Electronic Commerce
Chapter 11 – Computers:
Understanding Technology, 3rd
edition
November 17, 2008
1
Electronic Commerce
• Electronic commerce, or e-commerce, is
the buying and selling of products and
services electronically over the Internet
• Some businesses, such as Amazon.com,
solely do business over the web whereas
many traditional retailers (bricks-andmortar companies) sell both at their
physical locations and over the web
November 17, 2008
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Types of Business to Consumer ECommerce
• Online shopping
• Online services
• Peer-to-peer transactions
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Advantages of Online Shopping
to Consumer
• No travel and can do at any time of the
day or day of week
• More selection
• More product information available, either
through the site or other sites
• Ease of comparison shopping
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Shopping Agents/Bots
• At the web site of the shopping agent, you
enter the name of the product and it
returns the price charged by various online
stores for that product, complete with links
to the exact pages in online stores offering
that product
• Popular ones are BizRate, DealCatcher,
MySimon, and Froogle
• Such tools facilitate comparison shopping
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Advantages of Online
Purchases to Seller
• Less employee time per customer or
transaction
• Reduced need for inventory
• Larger potential customer base (but more
competition – national or international
market vs. local market)
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Online services
• Online banking – electronic funds transfer
reducing use of checks
• Online loans – consumer and seller both have
access to a national market rather than a local
one
• Investing – stock trades, research, portfolio
analysis
• Online travel
– travel agencies (Expedia, Travelocity, Orbitz) which
are solely online
– most airlines now charge extra for paper ticket
– Seat assignment and checkin via internet
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Peer-to-Peer Online Transactions
• Online auctions – eBay market value is 43.6B (General
Motors 20.5B) (6/25/07)
– Peer-to-peer because eBay is neither buyer nor seller
– Rating system to build trust in the seller
• Person-to-Person payment systems – PayPal, Google
Checkout –
– Seller need not have this credit card processing capability, which
is expensive for small sellers due to monthly minimums
– Seller need not provide secure web site (https) nor electronic
shopping cart; both are provided by PayPal/Google Checout
– Buyer supplies financial information (bank account or credit card)
to PayPal or Google Checkout and this information is never
transmitted to seller (thus buyer is more comfortable dealing with
unfamiliar sellers)
• Digital music distribution – post-Napster
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