The Internet has made communication so easy and convenient that we can do practically anything while online. Pretty soon, online activities will replace their physical-life counterparts. Email is so much easier and cheaper than sending letters through the postal service. Researching online for projects is a lot easier than going to a library. I mean, does anyone even use libraries anymore? The sale of music on compact discs are way down as people are opting for music downloads at a much cheaper price. Even business is becoming more widespread online. The development of Ebay in 1995 and Amazon a few years later sparked a new age of e-commerce, or the buying or selling of goods and services electronically.
“E-Commerce (a.k.a. electronic commerce, EC, Ebusiness, Etailing) is the buying and selling of goods and services on the Internet or more specifically, the World Wide Web” (Keli website). This is a VERY simple definition for a much more complex task. Yes, commerce is the exchange of goods and services which usually involved the exchange of payment in the form of a monetary amount. Adding the prefix “E” simply states that those exchanges are taking place electronically. It gets a lot more complicated than that. There are three different types of e-commerce websites and multiple subdivisions as to what specific audiences a site is geared towards.
The three types of e-commerce venues include transactional sites, information delivery sites, and e-marketplaces. Transactional sites are the most basic type of e-commerce website. A lot of small businesses are leaning towards these as they are much smaller and easier to maintain then selling through “e-marketplaces” like Amazon or eBay and can be tailored to fit a specific niche market. The process of setting up a “payment gateway” account to facilitate credit card orders has become easier in recent years and is the most efficient way for merchants to conduct business online (Keli website). A “payment gateway” is a third party company that you create an account with to assist in credit card transfers from customer orders. The most popular gateway is PayPal, but others include CCNow, ProPay and 2CheckOut.
In fact, “Marketing studies show that you’ll lose 60 to 80 percent of your potential orders if your Web site is not set up to accept credit cards. If you offer credit card payment, not only will you receive more orders, those orders will be substantially larger. Credit cards enable impulse buying, reassure customers of your legitimacy, and simplify your billing” (Keli website).
Information delivery sites are different from basic transactional sites as they offer more than simple transactions. One major use for these types of sites is to promote high-end items that the average customer would most likely not buy online, such as cars, real estate, and other large-transaction items. These sites are perfect for people who “what to take a look for themselves” before purchasing.
Another use for information delivery sites is to offer a buyer the ability to “compare prices”. Venders who are famous for this are insurance companies that display competitor’s prices along side their own. This helps customers get the best price for a service or item without having to visit 10 different sites.
The third and final type of e-commerce site is an e-marketplace. eBay and Amazon pioneered this idea of marketing in 1995 by offering a “global exchange” of buyers and sellers. This form of website is ideal for those who do not have the time or resources to set up their own transactional website, or just want to sell some stuff they want to offload. Rather than paying the relatively costly price of domain names and hosting services, one can instead post their business sales on an e-marketplace site, and in return the site gets a small percentage of any sales. This form of ecommerce site caters to the independent seller rather than for business sales.
Besides the above three divisions of e-commerce Web sites, e-commerce can be divided again into five different audience divisions. They include Business to Business (B2B), Business to Customer (B2C), Business to Employee (B2E), Customer to Customer (C2C), and Business to Machines (B2M).
Business to Business e-commerce refers to the exchange of funds and services between businesses. This often is the process of choice for retailers who get their stock from a manufacturer. It involves the cooperation of each company’s business to make large transactions mainly for retail. Business to Customer is a similar process, but involves selling directly to the customer. In regards to e-commerce, it can be the most direct way for businesses to promote their product or service. A customer directly visits the vender’s site and can conduct a purchase instantly. A third type of e-commerce includes Business to Employee. Under this category, employees are given a facilitated way to order any supplies through their company, or to check any company stock or 401k plans they have with the company. Another type of e-commerce, Business to Machine is a relatively new concept where companies can check the status of their machinery and inventory electronically; ordering any parts or supplies necessary to maintain upkeep in the process.
The fifth and final e-commerce method, Customer to Customer is the most effected by online transactions. C2C e-commerce is the backbone of online-auction sites like eBay. Sites like Amazon also employ C2C tactics to provide a very widespread market of sellers and buyers. C2C is probably the most secure form of online transaction as well with the use of feedback about buyers and sellers and secure payment methods like PayPal.
One major problem with online e-commerce is the feeling of security. People are skeptical about disclosing their credit card information due to the fact that it can be intercepted by hackers. Also, the rise of phishing scams have made it hard for anyone to trust transactions online. Thou, there are some technologies and laws established to provide a safer and more enjoyable experience for those involved in online transactions.
First off, many legitimate websites use a Secure Sockets Layer (SSL) protocol to safely transmit sensitive information like credit card numbers. Unlike normal HTML protocols, SSL protocols encrypt the information so that only the designated target computer can read it and all attempt by hackers to read the information will be unsuccessful. You can tell if you are using a secure SSL protocol by checking the address bar in your browser. If the address starts with https://, then you are using a secure connection; the “s” in the address indicates the use of a secure protocol like SSL.
There have also been regulations passed to help ensure people’s safety during e-commerce activities. The policies currently active in the UK include The Data Protection Act of 1988, The Customer Protection Regulations of 2000 and updated in 2005, and The Electronic Commerce Regulations of 2002. Though they all get quite technical in their processes, the goal remains the same. The basic idea behind these regulations is to have vendors specifically state what they will use a customer’s personal information for and to not share it with any other unauthorized person. Also, actions that identify the vendor’s website with contact information are always a good thing. Not only does it help give legitimacy to the vendor, but customers feel more secure.
As you can see, e-commerce is more than just buying and selling goods electronically. It is made up of a vast array of benefits and responsibilities that we must abide by to get the most out of this ever expanding technology.
Sources:
www.clickdocs.co.uk/ecommerce-information.htm
www.export.gov/sellingonline/typesofsites.asp
www.kelie.com/tips_ecommerce.html
www.ubercart.org/what_is_ubercart
www.cybersource.com/news_and_events/view.xml?page_id=1272
forums.techarena.in/showthread.php?t=6050
www.ecommerce-journal.com/news/the_biggest_thief_in_banking_history
www.isos.com.my/ecommerce/advantages.htm
http://marcbowles.com/sample_courses/amc/ec1/ec1_3.htm
www.asaresearch.com/ecommerce/ecommerce_types.htm
Discussion Questions:
How do most of you feel about conducting credit card orders online in regards to security?
What are your personal advantages and disadvantages of using online transactions vs. in-store purchases? Possibly examples.
Are credit cards the best medium for fund transfers or is there a more secure and convenient way of payment online? Should we develop a more secure payment method if one does not currently exist?
What is your personal view on online purchasing?
Will ecommerce create a “global community” or will solely doing everything though a computer leave us socially isolated?