E-Commerce

What is Ecommerce?

Ecommerce, also known as electronic

commerce or internet commerce, refers to
the buying and selling of goods or services
using the internet, and the transfer of money
and data to execute these transactions.
Ecommerce is often used to refer to the sale
of physical products online, but it can also
describe any kind of commercial transaction
that is facilitated through the internet.
History of E-Commerce
The history of e-commerce begins with the
first ever online sale: on the August 11, 1994
a man sold a CD by the band Sting to his
friend through his website NetMarket, an
American retail platform. This is the first
example of a consumer purchasing a product
from a business through the World Wide Web
—or “ecommerce” as we commonly know it
today.
 Since then, ecommerce has evolved to make
products easier to discover and purchase
through online retailers and marketplaces.
 Independent freelancers, small businesses,
and large corporations have all benefited
from ecommerce, which enables them to sell
their goods and services at a scale that was
not possible with traditional offline retail.
Types of Ecommerce Models

There are four main types of ecommerce

models that can describe almost every
transaction that takes place between
consumers and businesses.
1.Business to Consumer (B2C):

When a business sells a good or service to an

individual consumer (e.g. You buy a pair of shoes
from an online retailer). 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.
 2. Business to Business (B2B):

When a business sells a good or service to another

business (e.g. A business sells software-as-a-
service for other businesses to use) . 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.
 3. Consumer to Consumer (C2C):

When a consumer sells a good or service to another

consumer (e.g. You sell your old furniture on eBay to
another 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.
4. Consumer - to – Business(C2B):
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 who fulfills the
consumer's requirement within the specified budget,
approaches the customer and provides its services.
 Ecommerce refers to the paperless exchange
of business information using the following
ways −
 Electronic Data Exchange (EDI)
 Electronic Mail (e-mail)
 Electronic Bulletin Boards
 Electronic Fund Transfer (EFT)
 Other Network-based technologies
Features

E-Commerce provides the following features −

 Non-Cash Payment − E-Commerce enables the use of

credit cards, debit cards, smart cards, electronic fund
transfer via bank's website, and other modes of electronics
payment.
 24x7 Service availability − E-commerce automates the
business of enterprises and the way they provide services
to their customers. It is available anytime, anywhere.
 Advertising / Marketing − E-commerce increases the reach
of advertising of products and services of businesses. It
helps in better marketing management of
products/services.
 Improved Sales − Using e-commerce, orders for the products
can be generated anytime, anywhere without any human
intervention. It gives a big boost to existing sales volumes.
 Support − E-commerce provides various ways to provide pre-
sales and post-sales assistance to provide better services to
customers.
 Inventory Management − E-commerce automates inventory
management. Reports get generated instantly when required.
Product inventory management becomes very efficient and
easy to maintain.
 Communication improvement − E-commerce provides ways
for faster, efficient, reliable communication with customers
and partners.
Traditional Commerce v/s E-Commerce
 E-Commerce advantages can be broadlly
classified in three major categories −
 Advantages to Organizations
 Advantages to Consumers
 Advantages to Society
Advantages to Organizations

 Using e-commerce, organizations can expand their market to

national and international markets with minimum capital
investment. An organization can easily locate more customers,
best suppliers, and suitable business partners across the globe.
 E-commerce helps organizations to reduce the cost to create
process, distribute, retrieve and manage the paper based
information by digitizing the information.
 E-commerce improves the brand image of the company.
 E-commerce helps organization to provide better customer
services.
 E-commerce helps to simplify the business processes and
makes them faster and efficient.
 E-commerce reduces the paper work.
Advantages to Customers

 It provides 24x7 support. Customers can enquire about a

product or service and place orders anytime, anywhere from
any location.
 E-commerce application provides users with more options and
quicker delivery of products.
 E-commerce application provides users with more options to
compare and select the cheaper and better options.
 A customer can put review comments about a product and can
see what others are buying, or see the review comments of
other customers before making a final purchase.
 E-commerce provides options of virtual auctions.
 It provides readily available information. A customer can see
the relevant detailed information within seconds, rather than
waiting for days or weeks.
Advantages to Society

 Customers need not travel to shop a product, thus

less traffic on road and low air pollution.
 E-commerce helps in reducing the cost of products,
so less affluent people can also afford the products.
 E-commerce has enabled rural areas to access
services and products, which are otherwise not
available to them.
 E-commerce helps the government to deliver public
services such as healthcare, education, social
services at a reduced cost and in an improved
manner.
The disadvantages of e-commerce can be
broadly classified into two major categories −
 Technical disadvantages
 Non-Technical disadvantages
Technical Disadvantages

 There can be lack of system security, reliability

or standards owing to poor implementation of
e-commerce.
 The software development industry is still
evolving and keeps changing rapidly.
 In many countries, network bandwidth might
cause an issue.
 Special types of web servers or other software
might be required by the vendor, setting the e-
commerce environment apart from network
servers.
 Sometimes, it becomes difficult to integrate
an e-commerce software or website with
existing applications or databases.
 There could be software/hardware
compatibility issues, as some e-commerce
software may be incompatible with some
operating system or any other component.
Non-Technical Disadvantages

 Initial cost − The cost of creating/building an e-

commerce application in-house may be very high.
There could be delays in launching an e-
Commerce application due to mistakes, and lack of
experience.
 User resistance − Users may not trust the site
being an unknown faceless seller. Such mistrust
makes it difficult to convince traditional users to
switch from physical stores to online/virtual stores.
 Security/ Privacy − It is difficult to ensure the
security or privacy on online transactions.
 Lack of touch or feel of products during
online shopping is a drawback.
 E-commerce applications are still evolving

and changing rapidly.

 Internet access is still not cheaper and is

inconvenient to use for many potential

customers, for example, those living in
remote villages.
What Is Supply Chain Management and Why Is It Important?

 Supply chain management (SCM) consists of a set of

approaches to efficiently integrate the flow of materials,
finances and information from suppliers, manufacturers,
wholesalers, distributors and retailers to the final customer
and back again,
 Put another way, supply chain management (SCM) involves
the production, shipment and distribution of products. It
covers everything from inventory to sales and is crucial to
any business that makes and sells products, says Callie
Malvik on the Rasmussen College business blog.
"Professionals in this field (SCM) must work closely with
others to acquire everything they need. More importantly,
they need to ensure it’s all completed on time and within
budget,"
 Supply chain management (SCM) jobs include
purchasing agent, operations manager,
logistics analyst, supply chain manager,
purchasing manager, logistics manager,
production specialist, and planning and
expediting clerk.
 The history of ecommerce begins with the
first ever online sale: on the August 11, 1994
a man sold a CD by the band Sting to his
friend through his website NetMarket, an
American retail platform. This is the first
example of a consumer purchasing a product
from a business through the World Wide Web
—or “ecommerce” as we commonly know it
today.