E-Commerce
E-commerce
is business activity conducted through some electronic medium. This is
becoming an increasingly important method for business to be involved in and many
businesses have taken the opportunity of setting up a Web site as a means of
establishing a presence - electronically.
It might be that this presence is merely to provide information to customers; it
could be that the presence is part of the total presence the business has, i.e. it
might have stores on the high street as well as a method of purchasing online. In
other cases, the business might be just an online service only.
Whatever form it takes, an online presence and the opportunity to do business
using technology is increasingly important especially as business goes global. It is
not just personal computers (PCs) that are the medium through which business can
trade. The development of mobile devices such as phones and PDAs also allows
businesses to be in touch with their customers 24 hours a day wherever the
customer might be.
The transmission of information and the range of services that can be provided are
much greater and this can help a business expand.
Advantages of E-commerce: 
E-commerce systems can operate all day every day.

The Internet spans the world, and it is possible to do business with any
business or person who is connected to the Internet.

Speed. Electronic communications allow messages to travel the world almost
instantaneously

Lower Cost of Doing Business - Reduce inventory, employees, purchasing
costs, order processing costs associated with faxing, phone calls, and data
entry, and even eliminate physical stores. Reduce transaction costs.

Improved customer relations- With automated tools it is possible to
interact with a customer in richer ways at virtually no cost. For example, the
customer might get an email when the order is confirmed, when the order is
shipped and after the order arrives. A happy customer is more likely to
purchase something else from the company.

Ecommerce is ideal for niche products. Customers for such products are
usually few. But in the vast market place i.e. the Internet, even niche
products could generate viable volumes.
Disadvantages of E-commerce: 
the competition is much greater,

the speed with which customers can access information about rival firms,

Time for delivery of physical products - physical goods need to be
delivered, which takes time and costs money.

Perishable goods are difficult to sell and deliver fresh

Returning goods. Returning goods online can be an area of difficulty. The
uncertainties surrounding the initial payment and delivery of goods can be
exacerbated in this process. Will the goods get back to their source? Who
pays for the return postage? Will the refund be paid? Will I be left with
nothing? How long will it take? Contrast this with the offline experience of
returning goods to a shop.
Privacy, security, payment, identity, contract. Many issues arise privacy of information, security of that information and payment details,
whether or not payment details (eg credit card details) will be misused,
identity theft, contract, and, whether we have one or not, what laws and
legal jurisdiction apply.
Size and number of transactions. E-commerce is most often conducted


using credit card facilities for payments, and as a result very small and very
large transactions tend not to be conducted online.
Types of e-commerce

b2c - This refers to businesses engaged in servicing consumer demand
directly - this could be a firm like Dixons, who now have an internet presence,
or it could be a small village café. b2c refers to 'business to consumer'. Even
small businesses will have to think about some element of e-commerce because
they might have to think about using credit and debit card services which use
electronic means of funds transfer.
b2b - This refers to businesses that service the requirements of other

businesses. They will be suppliers of machinery, equipment, spare parts and
other services such as payroll, insurance, banking services and maintenance.
Clicks and mortar - These are businesses that might combine high street

presence with an internet presence.
Considerations in developing an e-commerce strategy
If a business is thinking of expanding into e-commerce there are a number of
factors that it should consider.

need to develop a Web site for the business

Payment systems - How will your customers be able to pay for the
goods/services they want to buy?

Security - How will you convince customers that buying from you online is
safe and secure?

Distribution methods - How will you get your goods to your customers having an online presence may reduce some overheads but delivery costs can
be very high especially for bulky items. Will you deliver internationally? If
you do go international, what are the implications of such methods for tax
and import licence/duties?

Maintenance and updating of the site - How will you manage the day to day
running of the site? If there are problems and the site is down it can lose
you potential customers!

After sales service - What measures are you gong to put in place to cater
for after sales service/customer queries? What happens if a customer does
not like the product - this might be highly relevant to those businesses
where customers are not able to see the product before they buy?

Legal issues - What are the legal requirements involved in setting up ecommerce systems? Are you aware of the range of legal provisions you will
have to satisfy? What are the rules about the use of any databases of
customer details that you possess? What is the difference between
marketing your business by e-mail and SPAM?