UNIT-I

Introduction to E-Commerce
E-Commerce – Meaning, Nature, Concepts:
E-Commerce stands for electronic commerce and caters to exchange (buy or sell) of products,
services and information via internet. It is “doing business online”. It includes any commercial activity
that takes place directly between a business, its partners, or its customers through electronic
communication and digital information processing technology.

E-Commerce offers an opportunity for performing profitable activities online. It facilitates

cooperation between different groups:

(a) Businesses sharing information to improve customer relations

(b) Organization working together to design and build new products /services;

(c) Multinational company sharing information for a major marketing campaign.

The introduction of E-Commerce has seen a remarkable impact on the traditional ways of doing
business. It has brought producers and consumers closer together, increased profitability by eliminating
many of the costs previously encountered.

Electronic commerce is the application of communication and information sharing technologies

among trading partners to the pursuit of business objectives. Key element of E-Commerce is information
processing. The effects of e-commerce are already appearing in all areas of business, from customer
service to new product design. It facilitates modern types of information based business strategy for
reaching and interacting with customers such as online banking, online shopping, online advertising and
marketing, on line – order taking and on-line customer service etc.

It reduce costs in managing orders and interacting with a wide range of suppliers and trading
partners , areas that typically add significant overhead to the cost of products and services . also E-
commerce enables the formation of new types of information – based products such as interactive
games , electronic books ,and information –on demand that can be very profitable for content providers
and useful for consumers .

So, E-Commerce is about doing business electronically and encompasses many diverse
activities both in the business – to –business market and in the business – to- consumer market.
Activities include electronic trading of goods and services , online delivery of digital
content ,electronic fund transfers, electronic share trading , commercial auctions collaborative design
and engineering, online sourcing , public procurement, direct consumer marketing, and after –sales
service. It involves both products (e.g. Consumer goods) and services (e.g. information services,
financial and legal services)

E-commerce is not limited to the internet alone electronic transactions such as discussing
business over the telephone , sending a fax , withdrawing money from an ATM machine , sending a
text message confirming purchase (or) payment through cellular phone , paying for groceries using a
credit card , ordering a birth certificate over the internet , among others , are different examples of e -
commerce .

Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply
chain management, internet marketing, online transaction processing, electronic data interchange (EDI),
inventory management systems, and automated data collection systems.

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Advantages of E-Commerce:
E-commerce is one of the most important facts of the internet to have emerged in the recent times.
It involves carrying out business over the internet with the assistances of computers, which are linked to
each other forming a network.

E-commerce offers many potential benefits to organizations as well as customers. For many
businesses, e- commerce is becoming the only option, as companies become increasingly interested in
expanding their online operations. Here, we are bringing you some of the benefits of e- commerce that
will make you aware of the certain aspects of this new trend of conducting business.

The invention of faster internet connectivity and powerful online tools has resulted in a new commerce
arena – Ecommerce. Ecommerce offered many advantages to companies and customers but it also caused
many problems.

Advantages of E-commerce to organization / business:

 Global Accessibility : The business gains access to a worldwide market instead of being
limited to a certain geographical area which gives it the advantage of a broader customer base
and potential increase in sales.
 24 –hour Availability: It can help organizations do business 7 days a week and 24 hours a
day. The time restrictions are non-existent while conducting business ,as e-commerce empowers
one to execute business transactions 24 hours a day and even on holidays and weekends . This in
turn significantly increases sales and profit.
 Increase profits: Allowing customers to shop for the convenience and comfort of their own
homes at any time of the day or night can increase your sales and potentially your profits while
decreasing costs for your business.
 Lower costs: One of the most tangible benefits of ecommerce is the lowered cost. A part of
these lowered costs could be passed on to customers in the form of discounted prices.
 Lower transaction costs: It cut the costs on areas like documents preparation, error detection
and correction, reconciliation, mail order catalogs, phone calls, data entry and supervision
expenses.
 Lower advertising and marketing costs: E-commerce can reduce advertising and
marketing costs because it is easier to update the advertisement using software technology. The
software technology is an inexpensive advertising medium for organizations, that allows
organizations an opportunity for publicizing their products and services at minimal cost.
 Lower labour costs: The automation of checkout, billing, payments, inventory managements,
and other operational processes, lowers the number of employees required to run an ecommerce
setup.
 Lower communication cost: Most communication costs can be significantly reduced with a
combination of email, other internet tools, phone answering machines, voice response systems,
call diversion and mobiles.
 Lower inventory management costs: With e-commerce, the suppliers can reduce costs to
manage their inventory of goods because they can automate the inventory management using web-
based management systems. The method indirectly can save their operational costs.
 No infrastructure cost: It also eliminates the cost and burden of infrastructure required for
conducting business. An ecommerce merchant does not need a prominent physical location. The
overhead costs to build the physical store front may be prevented to the suppliers who use e-
commerce as their business operation.
 Reduce labour costs: The labour costs can be reduced with e-commerce because the sellers
can automate their online store fronts.
 Customer Satisfaction: The accessibility and convenience of online transactions for the
customers is leading to increased customer image ,word communication facilities not only saves
money and provides greater responsiveness, but can facilitate better supplier , customer and
staff relationships, because it can be used more often ,much more readily and can provide so
much more information at no cost.
 Time saving: It reduces the time period involved with business process re- engineering,
customization of products to meet the demand of particular customers , increasing productivity
and customer care service .
 Create market for niche products: E -Commerce is ideal for niche products. Customers
for such products are usually few. Buyers and sellers of niche products can find it difficult to
locate each other in the physical world. But in the vast market place i.e. the internet, even niche
products could generate viable volumes.
 Target market segmentation: It allows the flexibility to target market segmentation,
allowing companies to focus on a select group of clients with a competitive advantage by giving
them what they want and the satisfaction of unique needs.
 New markets and business partners: E-commerce helps expand in to new markets by
virtue of its global reach. It helps organizations to gather and compile market intelligence
regarding general customers, suppliers and customers. It enables organizations to find new
business partners globally, thus not restricting to limited choice of suppliers. It allows the
organization to capture and leverage customer intelligence to direct marketing, purchasing
warehousing, delivery and pricing strategies and ultimately result in increased revenues. It enables
the organization to react quickly to new opportunities. Hence it provides significant competitive
advantage.
 Flexibility for adding and changing resources : For every organization , e- commerce
software allows business processes to be integrated in such a way that the resulting system can
deliver accurate, reliable information in real time. It allows the flexibility for adding and
changing resources. this flexibility enables the organization to react quickly to new
opportunities , reduce time to market , reduce cost and risk and better serve its customers. The
net result is a significant competitive advantage.
 Improved customer interaction: Keeping clients happy has now become much more
economical for the companies through their websites. By putting information on frequently
asked questions on their website, organizations are saving costs by reducing the number of
 customer service representatives . Moreover, the organization can get immediate feedback on
prices, features etc.
 Easy delivery of information: Having an e-commerce website that is user friendly and
available to vast number of clients is also helpful because it provides easier delivery of
information. Rather than calling to find our store hours or more information about your company,
your catalogue software can display information, promotions, sales and real- time data on your
products or services.
 Faster access to information: E-Commerce provides organizations with the ability to
quickly share information with business partners and customers.
 Improved competitiveness: E-commerce enables organizations to improve competitiveness
by becoming closer to the customer. For example, many companies are employing electronic
commerce technology to improve levels of support both before and after the transaction. They
can also increase the amount of product information through the internet. And finally, companies
utilizing the internet can also respond to customer inquiries more quickly and effectively. This
benefits not only the business, but also the quality of service for the customer.

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Disadvantages of E-Commerce:
1. Any one, good or bad, can easily start a business. And there are many bad sites which eat up
customers’ money.
2. There is no guarantee of product quality.
3. Mechanical failures can cause unpredictable effects on the total processes.
4. As there is minimum chance of direct customer to company interactions, customer loyalty is always on
a check.
5. There are many hackers who look for opportunities, and thus an ecommerce site, service, payment
gateways; all are always prone to attack.

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Reasons for Transacting Online:
 Credit Cards to Facilitates Low Balance Purchases
Customers can use their credit cards to make payments, even though they don’t
have money in their bank account. More importantly, you can break down the payment
into several installments, if you are selling expensive items. And one can use credit cards
to pay for the purchases in installments.

 Instant Payment: Online payments facilitate instant payments for an organization. It

breaks the geographical restrictions and let customers purchase even without physical
presence. One can easily make a payment sitting comfortably at home or office. The
gateway to accept payment online provides the instant notification of the transaction that
makes the customer remain assured of the purchased items.
  They give consumers more time: Online payments aren’t just convenient in the sense of
transaction speed — they eliminate the need for consumers to travel to a store, invest their
time, and wait in line to pay.
 Convenience: There is an ability to shop at anytime, anywhere.
Without going out have capacity to research products, compare prices, can search exact
product we are searching for and can save our time, money and fuel.
 Selection: Large number of options and capacity to easy comparison available in online
shopping.
 Exchange & Returning: If we want to exchange or return some product we have to wait
until shop is opening. But exchange or return in online shopping we can be done almost
anytime we wish.
 Comfort: Everything delivered at your doorsteps without you even stepping outside your
home in online shopping.
 Discount shopping: With the raising competition websites offer gift certificates, discount
coupons, shopping points, cash back and what not to tap in potential customers. Those are
benefitted to customers.
 Comparison shopping: Online shopping enables us to do instant comparison view user
ratings, read reviews, and make uniform and rational buying decisions.
With that we get a chance to explore all the positives and negatives of a certain
product or a service.
 They provide an additional layer of purchase protection :Buying from a small
business, whether in person or online requires that customers establish some degree of
trust with a merchant with whom they may have no previous experience. Regardless of
how clearly a business communicates its return, exchange, and customer satisfaction
policies, there may be a sense of hesitancy for consumers. Online payments can overcome
this obstacle. When online payments are made using a credit card that guarantees the
lowest price for a stated number of days, extends manufacturer warranties, and offers a
cardholder the right to dispute a purchase.
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Types of E-Commerce Business Models:
E-commerce business models can generally be categorized into the following categories.

1. Business - to - Business (B2B)

2. Business - to - Consumer (B2C)
3. Consumer - to - Consumer (C2C)
4. Consumer - to - Business (C2B)
5. Business - to - Government (B2G)
6. Government - to - Business (G2B)
7. Government - to - Citizen (G2C)

1. Business - to - Business
A website following the B2B business model sells its products 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 the final
customer who comes to buy the product at one of its retail outlets.

2. Business - to – Consumer:
A website following the B2C business model sells its products directly to a customer. A
customer can view the products shown on the website. The customer can choose a product and
order the same. The website will then send a notification to the business organization via email
and the organization will dispatch the product/goods to the customer.

3. Consumer - to –
Consumer:
A website following the C2C business model helps consumers 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 – Business:
In this model, a consumer approaches a website showing multiple business organizations
for a particular service. The consumer places an estimate of amount he/she wants to spend for a
particular service. For example, the comparison of interest rates of personal loan/car loan
provided by various banks via websites. A business organization that fulfills the consumer's
requirement within the specified budget approaches the customer and provides its services.

4. Business -
to – Government:
B2G model is a variant of B2B model. Such websites are used by governments to trade
and exchange information with various business organizations. Such websites are
accredited by the government and provide a medium to businesses to submit application
forms to the government.

5.

Government - to – Business:
Governments use B2G model websites to approach business organizations. Such
websites support auctions, tenders, and application submission functionalities.
 7. Government - to – Citizen:
Governments use G2C model websites to approach citizen in general. Such websites
support auctions of vehicles, machinery, or any other material. Such website also provides
services like registration for birth, marriage or death certificates. The main objective of G2C
websites is to reduce the average time for fulfilling citizen’s requests for various government
services.

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Key Elements of a Business Model:
What is a Business Model?
Business Model (BM) stands for a conceptual tool that contains a set of elements and
their relationships and allows expressing the business logic of a specific firm. Business design is
totally of how a company selects its customers, defines and differentiates its offerings, defines the
tasks it will perform itself and those it will outsource, configures its resources, goes to market,
creates utility for customers, and captures profit. It is the entire system for delivering utility to
customers and earning a profit from that activity.

1. Revenue Model:
This is describes how a company plans to make money from its business because
earning revenue and produce a superior return on invested capital is the primary objective
of a company. For example, the 5 major e-commerce revenue models include advertising
revenue model, subscription revenue model, transaction fee revenue model, sales revenue
model, affiliate revenue model.

2. Value Proposition:
This is describes how a company’s product or service fulfills the needs of
customers and why a customer would buy from the company. For example, a successful
value proposition must include personalization, customization, reduction of product
search, price discovery costs and facilitation of transactions by managing product delivery.
3. Market Opportunity:
Refers to a company’s intended market space and the overall potential financial
opportunities available to the firm in that market place
 4. Market Strategy
Plan that details how a company intends to enter a new market and attract strategy
5. Organizational Development:
Describes how the company will organize the work that needs to be accomplished
6. Management Team:
 Employees of the company responsible for making the business model work
 Strong management team gives instant credibility to outside investors
 There are many types of e-commerce business models let’s take a look at all of
them and what are the difference
7. Competitive Advantage
Achieved when a firm can produce a superior product and/or bring a product to
market, at a lower price than most, or all, of their competitors
8. Competitive Environment

Refers to the other competition selling similar products and operating in thesame
market space influenced by

 How many competitors are active

 How large operations are
 The market share for each competitor
 How profitable these firms are
 How they price their product
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Types of E-Business Revenue Model

1. Sales Revenue Model

The most common of all eCommerce revenue models, here profits are achieved by selling
products or providing services online versus, or in addition to, brick-and-mortar stores. Any
business selling items through the internet, regardless of their business model, is following the
sales revenue model. While they may have other revenue streams, this tends to be their bread-
and-butter.
2. Advertising Revenue Model
Is Bob’s Bait & Tackle ever going to get the type of traffic as, say, Facebook or Google? Of
course not. But they can advertise on those sites! The advertising revenue model is when popular
platforms allow others to advertise with them for a fee. Media sites, such as magazines,
newspapers, and TV channels also frequently use this model. While they may charge a flat fee for
advertising, generally cost is based on pay-per-click (PPC), which is the number of people who
click on the ad.
3 Subscription Revenue Model
When it comes to the subscription revenue model, a lot of people think of Netflix or Spotify.
However, there are also many popular subscriptions box brands like Bark Box, Hello Fresh, Ipsy,
and Harry’s. Regardless of the offering, with this model users are charged a recurring fee
(monthly or annual) for using services or having existing products replenished and delivered
regularly. Today, there are an estimated 7,000 subscription box services operating globally!
4. Transaction Fee Revenue Model
This model charges a fee every time a transaction is made through their platform. For example,
eBay charges sellers a fee whenever an item is sold; PayPal charges users a fee for transferring
money; eTrade gains a transaction fee whenever a stock is sold; and so on. While fees tend to be
minimal, if people are making thousands of transactions per day, the revenue can be substantial!
5. Affiliate Revenue Model
Last but not least is affiliate marketing. With this model, businesses earn revenue just by
promoting and selling another person’s (or company’s) product on their site (as opposed to the
advertising revenue model, which doesn’t allow for purchase on the host’s site). The concept of
affiliate marketing is based on revenue sharing. If a business has a product and wants to earn
more, you can promote complementary products or services of another company that will, in turn,
pay you for your referrals. It’s a win-win for both parties; the affiliate gains a new, passive
revenue stream, and the merchant gains new customers!
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Forces Behind E-Commerce:

1. E-commerce enables businesses to interact with suppliers, customers and with players in
the distribution channel at a lower cost.
2. The cost of installing and maintaining a website is much cheaper than owning a physical store.
This motivates the growth of e-commerce.
 3. E-commerce generates greater profits due to less human intervention, lower overhead cost, few
clerical errors and more efficiency.
4. The cost of advertising is cheaper and provides access to global market at low cost. This is
something which encourages people engaged in business to promote their business through
electronic medium.
5. Reduction in communication cost and technological infrastructure expense drive business towards
e-business.
6. Increase in competition and the rise in consumer power, ‘globalization wave’ have forced the
business organizations to penetrate into internet world.

Technological forces that drives electronic commerce:

1. Technological advances have made business communication faster, easier, economical

and efficient. It has enabled the business to switch over from the local market to the
global market.
2. The growing popularity of cyber cafes has created a big role in attracting internet
population towards e-commerce
3. Technological changes have given confidence to consumers to make electronic
payments in settlement of financial obligations.
Market forces that drives electronic commerce:

1. Business organizations are able to reach international markets by using electronic

medium for enhanced customer support and service.
2. E-commerce enables customers to make product comparison, place orders, track orders
and make payments at ease. Due to convenience, customers prefer to purchase their
desired goods or services over internet in the online marketplace.
3. E-commerce also allows the customers to choose and order products according to their
personal and unique specifications. It paves way for mass customization.
4. The growing internet population stimulates business to switch over from an additional
business to e-business.
5. The great variety of commodities available online and reliable payment methods are
regarded as contributors to the increase of e-business.
6. Consumers often prefer shopping on the internet due to convenience and the changes in
consumer behavior pulls consumer towards e-commerce.
 Technology used in E-Commerce
Dynamics of World Wide Web and Internet (Meaning, Evolution and Features)

World Wide Web(WWW):

The World Wide Web (WWW), commonly known as the Web, is an information
system where documents and other web resources are identified by Uniform Resource
Locators (URLs, such as https://example.com/), which may be interlinked by hyperlinks, and are
accessible over the Internet. The resources of the Web are transferred via the Hypertext Transfer
Protocol (HTTP), may be accessed by users by a software application called a web browser, and
are published by a software application called a web server.

The Web consists of pages that can be accessed using a Web browser. The Hyper-Text
Transfer Protocol (HTTP) is the method used to transfer Web pages to your computer. With
hypertext, a word or phrase can contain a link to another Web site. All Web pages are written in
the hyper-text markup language (HTML), which works in conjunction with HTTP.

II. World Wide Web

The World Wide Web is a system of
interlinked hypertext
documents accessed via the Internet [21].
With a web browser, one
can view web pages thatmay contain text,
images, videos, andother
multimedia and navigate between them
via hyperlinks.On March
12, 1989,Tim Berners- Lee, a British
computer scientist and former
CERN employee, wrote aproposal for
what would eventually
become the World Wide Web [1]
II. World Wide Web
The World Wide Web is a system of
interlinked hypertext
documents accessed via the Internet [21].
With a web browser, one
can view web pages thatmay contain text,
images, videos, andother
multimedia and navigate between them
via hyperlinks.On March
12, 1989,Tim Berners- Lee, a British
computer scientist and former
CERN employee, wrote aproposal for
what would eventually
become the World Wide Web [1]
II. World Wide Web
The World Wide Web is a system of
interlinked hypertext
documents accessed via the Internet [21].
With a web browser, one
can view web pages thatmay contain text,
images, videos, andother
multimedia and navigate between them
via hyperlinks.On March
12, 1989,Tim Berners- Lee, a British
computer scientist and former
CERN employee, wrote aproposal for
what would eventually
become the World Wide Web [
Evolution of World Wide Web:
The World Wide Web is a system of interlinked hypertext document accessed via the
internet. With a web browser, one can view web pages that may contain text, image, videos, and
other multimedia and navigate between them via hyperlinks. On March 12, 1989, Tim Berners-
Lee, a British computer scientist and former CERN employee wrote a proposal for what would
eventually become the World Wide Web

Web 1.0
Web 1.0 was first implementation of the web and lasted from 1989 to 2005.It was define
as web of information connection. According to the innovator of World Wide Web, Tim Berners-
Lee considers the web as ―read-only Web. It provides very little interaction where consumer can
exchange the information together but it was not possible to interact with the website.

Web 1.0 was referred as the first generation of World Wide Web which was basically
defined as It is an information space in which the items of interest referred to as resources are
identified by global identifier called as Uniform Resources Identifiers(URLs)‘‘

First generation web was era static pages and content delivery purpose only. In other
world, the early web allowed us to search for information and read it. There was very little in the
way of user interaction or content contribution.
Web 2.0
Web 2.0 Second generation of web was beyond static web pages as well as web design. It
allowed interact and collaborate with each other. The concept of web 2.0 launched in late 2004
although it suggested new version of World Wide Web. It didn’t only include technical
specification but cumulative changes to the web. Web 2.0 includes social networking sites, blogs,
wikis, video sharing, hosted services and web applications. Web 2.0 allows users more than
retrieving information. Instead of only reading information users can publish comments and their
views in articles. They can create profiles with login and password. There are browsers with user
interface, application software and file storage facilities. In short, web 2.0 also called network as
platform computing. In Web 2.0 it is possible to share data among multiple sites.

Web 3.0(Semantic Web)

Web 3.0 is also known as semantic web is a mutual movement of W3C (World Wide Web
Consortium) international standard. Semantic web is an attempt to enhance current web so that
computers can process the information existing on WWW, understand and fix it, to help humans
to discover required knowledge. It is proposed to form a huge distributed knowledge based
system to share data instead of documents. In other words, we can say that semantic web is a
common framework which allows data to be shared and reused across application, enterprise and
community boundaries. It is an Executable Web, People build application though which people
interact & publish content.

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Features of WWW:
1. The amount of information available on the Internet has become so large that it is difficult to
search for specific information. The World Wide Web (WWW) makes retrieval easy and
quick.

2. The WWW is a search tool that helps you find and retrieve information from a Web site
using links to other sites and documents. The WWW was built on the technology called
Hypertext. This technology increases accessibility to linked documents on the Internet and
helps user to navigate between documents very easily.

3. Hypertext is identified by underlined text and a different color usually. Some places will refer
to these types of technique as Jump-Off Points. Hypertext can make links within the same
document or to other documents.

4. Each time you access a new document by choosing a link, there is a connection made with
the web server that the document is on. Once the appropriate document is retrieved the
connection is broken. There is no point in maintaining the link while you are viewing it. This
is one reason why the WWW is so efficient.
5. WWW lets you search, traverse, and use many types of information at numerous sites and in
multiple forms. This interface is called a browser. Some people refer to a browser as a 'web
browser' often these terms are used interchangeably.

6. The WWW is intended to help people share information resources, and services with the
widest possible community of users. Thus a user can access the WWW on Apple, UNIX,
Macintosh, DOS, Windows, and other operating systems.

7. Just like the Internet, the WWW has a protocol, which is known as Hypertext Transfer
Protocol (HTTP). HTTP acts as an interface between a Web Client Software, such Netscape
Navigator.

8. A major advantage of the WWW is that it also supports TCP/IP services, such as Gopher,
FTP, and Archie in addition to HTTP.
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Internet:
The Internet (or internet) is the global system of interconnected computer networks that
uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is
a network of networks that consists of private, public, academic, business, and government
networks of local to global scope, linked by a broad array of electronic, wireless, and optical
networking technologies. The Internet carries a vast range of information resources and services,
such as the inter-linked documents and applications of the World Wide Web (WWW), electronic
mail, telephony, and file sharing.

The Internet is a vast network that connects computers all over the world. Through the Internet,
people can share information and communicate from anywhere with an Internet connection.
Simply Internet is network of networks. (Internet is the system that facilitates the transfer of
data and the web is the data itself. The web is just one of the ways that data can be
disseminated over the Internet.)

Evolution of Internet:
Internet is one component which has recently become the key ingredient of quick and
rapid life style. Be it for communication or explorations, connecting with people or for official
purposes, internet has become the central hub for all.

Origins of the internet:

 The internet started as an experiment in the late 1960s by the Advanced Research
Projects Agency (ARPA, now called DARPA).
  DARPA experimented with the connection of computer network by giving grants
to multiple universities and private companies to get them involved in the
research.

 ARPANET was developed under U.S Department Of Defence(DOD). DOD

divided the network into hosts and subnet. Subnet is another type of network.

 In 1970’s ARPANET was the first network to implement the protocol suit TCP/IP
for transmitting data between networks.

 NSF (National science foundation) in 1980 started to make high capacity network
for Academic and Engineering Research.NSF connected its huge network to five
supercomputer centers, called NSFnet to ARPANET in 1986

 1990 interworking of ARPANET, NSFnet and other private network resulted into
INTERNET.

 In 90’s internet cost is Rs.25, 000-9.6kbps for 250 hours only.

 In 20th century Internet has become cheaper and faster.

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Features of Internet:
Let us now discuss the features of Internet. The features are described below −

Accessibility
An Internet is a global service and accessible to all. Today, people located in a remote part of an
island or interior of Africa can also use Internet.

Easy to Use
The software, which is used to access the Internet (web browser), is designed very simple;
therefore, it can be easily learned and used. It is easy to develop.

Interaction with Other Media

Internet service has a high degree of interaction with other media. For example, News and other
magazine, publishing houses have extended their business with the help of Internet services.

Low Cost
The development and maintenance cost of Internet service are comparatively low.

Extension of Existing IT Technology

This facilitates the sharing of IT technology by multiple users in organizations and even
facilitates other trading partners to use.
Flexibility of Communication
Communication through Internet is flexible enough. It facilitates communication through text,
voice, and video too. These services can be availed at both organizational and individual levels.

Security
Last but not the least; Internet facility has to a certain extent helped the security system both at
the individual and national level with components such as CCTV camera, etc.

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Designing, Building and Launching an E-Commerce Web site:
1. Start with a Strategy:
To ensure success while building an ecommerce website, start with a sound
strategy. Even the simplest ecommerce platforms have details that need to be just right for
you and your business.

For instance, everyone says that they have excellent customer service, but you’re headed
into a world where your life could depend on your ecommerce site. Don’t you want 24/7
customer support and friendly staff available to troubleshoot anything that might arise?

It’s important to anticipate your greatest needs and challenges as your business grows. If
you plan to sell physical products, decide how you want shipping to work in advance.

If you’re selling digital products, think about the bandwidth and delivery options you’ll
need. Selling services online? List out exactly what you’ll be selling, how you want to
deliver it, and any payment or time limitations.

Think about the options you want AND the options you’ll need for the growth of your
business, and how those options will affect your bottom line. At the end of the day, be sure
to do your homework so that you’re making the best long-term decisions for your
business.

2. Determine your ecommerce business model

Several types of ecommerce business models exist, but the 2 main categories are business
to business (B2B) and business to consumer (B2C). Knowing the difference — and
knowing where your ecommerce business falls — is important.

Business to consumer (B2C)

The bulk of online shops we interact with are business to consumer (B2C). Whether it’s
Amazon, Zippos, or Target, whenever we hit that checkout button, we’ve completed a
transaction on a B2C website. Items or services on a B2C website are sold straight from \
businesses to the general public, without any third parties getting involved.
 Business to business (B2B)
Businesses to business (or B2B) are, as the name suggests, businesses that sell to other
businesses. These are companies that might manufacture something, are a wholesaler, or
provide services and products within a given industry.

3. Choose a Domain and Platform for Your Ecommerce Website

However, if you plan to sell a wide variety of products and develop or extend your brand,
a custom domain is the way to go.

A custom domain gives your e-commerce store:

 A recognizable brand that belongs to you, e.g. mystore.com

 A professional email address linked to your domain where people can contact you
 Search engine optimization (SEO) benefits

Your next step is selecting the right ecommerce platform for your growing business. You
ideally want to build an ecommerce website on a platform that’s flexible and easy to use.
Most small business owners don’t want to bother with hand-coding their website.

Business owners and solo entrepreneurs need a platform that they can easily integrate with
their existing site. Alternatively, if you don’t have a site yet, you will benefit from a
platform that allows you to build a site from scratch, in a few simple steps.

If you’ve already got a website, you can easily build an ecommerce website by adding buy
buttons or widgets. You can also embed a simple store directly on your site

4. Know your audience

You should know the details about who your potential customers are. What's their
background? What's their income range? How old are they? And what competitors’
websites are they likely to purchase from? All of this information will help you create an
ecommerce business personalized to their tastes and needs, building a stronger
connection with them and making for a better user experience.

5. Design Your Store and Add Products

Next step in building an ecommerce site, it’s time to design your store. Think about what,
in addition to your products, you plan to include.

At the very least, you will want to include an about page and a contact page as you build
an ecommerce website to help potential buyers connect with you. You can also add video
and text onto your pages.
When building an ecommerce site, be sure to include your

 Photograph: People like dealing with real people

 Store name: use your account name by default, but you can always change this
 Logo: For branding and recognition
 Payment logos: These help people feel comfortable shopping with you.

Select a theme that represents your brand and allows you to showcase your products in the
best light possible. Create categories that are logical to your buyers. Learn as much about
your ideal customer as you can and design your site with their preferences and ideal user
experience in mind.

Now it’s time to add some products to your new ecommerce website.

 Choose your product type (physical, digital or service).

 Give your product a name and description
 Set the price and the quantities available for sale
 Create a preview of your item by uploading a photo, an audio file or even a video preview.

6. Decide on Pricing and Set Up Payments

There are three key aspects of payments as you build an ecommerce website: How you will
price your products, how customers are going to pay you, and how you are going to get those
payments into your own bank account.

There are many factors to consider when pricing your products for sale online including:

 The cost of materials per item

 Ecommerce web hosting
 Shipping
 Taxes
 Fees and percentage per sale deductions from various organizations, including PayPal,
credit cards, etc.
 Flexible pricing, like pay-what-you-wish

Then decide how your ecommerce site will accept payments. In many cases, this means
finding a third-party payment processor to act as the go-between. One extremely popular
payment option is PayPal. With these payment options, you can take payments from anywhere
and give your customers extra peace of mind.

7. Create a Great Checkout Experience

 Enabling customers to purchase multiple items at once

  Offering free shipping if you can, or
 Being very clear about shipping costs upfront (before customers get to the
checkout)
 Sending cart abandonment emails anytime someone leaves without completing
their purchase
Don’t forget, the number of steps it takes to complete a purchase significantly affects your
sales conversion rates. Test your checkout process until it is perfect and ask your friends
and family to test it too.

8. Launching your Website

Now that you’ve registered your domain name and even hosted, the next step is to make
your website live on the internet for the world to view. At this stage, your website is ready
to be live on the internet but it still requires a lot of grooming.
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Hardware and Software Requirements for E-commerce website:

Telecommunication Infrastructure Requirements:

It is entailed with bandwidth and security.
Bandwidth varies from one e-commerce to another. Two main components of
security requirements for e-commerce are type of firewall and encryption/algorithm
mechanism. Security requirements area is crucial part of e-commerce.

Hardware Requirement for E-commerce:

Pentium II/III based Intel server running Linux can serve hundreds of unique
customers each day. Low traffic sites can be easily served from a single machine
depending on the needs of the business. High traffic sites require a backup of
servers which automatically takes over operations in case of failure of primary ones.

Software Requirements for E-commerce:

Now it’s time to decide what design software and other tools you’ll use to
take your vision live on the Web, whatever the size of your business, and whether or
not you want to handle retail transactions online. The two most common types of
design software are WYSIWYG and HTML, which is used to build a Web site with
Hypertext Markup Language

Several software is available free on the internet that can be used to build e-
commerce exchanges. Ex:- Linux OS, mySQL database ,Apache web server etc.,

Technical Skill
 A systems administrator must have a good knowledge of computer hardware, must
be able to maintain and upgrade hardware including hard drive, processor and
motherboard.

Outsourcing Vs In-Housing development of an e-commerce

website:
Pros of outsourced e-commerce development:

A higher level of skill:

Typically, outsourcing your e-commerce development provides you access to a wide
variety of specialists with vast experience in the different development fields. In this instance,
you are not paying for someone who is learning on the job, or handling sensitive information for
the first time. Business leaders can rest assured that their e-commerce development is in the safest
hands, eliminating any worries or the need for micro-management. If unusual issues arise,
outsourced specialists can handle them immediately, as opposed to having to hire another
specialist of your in-house team. You can focus on other areas of your business while having the
luxury of knowing your e-commerce solutions are being handled by industry professionals who
make a living doing this specific job.

A higher level of productivity

Outsourced development teams usually charge by the hour depending on the scope of
work and size of the project. Thanks to their experience, cost estimates are always clearly defined
so you know what you are in for cost-wise, which allows for more effective project management
and planning. Charging by the hour means higher productivity, as each minute of a project needs
to be accounted for – so you know exactly where your money is going. Specialists work far
quicker and efficiently as they know what they are doing, meaning every minute is spent working
on tangible tasks that make a huge impact on your e-commerce platform.

More scalability and flexibility

The beauty of outsourcing remote teams lies in the complete freedom of scalability and
flexibility it provides. You are able to scale up or down your development team according to your
project needs and requirements. If you need more specialists for one technical project you can
hire them by the hour to tackle that specific task, and not have to pay a full team’s salary to
complete a handful of hours’ work.

More cost-effective
Adding to the above point, outsourcing development teams can actually save businesses
money in the long run. By hiring outsourced teams on an ad-hoc basis, you are able to know
exactly what you can expect according to the hours billed. Sure, outsourcing teams of
professionals may cost more per hour, but in the long run these costs are far lower than paying
salaries of full-time employees. Basically, you pay for what you need and eliminate the
redundancy. This positively impacts cost flexibility, as budgets can be appointed on a case-by-
case basis. Additionally, all costs associated with full-time employees are negated (time off, sick
leave, health and pension fund contributions, etc.).

Faster project delivery

Dealing with outsourced specialists means that all systems and procedures pertaining to
building and maintaining an e-commerce platform are already established, saving you valuable
time to channel into hitting the market before your competitors. Setting up an in-house
development team requires a lot of time to hire and establish processes, and in the e-commerce
game time is valuable when going to market. With outsourced teams, you can expect work to
begin from the get-go.

Cons of outsourced e-commerce development:

Remote communication
In a pre-COVID-19 world, some business leaders felt that having your team housed under
the same roof directly translated into better productivity. As we have all come to realize, this ‘out-
of-sight-out-of-mind’ viewpoint doesn’t entirely reflect the way people work in today’s
competitive marketplace. Some managers feel that if their team is remote then they have no
control over what is happening due to a lack of transparency. It is best to establish early on clear
instructions as to each project and set up regular meetings to gain clarity and transparency from
your remote teams. Clear and concise reporting submitted regularly will provide ultimate clarity.
Thanks to the recent advancement of the technology of video calls, emails, and virtual assistants,
the world has embraced remote working as an evolution in the way businesses and people
operate. Business leaders now realize that they can effectively communicate with their remote
teams easily and do not have to be in the same room anymore.

Security risks
Some businesses feel that outsourcing development teams on a project-by-project basis
leaves room for security leaks and intellectual property (IP) theft because outsourced teams are
not officially part of the company. Although valid, this concern is easily negated by insisting on
non-disclosure agreements (NDA) and various other legal processes. Be sure to set up regular
meetings and feedback sessions with your remote teams to see their engagement levels and
motivation for each project. However, the security risks in the handling of sensitive business
information from outsourced teams shouldn’t be an issue as no development vendor will risk their
reputation for such trivial reasons.
 **************
Pros of in-house e-commerce development:
Complete control
Having a dedicated team of developers within your workforce who focus exclusively on
your business’s e-commerce requirements means your platform is built according to your specific
needs. Everything that needs to be accounted for pertaining to your own business requirements
can be focused on directly, with actionable changes derived from your personal guidance and
business strategy. You have complete control over every aspect of the build to ensure your in-
house team delivers on your vision.
Quicker response time
Thanks to having your dedicated development team on-hand, your e-commerce
development needs can be attended to quickly. This is especially useful when issues arise on your
platform, which need fast remedies and quick-fix solutions before a thorough investigation can
take place. Readily available staff provides a safety net for businesses who want to secure the
ability to stamp out any minor issues before they become major ones.
Easier communication
Having your team in the same office or building allows for face-to-face communication.
It’s no secret that developers are a particular breed of human (in a good way!), and dealing with
them directly in-person goes a long way in not only getting them on board with company culture,
but also to ensure your specific requirements are met. Clear and direct communication with your
development team is crucial to avoid any misunderstandings which could result in costly mistakes
and reverts.

Cons of in-house e-commerce development:

It’s expensive
Assembling a development team to work exclusively on your business requirements full-
time is a costly Endeavour, especially for businesses just starting out. Developers are highly
regarded specialists and thus are able to command high salaries. This is because of the value they
provide your business – without them, you have no e-commerce platform.

It’s not time efficient

Having your development team on-board in a full-time capacity means it is impossible for
them to work on high-level tasks every minute the day. Sure, we all need microburst pockets of
downtime throughout the day, but this is more of a bitter concept to accept when you are paying
specialist wages.
Staff churn
It is understood in the tech industry that most developers, by their own admission, do not
possess a high level of staying power at the companies they work for. This is due to the high
demand for specialists in the industry, and it is common for skilled developers to be approached
by competitors.
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WEB Hosting

Web Hosting is a service that allows hosting/post-web-server applications (website or web

page) on a computer system through which web-browser clients can have easy access to
electronic content on the Internet.
Web Server or Web Host is a computer system that provide web hosting. When Internet user’s
want to view your website, all they need to do is type your website address or domain into their
browser. The user’s computer will then connect to your server and your web pages will be
delivered to them through the browser. Basically, the web hosts allow the customers to place
documents, such as HTML pages, graphics, and other multimedia files, etc. onto a special type
of computer called a web server. It provides a constant and high-speed connection to the
backbone of the Internet.
Different types of Web hosting services are listed below:
 Free Hosting
 Virtual or Shared Hosting
 Dedicated Hosting
 Co-location Hosting
 Free Hosting:
This is a free non-paid web hosting service. This type of hosting is available with
many prominent sites that offer to host some web pages for no cost, like Hostinger.
Advantages:
Free of cost
Use websites to place advertisements. banners and other forms of
advertising media
Disadvantages:
 Customer support is missing
 Low bandwidth and lesser data transfer
 No control over your website
 Shared/Virtual Hosting:
It’s a web hosting service where many websites reside on one web server connected
to the internet. This type of hosting is provided under one’s own domain name,
www.yourname.com. With a hosting plan with the web hosting company, one can
present oneself as a fully independent identity to his/her web audience, like Lindo.
Advantages:
Easy and affordable
Secured by hosting provider
24/7 Technical support
Disadvantages:
 Shared resources can slow down the whole server
 Less flexible than dedicated hosting
 Dedicated Hosting:
Hosted on a dedicated server, this type of hosting is best suited for large websites
with high traffic. In this, the company wishing to go online rents an entire web server
from a hosting company. This is suitable for companies hosting larger websites,
maintaining others’ sites or managing a big online mall, etc like Google Cloud.
Advantages:
Ideal for large business
Strong database support
Unlimited software support
Powerful e-mail solutions
Complete root access to your servers
Disadvantages:
 Its very expensive
 Requires superior skill sets
 Co-located Hosting:
This hosting lets you place your own web server on the premises of a service
provider. It is similar to that of dedicated hosting except for the fact that the server is
now provided by the user-company itself and its physical needs are met by the
hosting company like AWS.
Advantages:
 Greater Bandwidth High Up-Time
  Unlimited Software Options
 High Security
Disadvantages:
 Difficult to configure and debug
 It’s expensive
 Require high skills
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