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E-Commerce Abstract: E-Commerce is a new marketing system which is technologically enhanced to facilitate business deals between merchants and consumers. This system was actually developed in the late 70 s and has become a dynamically growing commercial method that operates thru the use of technologically advanced system using the tried and tested theories of marketing and selling both tangibles and intangibles goods including services. The system primarily relies on the use of electrons moving through cyberspace but both merchants and particularly consumers are assured of the security against frauds. The new and advanced marketing technology facilitates the ease of transactions between consumers and merchants. It does not only solve the problem of ease and comfort for the buyers but also answers the need for quick delivery of services and goods.
A couple of virtual merchants and their track records are presented in the discussion of the effectiveness and feasibility of the new method. Outline What is E-Commerce? Definition Description Historical Background How Effective is It as a Model of Commerce? eBay as an Example of How E-Commerce Works Other Virtual Merchandisers How Safe is It? Safety Measures Program to Protect Both Consumers and Merchants Safety Measures Presently Developed and Enhanced What are the Benefits and Advantages of E-Commerce? E-commerce makes possible and easier a commercial transaction via electronics means.
The E stands for electronics that refers to the technology or system which is utilize in the transaction of the business and the 'commerce' refers to the traditional business model engaged in by merchants all over the world. Hence, E-commerce means electronic trade; a transaction that uses a system carried out and completed through the use of the so called EDI (electronic Data Interchange) and EFT (Electronic Fund Transfer). As compared to the traditional commerce, the exchange of goods, services, information and money between two or more entities is with the use of the Internet, computer networks or through the World Wide Web. This system was introduced as early as in the late 70 s where activities like purchase orders and invoices are electronically processed and had evolved to include new features as we use them today (Glossbrenner and Glossbrenner, 1995, p. 4 - 5). Graham (2004) traced the development of this particular kind of merchandising and claimed that it all started with the innovation of EDI which is basically the only method used to exchange business information and electronic transactions between entities. After which, along came the development of ATM (automated Teller Machines) and Telephone Banking System that brought forth and enhances the system of E-commerce.
The acceptability and workability of these methods made it possible to create a more active marketing online. From the 1990 s onward, the method has integrated the so-called ERP (Enterprise Resource and Planning), a system to cover a companys wide range of operations from manufacturing to supplying, finance, Customers Relations Management (CRM), Human Resources and Warehouse Management. It also developed data mining and warehousing, whereby internal and external information are stored in the database for analysis and applications. These schemes are innovations to the system that made E-commerce more workable and widespread. The business transaction is both physical and virtual although the majority and primary operations and activities are online and thus, electronically processed.
There are still some physical procedures that happen in the business deal which require manpower to get it on, like systems management and deliveries (This is only true, of course, if both parties are dealing with a tangible product). These are quite physical actions but without them transactions cannot be completed. The exchange of money does not actually occur in actual cash and coins or even a bank draft or check but rather through the use of automated means which make use of inter-banking and virtual banking with the help of electrons moving through cyberspace. Credit cards and wire transfers transactions are electrons moving in cyberspace but it bears with it the value of actual cash; this activity has become the most applied electronic transaction of today.
Although 100 % security is yet to be achieved due to fraudulent sites in the web, credit cards and wire transfer are still the most liquid when it comes to E-commerce. During the establishment of the dot com era, this particular activity was termed as "Web Commerce" and it refers to improvement of the network to a more secure connection between customers and suppliers. Observance of confidentiality becomes paramount in the emerging trade and the setting up of special Internet Protocols (IP) to encrypt order data of customers enhances this particular need for discretion and privacy. E-shopping carts are provided so customers can view their purchases even if they cannot hold it physically.
Then these are paid through credit cards or by electronic fund transfers, hence, provided greater protection to customers and suppliers transactions (Megna and Johnsons, full articles are found in the World Wide Web). In 1994, when e-commerce became well-known to the general public, it was forecasted that it will soon become a major economic sector and undoubtedly it has, that even brick and mortar companies like Wal-Mart had engaged in it. From then on, it covers a very wide range of business activities and processes, while the growing dependence of the modern industries to this usage leads to even greater development of its supporting systems like the backend systems, applications and middleware that became so vital for e-businesses to operate. It also introduces the fibre-optic networks that deal with areas like, supply-chain management; customer relationship management; inventory control and financial accounting. Softwares for this purpose were designed to effectively carry-out retailers engagement. Although many e-commerce retailers had waned during the collapse of the dot-com in 2000 - 2001, still, many brick and mortar companies recognize its significance and continue to identify electronically marketable good and services to their web site (Gere, 2004, full article is on the World Wide Web).
The online vendors, in their turn, get distinct advantages for the web and search engines find for them customers without expensive advertising campaign. E-commerce presented equal opportunity to both big and small shops. This new trading technology allows even small companies to reach global markets and track-on customer preferences as well as deliver individually-tailored marketing scheme. Gere (2004), made the diagram below which shows a model of how the first E-commerce transaction was transacted through the web in the 90 s.
When Netscape arrived in 1994, a more user friendly browser to surf the net was introduced with a secure online transaction technology called as Secure Sockets Layer. The later part of the last century made way for the Digital Subscriber Line (DSL) which provides a quicker, always online network to its subscriber which further boost and increase the viability of E-commerce and bring to the fore its existence to a more active market. It was in 1995 when the Amazon. com and eBay. com, two of the most popular online marketer were launched, and until today these two had grown to become a multi-million industry in the virtual world. Almost all virtual retailers use an almost identical model of operation such as shown in the diagram below (Gere, 2004): Although eBay is considered a smaller online retailer compared to Amazon.
com, yet there are lots of funds running through it, because it has become the center of the electronic business cycle and acts like a middleman. Purchase orders flew through it and suppliers relied on it and most importantly, the cash flows through it. As in the above model, it shows that the supplier, i. e. , retailer, distributor and manufacturers are the ones in-charged of deliver freeing virtual retailers from additional expenditure. eBay does not maintain warehouse or inventories except for data mining. Cost effectiveness made it flourishing, unlike brick and mortar companies, it need not maintain structures or building space to operate.
Also, it requires very minimal workforce to function as long as it provides secure connection to customers. Though it has no actual physical location, it covers a very wide area of operation serviced by a virtual store whose original website is in the US. Later on, after its boom, local websites were established in different countries to facilitate the business transactions coming from all over the world. eBay started as an auction website which later became several diverse businesses which was started with an online ticket vending company and other travel products.
According to Belbin (2004), the company does not have an actual inventory of merchandise for it sells almost all kinds of commodities including services and intangible products. It can also shift easily from one product or services to another depending on the supply and demand. The online trading company, after more than a decade of operation, more than tripled its worth and rapidly progress into selling almost anything as long as it is legal to sell it. eBay and the companies like it made marketing faster with less effort and expense; it made business and human lives better. Despite its imperfection, it can be relied upon somehow and to some extent. E-commerce is business friendly and it also makes trading a hassle free and stress secured activity.
This technologically enhance model of commerce free consumers from the rigors that accompany traditional mode of commerce. Acquisition of almost anything can be accomplish right there at your desk; with a click of a button services and products are within your reach and will be at your doorsteps without going through the trouble of dropping in on malls or stores and suffering the shopping crowds plus the traffic. There are certain products or services that appear more suitable for online sales while others remain more suitable for offline sales. But usually, an E-commerce company will survive not only based on its product, but also by having a competent management team, good post-sales services, well-organized business structure, network infrastructure and a secured, well-designed website. Technical and organization set-up that is customer oriented are more likely to be successful in this field. As with the traditional model of commerce, there are certain technical and organizational strategies that are peculiar to E-business.
Listed below are strategies which, as declared by Hafner (2004) are distinctive to this kind of model, these include: A good management team armed with information technology strategy. An easy and secured way for customers to effect transactions which provides them with reliability and guarantee. An operation that is on or near the cutting edge of technology and staying there and adapting as technology changes. An organization with sufficient alertness and agility to respond quickly to any changes in the economic, social and physical environment; provides customers with a complete understanding of the products or services offered. An attractive website that is tastefully use color, graphics, animation, photographs, fonts, and white-space percentage. A transaction process that is streamlined through re-engineering and information technologies.
There are numerous successful virtual companies in the web, and most of them deal with different products and services that include information (storage, retrieval, and modification), music, movies, office supplies, education, communication, software, photography, and financial transactions even fashion, home and beauty products. Successful electronic marketers such as eBay, Google, Amazon and countless others use drop shipping or affiliate marketing techniques which facilitate transactions of tangible goods without maintaining real inventory. Security issue about the safeness of electronic transaction is but natural to crop out and questions like: Were the goods delivered on time? Was it delivered in the proper address and the right person? Or, was it the actual and specified kind?
are just but some of the reservations that beset any customer who engaged in this kind of business. Customers are also troubled by the dilemma of whether the retailer is for real or a fraud, whether payment made by the customer is assured and insured to reach the destination and most especially whether his account is safe from hacking and fraud. As early as 1994, security precautions in the net went underway, it was considered risky not only to e-commerce side but also to other sites that uses the web, especially in government networks where there is a great presence of danger if it will be accessed or hacked by unauthorized identities and, get access to records or information that will jeopardize the organization... These issues are yet to be addressed effectively today, and it is doubtful that it will be 100 % safe later on. It is a fact that electronics can be manipulated and as we all know somewhere down the line there are those who breach commercial integrity whatever the costs are and enriched themselves whenever and wherever there are chances (Haynes, 1994) and (Graham, 2004). E-commerce is a state of the art business technology that provides convenience in addressing the supply and demand of consumer goods.
It cuts down time and space and most of all, it is just a mouse click away. It cannot be stopped nor it can be resisted, E-commerce is beneficial to everyone. It is the answer to industries that are separated by distance, it useful to smaller retailers and manufacturers in introducing their products globally, and most of all it is very convenient to busy consumers who do not have the time and cannot afford to go around spending hours looking for products they need. But among these positive benefits, there are also some downsides in the use of it that can actually be harm to an individual and to the community as well. There are people who are using the system for different motives and it has become a medium of prostitution, smuggling and fraud. However, it is understandable that these things happen because even without this system, criminal elements are always present.
The good thing is people in the IT industry are striving to make it clean and secure by endlessly designing software for its protection. According to Business. com, retail spending over the internet had reached to over $ 20 billion, meaning this particular sector which was practically unheard of two decades ago has transformed into a major industry in such a short time and still growing. Reference List Banks, Michael. (2005). The eBay survival guide. San Francisco, USA: No Starch Press.
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