Download E-Commerce

Chapter 11
E-Commerce
1
What Is E-Commerce?

E-commerce—the term used to describe performing
business transactions online.

E-commerce has been growing at a steady pace.

One estimate predicts that 18% of all purchasing will
be performed over the Internet by 2006.

Brick-and-mortar, dot coms, and click-and-mortar
stores.
2
Benefits of E-Commerce

To businesses:

Reduced costs.

Increased customer satisfaction.

More effective management tools.

Potentially higher sales.
3
Benefits of E-Commerce, Cont’d.

To customers:

Convenience.

Easier comparison shopping.

Higher degree of selection.

Potential cost savings.
4
Risks of E-Commerce

To businesses:

Pressure to be “always open.”

Lost business due to customer hesitation to shop
online.

Risk of fraudulent credit card transactions.

Ease of entry for competitors.
5
Risk of E-Commerce, Cont’d.

To customers:

Fraud and other potential security problems.

Not being able to feel or touch the goods.

Possible expense to the customer of returning
merchandise.
6
Types of E-Commerce Web Sites

Manufacturer and e-tailer Web sites

E-tailers (electronic retailers)

Electronic storefronts
7
Types of E-Commerce Web Sites,
Cont’d.

Brokerage sites

Online auctions

Financial brokerages

Market and commodity exchanges
8
9
E-Commerce Business Models


Business model—describes a company’s policies,
operations and technology and how it generates
revenue.
Most common e-commerce business models:

Business to consumer (B2C)

Business to business (B2B)

Consumer to consumer (C2C)

Business to government (B2G)

Intermediary hubs
10
Implementing Web-Based
E-Commerce
Five basic steps:

Step 1: Select appropriate
business models and types of
Web sites.

Step 2: Select desired
e-commerce applications.
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Implementing Web-Based
E-Commerce, Cont’d.

Step 3: Develop procedures for handling electronic
financial transactions.

Credit and debit card processing

Electronic checks

Online payment accounts

Electronic gift certificates, gift cards, and coupons

Smart cards

Digital wallets
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14
Implementing Web-Based
E-Commerce, Cont’d.

Special considerations for B2B financial transactions.

Using a B2B transaction processing company
(payment processing, credit checking, escrow
services, etc.).

Using an order-fulfillment company (order
management, shipping, inventory, returns
processing, marketing tools, etc.).
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Implementing Web-Based
E-Commerce, Cont’d.

Step 4: Design and develop an effective Web site.

Storefront software (either packaged or Webbased)

Shopping cart software
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17
Implementing Web-Based
E-Commerce, Cont’d.

Step 5: Implement appropriate sales and marketing
strategies.

Include adequate customer service features.

Collect taxes from customers only if required by law.

Display a privacy policy and security statement.

Use an appropriate domain name and URL.

Promote your Web site sufficiently (promote URL, use
meta tags, etc.).

Data warehousing and mining.
18
Security Issues

Secure financial transactions.

Secure sensitive documents and files.

Authenticate online business partners.
20
Summary

What is e-commerce?

Types of e-commerce Web sites

E-commerce business models

Implementing Web-based e-commerce

Security issues
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