they are not
directly comparable. Some B2C businesses utilize more than one type To reach different audiences.

Type of B2C Description

(a) Direct Sellers Direct sellers, such as online retailers, sell a product or service directly to the
Customer via a website. Direct sellers are divided into e-tailers and manufacturers. Etailers Are
electronic retailers that either ship products from other their own warehouses or trigger Deliveries
from other companies Product manufacturers use the Internet as a catalog and Sales channel to
eliminate intermediaries.
 (b) Online Intermediaries Online intermediaries perform the same function as any other Broker. The
business allows non-B2C companies to reap some Altering the price-setting Processes. Of the
benefits. Brokers offer buyers a service and help by Advantages and Disadvantages of B2C
Model:

Advantages:

1) Advantages for the Business:

• It can reach worldwide market with unlimited volume of customers.

• It can display information, pictures, and prices of products or services without spending
A fortune on colourful advertisements.
• Order processing an easier task than before.
• It can operate on decreased, little, or even no overhead.

2) Advantages for the Consumers:

• Convenience: Consumers can shop at any time of day, from the privacy of their own Home. Internet
shopping can be done at time either day or night.
• Many choice: Consumers is offered many choices for the same products under various Brands
• Less Hassle: Consumers can shop online without hassles like traffic, congestion of the Malls etc.

Disadvantages:

1) Disadvantages for the Business:

• Many websites offering the same product to the customers

• Technological problems can cause the website to not operate properly thereby Loosing the
customer.People are hesitant to enter the credit card details if the website does not have proper Security
norms.

2) Disadvantages for the consumer:

• Security issues, especially credit card information which is very sensitive. Fraud, rip-offs are very
common on the web.
• Customer service may not be satisfactory for the consumers.

1.6.3.Consumer – to – Consumer (C2C):

C2C, or customer-to-customer, or consumer-to-consumer, is a business model that facilitates the

Transaction of products or services between customers. An example of C2C would be the classifieds
section of newspaper, or an auction. In both of these Cases, a customer, not a business, sells goods or
services to another customer. The goal of a C2C Is to enable this relationship, helping buyers and sellers
locate each other. Customers can benefit
From the competition for products and easily find products that may otherwise be difficult to locate.
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. Consumer-to-consumer (C2C) Consumers sell directly
to other consumers
Example of Consumer to Consumer (C2C) Model

Let us take an example of E-Bay. When a customer plan to sell his products to other customers on The
Website of E-Bay, he first needs to interact with an E-Bay site, which in this case acts as a Facilitator of
the overall transaction. Then, the seller can host his product on www.E-Bay.in which In turn charges him
for this. Any buyer can now browse the site of E-Bay to search for the product he interested in. If the
buyer Comes across such a product, he places an order for the same on the Web site of E-Bay. EBay now
Purchase the product from the seller and then, sells it to the buyer. In this way, though the Transaction is
between two customers, an organization acts as an interface between the two Organizations.

Key features of a C2C model:

Consumers interact directly with other consumers. They exchange information such as :

• Expert knowledge where one person asks a question about anything and gets an Email reply from the
community of other individuals.

• Opinions about companies and products There is also an exchange of goods between people both with
consumer auction sites such As e-bay, swapitshop.com, where individuals swap goods with each other
without the Exchange of money.

Advantages and disadvantages of C2C Model:

Advantages:

• Customers can directly contact sellers and eliminate the middle man.
• Anyone can now sell and advertise a product in the convenience of one’s home.
• Sellers can reach both national and international customers and greatly increase their Market.
• Feedback on the purchased product helps both the seller and potential customers.
• The transactions occur at a swift rate with the use of online payments systems such as Paypal.

Disadvantages

• Although online auctions allow one to display his or her products, there is often a fee Associated with
such exhibitions. Other times, websites may charge a commission when Products are sold. With the
growing use of online auctions, the number of internet-related Auction frauds has also increased.

• Identity theft has become a rising issue. Scam artists often create sites with popular domain Names such
as “e bay “ in order to attract unknowing E-Bay customers. These sites will Ask for personal information
including credit card numbers. Numerous cases have been Documented in which users find unknown
charges on their credit card statements and Withdrawals in their bank statements after purchasing
something online.
Illegal or restricted products and services have been found on auction sites. Anything from Illegal drugs,
pirated works have appeared on such sites.

1.6.4.Consumer – to – Business (C2B):

Definition of Consumer to Business (C2B):

Consumer to business E-Commerce refers to the transactions taking place between consumers to Business
organisations. The C2B model completely transposes the traditional business-to consumer (B2C) model,
where a business produces services and products for consumer consumption. Customer to business (C2B),
sometimes known as Consumer to Business is the most recent Ecommerce business model. In this model,
individual customers offer to sell products and Services to companies who are prepared to purchase them.
This business model is the opposite of The traditional B2C model. The idea is that the individual/end user
provides a product or service That the business can use to complete a business process or gain
competitive advantage. In this model, a consumer approaches website showing multiple business
organizations for a Particular service. Consumer places an estimate of amount he/she wants to spend for a
particular Service. For example, comparison of interest rates of personal loan/ car loan provided by
various Banks via website. Business organization that fulfils the consumer’s requirement within specified
Budget approaches the customer and provides its services. Consumer2business (C2B) Individuals use the
Internet to sell products or services to organizations The C2B model involves a transaction that is
conducted between a consumer and a business Organization. It is similar to the B2C model, however, the
difference is that in this a case the Consumer is the seller and the business organisation is the buyer. In
this kind of a transaction, the Consumers decide the price of a particular product rather than the supplier.
This category includes Individuals who sell products and services to organisations. In the C2B model, a
consumer Provides a business with a fee-based opportunity to market a product or service on the
consumer’s Website or blog. In this type of relationship, a website owner is paid to review the product or
service Through blog posts, videos or podcasts. In most cases, paid advertisement space is also available
On the consumer website. For the C2B relationship to be fulfilled, the players must be clearly defined.
The consumer could Be any individual who has something to offer a business, either a service or a good.

Example of C2B Model:

There are only a few kinds of companies whose trading models could be considered as C2B.

• Online Advertising sites like Google Ad sense, affiliation platforms like Commission Junction and
affiliation programs like Amazon are the best examples of C2B schemes. Individuals can display
advertising banners, contextual text ads or any other promotional Items on their personal websites.
Individuals are directly commissioned to provide an Advertising/selling service to companies.

• Online surveys (GozingSurveys, Surveyscout, and Survey Monkey) are also typical C2B Models.
Individuals offer the service to reply to the company’s survey and companies pay Individual for this
service.

Key features of a C2B model:

Exchange of products, information or services are from individuals to business. A classic example Of this
would be individuals selling their services to businesses.

Steps involved in C2B model:

• Consumer approaches website showing multiple business organisations for a particular Service.
Consumer places an estimate of amount he/she wants to spend for a particular Service.

• Business organisation who fulfils the consumer’s requirement within specified budget Approaches the
customer and provides its services..

Example: Comparison of interest rates of personal loan/ car loan provided by various banks Via website.

1.7. Electronic Commerce Framework:

• E-Commerce application will be built on the existing technology infrastructure –A myriad of computer
Communication networks Communication software forming Information super highway. Building blocks
of the infrastructure:

Common business services for facilitating the buying and selling process

• Messaging & information distribution as a means of sending and retrieving information

• Multimedia content & network publishing, for creating a product &
a means to communicate about it
• The information superhighway- the very foundation-for providing the high way system along which all
e-commerce must travel

The two pillars supporting all e-commerce applications & infrastructure

1. Public policy to govern issues such as universal access,privacy and information pricing.
2. Technical standards to dictate the nature of information publishing ,user interfaces and transport
in the interest of compatibility across the entire network Any successful e-commerce will require
the I-way infrastructure in the same way that regular commerce needs interstate highway network
to carry goods from one point to another I-way will be a mesh of interconnected data highways of
many forms Telephone,wires,cable TV wire Radio-based wireless-cellular & satellite

Movies=video + audio
Digital games=music + video + software
Electronic books=text + data + graphics + music + photographs + video

 In the electronic ‗highway system‘ multimedia content is stores in the for of electronic
documents
 These are often digitized
 On the I-way messaging software fulfills the role, in any no. of forms: email, EDI, or point-to-
point file transfersEncryption & authentication methods to ensure security
 Electronic payment schemes developed to handle complex transactionsThese logistics issues are
difficult in long-established transportation.