what is e-commerce?
Types of e-commerce,
Advantage of e-commerce,
Disadvantages of e-commerce,
Difference between e-commerce and e-business,
Learn what it is, it's an impact, it's history and more.
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E- commerce(tYPES OF E-Commerce
1. E-Commerce
Intranet definition:
An intranet is a private online network that is only accessible to members within an
organization.An intranet acts as the backbone of internal communication.
Benefit: Security. Sensitive information and data can be kept safe in a company
intranet with the help of a virtual private network (VPN) software.
Benefit: Better internal communication occurring across all levels. A company
intranet allows communication to move from peer to peer, subordinate to
superior, or vice versa.
Commonly, intranets are used to:
● Communicate within the business: both top-down and bottom-up by
distributing news and announcements, providing feedback and sharing
information
● Manage documents and business information: intranets offer a centralized
location to host, search and access vital business content
2. ● Facilitate common business processes: through use of workflow and forms, an
intranet can enable users to self-serve for many common business processes,
such as booking holidays or reclaiming expenses
● Enable collaboration: functionality such as team areas, forums, blogs and social
tools can support employees to work together effectively, regardless of their
department or location
● Support strategic business objectives: these may span improved employee
engagement and morale, embedding a business culture, increasing staff
retention or encouraging better productivity and efficiency
Internet
Internet is a global network of computers which may be server or client that
exchanges information.
It can be defined as a network of networks which can be linked through copper
wires, wireless connections.
Vinton cerf is a father of internet(co-designer of the TCP/IP networking protocol.
Internet services are-
WWW, URL,HTML,HTTP, protocol, web browsing
Extranet
Extranet is a private network designed specifically to allow individual(clients,
vendors, suppliers, partners etc.) to communicate with you and your
employees in a closed virtual space.
Examples- TCP/IP protocols, e-mail, web-browsers.
Benefits
Improve quality, lower travel cost, lower administrative and other overhead
cost, reduction in paperwork, improve customer services.
Disadvantages
Faceless contact, information can be misused by other competitor, fraud may
be possible, technical employees are required.
3. Ecommerce
Ecommerce, also known as electronic commerce or internet commerce, refers
to the buying and selling of goods or services using the internet
Types of E-commerce 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).
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)
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).
4. 4. Consumer to Business (C2B):
When a consumer sells their own products or services to a business or
organization (e.g. An influencer offers exposure to their online audience in
exchange for a fee, or a photographer licenses their photo for a business to
use).
Examples of Ecommerce
Ecommerce can take on a variety of forms involving different transactional
relationships between businesses and consumers, as well as different objects
being exchanged as part of these transactions.
1. Retail:
The sale of a product by a business directly to a customer without any
intermediary.
2. Wholesale:
The sale of products in bulk, often to a retailer that then sells them directly to
consumers.
3. Dropshipping:
5. The sale of a product, which is manufactured and shipped to the consumer by
a third party.
4. Crowdfunding:
The collection of money from consumers in advance of a product being
available in order to raise the startup capital necessary to bring it to market.
5. Subscription:
The automatic recurring purchase of a product or service on a regular basis
until the subscriber chooses to cancel.
6. Physical products:
Any tangible good that requires inventory to be replenished and orders to be
physically shipped to customers as sales are made.
7. Digital products:
Downloadable digital goods, templates, and courses, or media that must be
purchased for consumption or licensed for use.
6. 8. Services:
A skill or set of skills provided in exchange for compensation. The service
provider’s time can be purchased for a fee.
Advantages of E-Commerce to Customers
• Reduced Prices:-Costs of products are reduced since the stages along
the value chain are decreased. For instance, intermediaries can be
eliminated by the company directly selling to the customers instead of
distributing through a retail store.
• 24-Hour Access:-Online businesses neversleep as opposed to brickand
mortar businesses. E-Commerce allows people to carry out businesses
without the barriers of time.
• Global Marketplace:- Consumers can stop anywhere in the world.
Currently according to World Trade Organization (WTO)there are no custom
duties put on products bought and traded globally electronically. This also
provides wide selection of products and services to consumers.
• More Choices:- Provides consumers with more choices. For e.g. before
making any purchase, customer can study about all the major brands and
features of any item. It also provides consumers with less expensive
products and services by allowing them to shop in many places.
Advantages of E-Commerce to Businesses
• Increased potential market share:- The internet enables businesses to
have access to international markets thereby increasing their market share.
Companies can also achieve greater economies of scale.
• Low cost Advertising:- Advertising on the internet costs less than
advertising on print or television depending on the extent of
advertisement.Advertising on the internet itself is less costly since there is
less cost associated with it in terms of printing and limited television spots.
• Low barriers to Entries:- Anyone can start up a company on the internet.
Start-up costs are a lot lower for companies since there is less need for
money for capital.
7. • Strategic Benefits:- The Strategic benefits of making a business e-
commerce enabled is that it helps reduce the delivery time, labour cost and
the cost incurred in document preparation, data entry, error detection etc.
Disadvantages of E-Commerce
• Hidden Costs:- Although buying online is convenient, the cost of this
convenience is not always clear at the front end. For e.g. on-line purchases
are often accompanied by high shipping and re-stocking fees, a lack of
warranty coverage and unacceptable delivery times. In fact, too many e-
commerce companies have developed a reputation of overcharging for
shipping and handling.
• Lack of Security:-One of the main roadblocks to the wide acceptance of
e-commerce by businesses and consumers alike is the perceived lack of
adequate security for on-line transactions.
For e.g. Consumers are growing increasingly worried about providing credit
card information over the Internet.
During the past few years, the press has been filled with reports about
hackers breaking into e-business and stealing credit card information.
• Lack of Privacy:-Customers also worry about the privacy implications of
data gathered by organizations of all types and sizes. Even at the simplest
data level, sales information is stored in databases connected to web
servers, thus exposing the information to cyber criminals. Because data
gathering on the web is so easy, databases routinely contain information
about customer purchasing habits, credit information and so on. In many
cases, companies sell customer database information to marketing
companies. In turn, the marketing companies engage in massive e-mail
campaigns to attract new customers.It doesn’t take long for the customer’s
email box to be filled with unwanted email (also known as Spam).
• Network Unreliability:-Althoughthe Internetis designed to overcomethe
single point of failure problem, there have been several well-publicized
incidents of network failures during the past few years. Network reliability
problems may be generated by such factors as:-
ØEquipment failure in the network connection provider.
Ø Accidental problems caused by nature-such as lightning, floods,
earthquakes that affect communication lines.
8. Ø Long response time due to increased network traffic or inadequate
bandwidth.
• Low Service Levels:- Another common complaint about doing business
online is the low level of customer service that online companies tend to
provide. Although technology has automated business transactions to a
large extent, there remains a real need for the human touch. Therefore e-
commerce websites must provide:-
Ø A pleasant and problem free pre-ordering and ordering experience. The
website design is an important interface.
ØReadily available easily used feedback options.
ØQuick complaint resolution.
ØTimely and low-cost shipping delivery to customers.
The Differences Between E-Commerce
and E-Business
Diffrence between the e-commerce and e-business
e-business refers to all aspects of operating an online business
ecommerce refers specifically to the transaction of goods and services.
Buying and selling things via the internet is known as E-Commerce.
On the other hand, E-Business isn’t limited to just buying and
selling activities. All the business activities that conducted via the
internet will be considered as E-Businesses. For example, the
information and computing technologies used to enhance one’s
business.
9. · E-Commerce is a main part of E-Business
E-Commerce includes any kind of business transaction which
related to money, but E-Business includes monetary and allied
activities.
Comparison Chart
BASIS FOR
COMPARISO
N
E-COMMERCE E-BUSINESS
Meaning Trading of merchandise, over
the internet is known as E-
commerce.
Running business using
the internet is knownas E-
business.
What is it? Subset Superset
Is it limited to
monetary
transactions?
Yes No
10. What they carry
out?
Commercial transactions Business transactions
Approach Extroverted Ambiverted
Requires Website Website, CRM, ERP, etc.
Which network
is used?
Internet Internet, Intranet and
Extranet.
Factors affecting E-Commerce
Some common factors are political, economic, social and technological (known as PEST analysis).
1.Political factors-It includes the role of government legislation, initiatives and funding to support the
use and development of e-commerce and information technology.