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The Main Components of E-Commerce

some field experts would consider all business deals and activities that are being conducted
using modern Telecommunication and Information Technology methods as E-commerce.
World Wide Web, mobile phones, fax and TV are some of the methods people use to
conduct business nowadays. However, this article is going to focus primarily on the
components of E-commerce for an Internet business being the most popular platform for E-
commerce activities.

All E-Commerce sites have three components. The first is some type of catalog. A catalog
can vary from just a few items to a complex presentation of thousands of products. The
nature of the firm's operation determines the type of catalog required. In every case,
customers should be able to find the products of interest. Photos and product information
are important in creating appealing online catalogs.

Second, each site must have some type ofshopping cart to assist consumers as they select
products. Again, the shopping cart can range from just checking a circle for an item when
only a few products are offered to more complicated shopping carts that keep records of
multiple purchases.

Third, each site must establish some way for customers to make payments for the things
they purchase. For consumers, this normally is a credit card system. For business to
business operations, payments are normally made through a voucher system. In other
situations, a bill is generated or a computerized billing system is used so that the invoice
goes directly to the buyer. In more trusting relationships, the invoice is added to the
customer's records without a physical bill ever being mailed.

In spite of the fact that such systems are already in place, many consumers are still wary of
purchasing products over the Internet. There are two reasons for this reluctance: (1)
Security issues and (2) Purchase behavior habits.

(1) Security Issues:

Consumer fears about security are based on worries about credit card number being stolen.
Others are concerned about fraud where a retailer takes the money but does not ship the
merchandise. Both can cause people to resist making Internet purchases.

To resolve these problems, a review of the past may be helpful. When telephone orders
were first encouraged by email order firms, people were hesitant because of fears about
giving out a phone or credit card number to a stranger they couldn't see. Now, nearly
everyone is willing to provide the information while placing orders on the phone. Also, it
wasn't that many years ago that credit card holders expressed anxiety about various store
employees stealing those numbers. Originally, customers were instructed to - - take the
carbon - - from a credit card purchase to make sure it was torn into shreds in order to
prevent an employee from using the credit card number later.
The same pattern is likely to follow with internet shopping. As consumers become
accustomed to using the Web, fears about giving out credit card information will be no
greater than they are for telephone orders or credit card sales. IBM and Master Card have
created a series of independent television commercials designed to calm and reassure
people about the quality of their Internet security program; however, these efforts are set
back each time a major virus is turned loose. Also, the Verified by Visa program is designed
to create additional security for online credit card purchases.

(2) Purchasing Habits:

The second issue has strong ramifications regarding the ultimate success of E-commerce.
Currently, many customers are most comfortable when they buy merchandise at retail
stores. Some are also comfortable buying through catalogs. It will take time to change
these habits, especially the preference for retail shopping.

At the retail store, consumers can view and touch the merchandise. They can inspect it for
defects and compare brands. Clothes can be tried to make sure they fit. In addition, the
customer can see how the clothing item look while being worn. Changing these habits
requires the right kinds of incentives. Consumers and businesses must have valid reasons
for switching to making purchases via E-commerce instead of traditional methods (at the
retail store or following a call from a salesperson). To overcome this handicap, many E-
commerce firms are trying to develop incentives that will attract customers to make
purchases in this new format.

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E-Commerce Key Components

Six key components of E-commerce
1. Placement

This component is vital to any E-commerce business. It focuses on the business being highly visible and
easy to access (McGrawHill, 2002:73).
2. Merchandise and audience size

This component focuses on ensuring that product lines are kept in stock and that delivery is on time
(McGrawHill, 2002:103). The audience size of the e-business marketplace, spans across all geographical
boundaries. It is important to create capabilities that facilitate global commerce (McGrawHill, 2002:99)

3. Presentation

This focuses on two key context dimensions: function and aesthetics. Businesses can employ
presentation that is predominantly focused on one or the other in its presentation. At times, the two
contexts are combined (McGraw-Hill, 2002:132).

4. Payment

The marketplace capability integrates with other applications for financial and payment processing.
Applications include the ability to purchase using a credit card and require integration to provide supplier
invoice information to the buyer and to indicate invoice payment status (McGraw-Hill, 2002:89).

5. Security

This component must be given particular attention by e-businesses as it is an ongoing concern for
consumers. E-businesses must instill trust in its users by ensuring the security of all transactions and this
can be achieved through many methods such as encryption and authentication (McGrawHill, 2002:181).

6. Fulfillment

Once the online purchase order has been generated, the marketplace can allow buyers and sellers to
manage the fulfillment process. The fulfillment process must be enabled to ensure delivery (McGraw-Hill,
2002:89)

http://wiki.media-culture.org.au/index.php/E-commerce_-_Overview_-_E-
Commerce_Key_Components

Six components of a good e-commerce site

Author: Nowshade Kabir

Article:

Many of your competitors are already doing business through the Internet. You read that yearlygrowth
rate of e-commerce is over 25 percent. E-commerce segment for the businesses that sells to other
businesses or B2B, as it is called, is escalating even in a better pace. Naturally, at one point, you too
decide that you need to have a piece of this action! But, what are the maincharacteristics of a good e-
commerce site that you must consider even before you build one?
A small research will show that there are numerous choices for you to make your business presence
online. In fact, you can be overwhelmed with all the possibilities that are available on the Internet to build
an e-commerce website.

However, it is important to plan your website before even shop around for tools to build your site. There
are some basic components that all e-commerce sites include, such as product or service description
pages, a shopping cart - so that buyers can select and keep items from your product list till they generate
a purchase order or an invoice, a payment mechanism - so that buyers can pay for your products online
or offline. But, you also need to pay attention to the following crucial aspects:

Product information Buyers take their decision whether to buy a product from your site or not depending
on the information that you provide. That's why the product should have a clear and high-quality picture,
short and detailed specifications. If necessary add attachments of diagrams, sketches, video etc. along
with the product specification. Write clearly and prominently all sales terms and after sales supports
terms, etc.

If you have many products, it is better to use an industry standard classification system to categorize your
products. The goal is to have all the information related to the product available on the website, so that
the customer can take a positive buying decision instantly.

Different Ordering Methods The ultimate goal of your e-commerce site is to make sales. Many people
still don't feel comfortable to make payments through online transactions. You would be better off if you
include ordering processes by fax, telephone and ordinary mail. In fact, to have a telephone number for
customer support and order is a must for any e-commerce site as it gives buyers some extra feelings of
security. That way they know that they can always talk to a live person if anything goes wrong.

Different Payment Methods Although credit cards are by far the most acceptable means of payments on
the Internet, you should definitely consider other methods as well. For small payments, Paypal is
becoming increasingly a popular mode. All e-commerce sites should integrate this to their payment
methods. More options include: Electronic checks, e-bullion, Offline bank transfer etc.

Shopping Cart with Tax Calculation In your search for shopping carts look for the ones, which have
different tax calculation mechanisms inbuilt. If you are located in a province or state where your regional
tax gets calculated on top of the federal or vice versa, your shopping cart should have the ability to
calculate them correctly.

Guarantees As money back guarantees are becoming increasingly common on online sales you should
consider prominently posting your money back guarantee on you website. Be sure to make your money
back guarantee generous! Customers are becoming pickier on this issue. For example if you sell
knowledge base products like e-books, reports etc. make your hundred percent guarantees at least of two
months. For tangible products, after sales warrantees should be also considerably generous. Customers
should feel completely secured to buy at your website.

Privacy Policy Your website must have a privacy policy. Customers are very concerned about the
information that they are relaying to you. You must clearly explain them what you plan to do with the
various information that you collect from your customers. If your site is planning to use cookies, make
sure that you covered this aspect in your privacy policy too.

Security If your website collects sensitive information from your customers, you should use security
systems like SSL (Secure Socket Layer). This guarantees that the data provided by your customer will not
fall into the hand of a malicious hacker while transferring from his computer to the web server. This also
will reassure your customers that you are truly concerned about the security of their personal and
sensitive information.
Once you know how to handle all the above mentioned aspects, go ahead and look for a great tool to
build your dream e-commerce website and make money online!

About the author:

Nowshade Kabir, Ph.D., is the founder, primary developer and present CEO, of Rusbiz.com, a global
business to business e-commerce portal with feature like storefronts, aggregated catalog, e-marketplace,
trade leads, internal messaging system supply chain solutions, etc. With a doctorate in Information
Technology, Dr. Kabir has worked an advisor to government projects and has over 12 years experience in
International Trade.

 
Consumer Advantages of E-commerce

Joe Raedle/Getty Images

With online shopping, consumers can pre-order hot items avoiding standing in lines.

When CompuServe created its Electronic Mall in the 1980s, few consumers had even dreamed of an
online shopping environment. Now for many, it's become a way of life. Buying goods and services online
saves time, offers greater selection, allows for independent research and often saves the consumer
money.

It's hard to beat the Internet for convenience. A full 50 percent of adult Americans have broadband
Internet access at home [source:Pew Internet & American Life Project]. This type of always-on, high-
speed connection makes it simple to research and quickly buy goods and services. According to a 2008
survey by the Pew Internet & American Life Project, 78 percent of Internet users either agree or strongly
agree that online shopping is "convenient," and 68 percent say that it "saves them time" [source: Pew
Internet & American Life Project].
Let's look at airline tickets, for example. How did people buy airlines tickets before the Internet? If you
knew the airline that flew to your desired destination, then you could call them, find out the schedule and
prices, write it all down, and call them back when you were ready to purchase. If you didn't know which
airline was the right one, then you'd have to call a travel agent, or go down to the travel agent's office and
talk about different packages, rates and schedules.

Now, with the Internet, you can visit Web sites like Travelocity or Expedia. At those sites, you can
compare rates and travel dates from multiple airlines. You can assemble hotel and rental car packages,
reserve a tee time at the local golf course and pay for everything at the same time with your credit card.
An impressive 64 percent of adult Internet users have bought or made a travel reservation online
[source:Pew Internet & American Life Project].
The Internet is open 24/7. You can shop for shoes at midnight, rent a movie at breakfast and shop for
travel deals when you really should be working. With e-commerce, normal time constraints are no longer
an issue. You don't have to race from work to run six errands before the stores close. You can get your
chores done while you're still at work and do the rest after putting the kids in bed.

Top 10 Online Retailers

 1. Amazon.com
2. eBay.com
3. Wal-Mart.com
4. BestBuy.com
5. JCPenney.com
6. Target.com
7. Kohls.com
8. Overstock.com
9. Google.com
10. Sears.com
[source: Stores Magazine]

And no store, no matter how huge, can match the Internet for variety and selection. Instead of being
confined to stores in your immediate geographical area, you can shop from stores and Web sites located
one state over or halfway around the world. You can buy from big national chains or small home
businesses. With e-commerce, the consumer is in the driver's seat. If you put in the time, you can find the
best deals on the widest variety of products and services in the world.

According to the Pew survey, 81 percent of Internet users have used the Web to research a product
they're considering buying. In fact, 20 percent of Internet users say they research purchases on a daily
basis [source: Pew Internet & American Life Project]. Once again, this gives consumers power that they
never had before. In the past, you simply went to the store, looked at what they had, talked to a
salesperson and bought what seemed like the best choice. Now you can read endless reviews by
amateurs and professionals, compare prices from hundreds of vendors and even watch videos and
interactive demos about the products you're considering.
Now let's look at some of the top advantages of e-commerce for doing business.

-commerce levels the playing field for retail businesses. Even if you're a small, home-based company,
you can establish a global reach with a simple Web site. Anyone, anywhere with an Internet connection
can read about your product, and even better, buy it! You don't have to set up physical locations in
different cities. You just need to invest in a good Web site design and the right online advertising to catch
the attention of potential online clients.

Once again, online shopping puts consumers in the driver's seat. In some ways, that's good for the
vendor as well. The vendor's job is to put all the information on the Web site in a clear, compelling way.
But then he or she can sit back and let the consumer do the rest of the work. The vendor doesn't have to
hire and train salespeople to pitch the product or service. The Web site does it for the company. A well-
designed, well-written Web site can do double (or triple) duty as a marketing and advertising tool, a
salesperson and a cashier, all wrapped up in one.

Plus the Internet never closes. This means that your Web site is working for you 24/7. People can read
your marketing materials, test drive your products and buy them outside of normal business hours.

This is all part of a larger concept called "customer outsourcing" [source: The Knowledge Exchange]. With
an e-commerce Web site, anything that the customer does for himself -- like searching for airline flights,
entering his billing information and signing up for an e-mail confirmation -- is work that paid customer
service representatives don't have to do. That work, essentially, has been "outsourced" to the customer,
saving the company money on employees and salaries.
With certain products and services, the Internet is not only the salesperson and the cashier, but the
delivery guy as well. Think about digital downloads. You can go to iTunes or Amazon and download
music, movies, TV shows and music videos. Those products are delivered to you within minutes. The
company can save on shipping costs and related fees by delivering products directly to the consumer in
electronic form.

We hope this has been an interesting look at the advantages of e-commerce. For more information on e-
commerce, online business and related topics, check out the links on the next page.

-commerce levels the playing field for retail businesses. Even if you're a small, home-based company,
you can establish a global reach with a simple Web site. Anyone, anywhere with an Internet connection
can read about your product, and even better, buy it! You don't have to set up physical locations in
different cities. You just need to invest in a good Web site design and the right online advertising to catch
the attention of potential online clients.

Once again, online shopping puts consumers in the driver's seat. In some ways, that's good for the
vendor as well. The vendor's job is to put all the information on the Web site in a clear, compelling way.
But then he or she can sit back and let the consumer do the rest of the work. The vendor doesn't have to
hire and train salespeople to pitch the product or service. The Web site does it for the company. A well-
designed, well-written Web site can do double (or triple) duty as a marketing and advertising tool, a
salesperson and a cashier, all wrapped up in one.

Plus the Internet never closes. This means that your Web site is working for you 24/7. People can read
your marketing materials, test drive your products and buy them outside of normal business hours.

This is all part of a larger concept called "customer outsourcing" [source: The Knowledge Exchange]. With
an e-commerce Web site, anything that the customer does for himself -- like searching for airline flights,
entering his billing information and signing up for an e-mail confirmation -- is work that paid customer
service representatives don't have to do. That work, essentially, has been "outsourced" to the customer,
saving the company money on employees and salaries.
With certain products and services, the Internet is not only the salesperson and the cashier, but the
delivery guy as well. Think about digital downloads. You can go to iTunes or Amazon and download
music, movies, TV shows and music videos. Those products are delivered to you within minutes. The
company can save on shipping costs and related fees by delivering products directly to the consumer in
electronic form.

We hope this has been an interesting look at the advantages of e-commerce. For more information on e-
commerce, online business and related topics, check out the links on the next page.
What Are the Consumer Benefits of E-Commerce?
By Sarmaad Amin 

Consumers today don't realize how lucky they are compared to a couple of decades ago.
While many of us remember the days when what you purchased was what you found locally
or in a catalog, the younger generations don't. I guess that is part of the technology in
society and partially to blame for the generation gap out there.

However, I think we all have to admit that there are plenty of benefits for consumers when
it comes to e-commerce. Basically, no matter where you happen to live the internet allows
you the opportunity to buy what you want or need. It can be paid for online and then
shipped to you. This is very convenient as you don't have to leave your home to shop. You
also don't have to settle for the limited selection of items locally. If you want to give a gift
that is very unique you will certainly be able to find it online.

You can benefit from extremely fast shipping too so if you have put off shopping or just
didn't remember something coming up that isn't a problem. It may cost you a bit more to
get it there in a few days but most of the time it will be worth it when you see the look of
appreciation on the face of the person who has received it from you. If they are living far
from you, just order it online, have it gift wrapped and then delivered to their doorstep! Not
sure what to get someone? No problem, you can also send them gift cards to their email
account for them to redeem later.

Comparing prices is a great benefit to consumers of e-commerce. As there is so much

competition is rare that you won't find several sites that offer you exactly what you are
looking for. When you do compare prices though make sure you look at the whole picture.
You don't want to sacrifice quality to save yourself a few dollars. Make sure you are
comparing apples to apples. Don't forget to look at the return policies, the warranty offered,
and the shipping costs. All of these factors can help you to decide which one to purchase
from.

There are usually some additional savings too beyond what you see with e-commerce. If
any site you look at has a section for a coupon or discount code, then open up a new
browser to find one. They can save you money with dollars off, a percentage off, and even
free shipping. This type of savings can really add up fast so don't pass up this type of
benefit when you shop online.

How many times have you received a gift that you weren't completely happy with? That
doesn't have to happen though with e-commerce because you can create wish lists out
there. This is perfect for you to give those in your life a chance to buy you something you
really want or need. They will appreciate it too because it takes the guess work out of it.
They will know their money is going for something you really want.

Due to the overwhelming number of benefits to consumers, e-commerce isn't going away
but it is going to continue to grow. In fact, more traditional retailers are complaining that
they lose so much business to these online sites. Yet you can't blame consumers for going
where they benefits are and where the savings is. They want convenience, low prices, and
the convenience of shopping when it fits their schedule instead of the other way around.

Ecommerce businesses such as online store or online service company are becoming more
and more popular. With the increasing competition of ecommerce businesses, every
company use software in order to increase their efficiency. However, most of software
cannot fit everything for a particular business. Therefore, most of companies want to hire
a software development company to develop software for their business domain.
IDPSolution.com.au will provide an ecommerce solution that right for you by their custom
software development.

Article Source: http://EzineArticles.com/?expert=Sarmaad_Amin

E-Commerce Benefits
Benefits of E-Commerce
1. Reduce Production Cost

Replacing paper-based business operations

2. Better Information System

Faster data retrieval rate

3. Better Management System within organization

Central database for different departments of the company

4. Better Management System across different organizations

Data exchanges and transactions between different organizations from suppliers to customers

5. Better Business Strategy

Extending the business to cover more customers

6. Globalization

E-Commerce is the essential pathway to implement globalization

http://wiki.media-culture.org.au/index.php/E-commerce_-_Overview_-_E-Commerce_Benefits

E-commerce --- Advantages

The advantages of E-commerce are basically increased sales and decreased costs through the use of
electronical media, especially the Web. The advantages of E-commerce will be divided into the benefits it
provides to organizations, consumers, and society.

Advantages to Organizations

Due to the global reach of the Internet, businesses organizations are able to send messages worldwide,
exploring new markets and opportunities. This breaks down geographic limitations, and reaches narrow
markets that traditional businesses have difficulties accessing. Through the Internet, business now offer a
wide range of choices and higher levels of customer information and details for individuals to search and
compare. Some build-to-order companies such as Dell Computer Corp can even provide a competitive
advantage by inexpensive customization of products and services.

In terms of cost reduction, E-commerce helps organizations decrease costs in creating, processing,
distributing, storing and retrieving information. For example the communication and advertising costs
could be lower by sending e-mails and using online advertising channels, than by using television
commercials or the print media. In terms of online ordering and online auction organizations, the costs
could be lower than running an actual shop with the associated manpower.

Extended trading hours is another benefit, the 24 hours a day. 7 days a week in 365 days allows business
always free to open on the Internet without overtime and extra cost. Other advantages includes the up-to-
date company material, current inventories, improved customers service, better customers
communication, increased operating and trading flexibility

Advantages to Consumers

For customers, the advantages occur in the buying process, product research, evaluation and execution.
E-commerce provides customers with a platform to search product information through global markets
with a wider range of choices, which makes comparison and evaluation easier and more efficient. With
the ubiquity in accessing the Internet, consumers are able to search for shops or perform other
transactions anytime in almost location. Cheaper goods and services is one of the benefits for consumers
who purchase online. Furthermore, delivery time and costs can be saved by buyers when they purchase
digital goods and services. Examples are e-books, music and audio clips, software, games, and distance
education delivered via the Internet.

Advantages to Society

By telecommuting, individuals can nowadays work and do their purchasing at home rather than by
traveling around. This will result in less traffic and air pollution. For people in Third World countries, many
service and products are now available which were unavailable in the past; opportunities and higher
education services are more achievable for students. Non-profit organizations, including government
services, also benefit from E-commerce by the online payment system which supports the payment of tax
refunds and pensions quickly and securely. Public services such as health care, education, and public
social service also benefit from E-commerce. For example, rural doctors and nurses can access
professional information and the latest health care technologies. Overall, e-commerce makes products
and services more easily available without geographic limitations.
 Reference

Chan, H., Lee, R. Dillon, T., and Chang, E. (2001) E-Commerce: Fundamentals and Applications,
England: John Wiley & Sons, LTD, ISBN 0471493031

Turban, E., King, D., Lee, J., and Viehland, D. (2004) Electronic Commerce: A Managerial Perspective,
New Jersey: Pearson Prentice Hall, ISBN 0130094935

Yun Tze Pien 14:38, 19 Sep 2005 (EST)

The Introduction of eCommerce to the Consumer

By Bill Faulkner, eHow Contributor

Read more: The Introduction of eCommerce to the Consumer |

eHow.com http://www.ehow.com/about_6329686_introduction-ecommerce-consumer.html#ixzz1GNG0roEX
Computer continue to revolutionize an increasing number of facets of the human life, including the
way we shop. The Internet is capable of connecting potential consumers with a wide variety of online
shops and auctions. It also enables individuals to start businesses quicker and with greater ease, due
to eCommerce.
History
1. The emergence of eCommerce began in the late 1990s, with online retailer Amazon and
online auctioneer eBay leading the charge. When the dot-com bubble burst, many virtual retail sites
were unable to stay in business. An example of one of these failed ventures is Pets.com. The
company was in existence for less than two years before it folded. After this initial wave, brick and
mortar retails began increasing their online presence and operating their own sites. These traditional
merchants have been the fast-growing retail sites in recent years.
Significance
2. With the increasing prevalence and reliance on technology, the Internet has become
ubiquitous in modern society. It allows for business transactions to take place online. When
commerce happens via the Internet, it is referred to as "eCommerce." This modern method of
making purchases can take place over different kinds of sites, via auctions or classified ads, but all
these transactions constitute eCommerce.
 Types of eCommerce
3. Many industries offer goods for sale over the Internet but may do so in different ways. One
method of eCommerce is for an individual to purchase goods via an auction site. Ebay is the most
successful site to use this method. Another method is when goods are sold from brick-and-mortar
retailers via online sites. Brick-and-mortar retailers refer to companies which have physical stores,
such as Target or WalMart. Online classifieds also constitute a form of eCommerce. Craigslist is the
most popular example of this kind of site and offers a wide array of items and services.
Consumer benefits
4. The primary benefit to eCommerce is convenience. With online shopping, a consumer need
not even leave the house to purchase goods. Additionally, people who have computer access at
their jobs are able to make purchases from work, if company policy does not prohibit doing so.
Beyond the convenience of shopping online, a benefit to eCommerce is the ability for consumers to
track purchases made online. The major delivery companies offer tracking, and this can be
requested easily.
Retailer benefits
5. In addition to benefits for consumers, eCommerce has definite advantages to retailers, too.
One such benefit is the ease of market analysis. With electronic tracking, a company can easily
identify trends with consumers and determine target markets. Stock management also becomes
easier, as a company is better able to understand and anticipate demand. Using this information,
retailers are capable of ensuring an adequate amount of supply.
Cyber Monday
6. With the advent of eCommerce, the Monday following Thanksgiving has come to be known
as "Cyber Monday." The reason behind this name is the thought that some employees return to work
after the long weekend and shop from their desks. Data shows that most online transaction
purchases actually happen the last Monday with at least a week remaining before Christmas.
Warnings
7. The convenience of eCommerce comes with potential dangers and pitfalls. One such issue
for consumers to be careful of is Internet scams. An example of this is fradulent listings on Craigslist.
Another concern for online shoppers is identity theft. It is important for anyone shopping on the
Internet to only use trusted sites.
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References
 MSNBC: Cyper Monday? That's Next Month
 CIO: E-Commerce Definition and Solutions
 Open Learn: Issues and problems affecting internet, e-commerce and e-business
development
 Cnet News: Pets.com latest high-profile dot-com disaster

http://www.ehow.com/about_6329686_introduction-ecommerce-consumer.html

Advantages of E-Commerce for Business

A major reason as to why many companies are seeking to harness the Internet is
because it’s an additional source of revenue via an alternative marketing and
distribution channel. As well as providing the opportunity to reach millions of consumers,
the interactive nature, the many possibilities for its use, and the resourcefulness and
rapid growth of its supporting infrastructures, result in many potential benefits to
organizations, individuals, and society. The following part of this article provides some
explanation of the e-commerce benefits to organizations, individual customers and
society:

Benefits to Organizations

Global Reach – EC expands the marketplace to national and international markets.

With minimal capital outlay, a company can easily and quickly locate the best suppliers,
more customers, and the most suitable business partners worldwide. Expanding the
base of customers and suppliers enables organizations to buy cheaper and sell more.

Cost Reduction – EC decreases the cost of creating, processing, distributing, storing,

and retrieving paper-based information.

Extended Hours: 24/7/365 – The business is always open on the Web, with no
overtime or other extra costs.

Benefits to Consumers
Ubiquity – EC allows consumers to shop or perform other transactions year round, 24
hours a day, from almost any location.

Participation in Auctions – EC makes it possible for consumers to participate in virtual

auctions. These allow sellers to sell things quickly and buyers can locate collectors’
items and bargains.

Electronic Communities – EC allows customers to interact with other customers in

electronic communities and exchange ideas as well as compare experiences.

Benefits to Society

Telecommuting – More individuals can work at home and do less travelling for work or
shopping, resulting in less traffic on the roads and reduced air pollution.

Higher Standard of Living – Some merchandise can be sold at lower prices, allowing

less affluent people to buy more and increase their standard of living.

For HMV, the greatest advantages e-commerce can provide is reduction in costs and
improved management of services. Operating via a website allows the company to
"stock" as many items as possible as there aren’t the constraints of floor space as in the
retail stores. Consumers can choose their product and then HMV can dispatch it from
the warehouse. Costs of a large out of town warehouse would be significantly lower
then stores on the high street. Flagship stores can remain, but stores that are not
performing well can be sold off, releasing funds to further expand online operations.

Limitations of E-Commerce for Business

Turban (2008) suggests the following are some of the limitations of e-commerce that
are classified as technological or non-technological:

Technological Limitations

 Lack of universal standards for quality, security, and reliability.

 The telecommunications bandwidth is insufficient, especially for m-commerce (electronic
commerce via mobile phones).
 Difficulty in integrating e-commerce infrastructure with current organizational IT systems
- Many companies use IT systems, which are old (i.e. legacy systems). These were
developed to support different needs and different kinds of software and applications.
These systems contain valuable business information but have to be integrated with new
ones. In many occasions this is extremely difficult. When it comes to full integration with
back-office operations, for example, the cost of integrating legacy systems with modern
ones may be greater than that of actually scrapping them completely.

Non-Technological Limitations

 Security and privacy concerns deter customers from buying.

  Lack of trust in EC and in unknown sellers hinders buying.
 Many legal and public policy issues, including taxation, have not yet been resolved.
 Online fraud is increasing.
 Some customers like to feel and touch products. Also, customers are resistant to the
change from shopping at a brick-and-mortar store to a virtual store.

But the greatest limitation for HMV in regards to e-commerce is security. Security is the
principal issue in promoting e-commerce for both buyers and sellers. The current
consumer opinion of Internet security is summarized by Strom (1997), who says:

"The perception of insecure transactions will continue to prevent many shoppers from
making their first Internet-based purchases. While consumer attitudes about paying for
goods and services online will slowly improve over the next few years, it will not be
enough to fuel a rapid growth in ecommerce."

However, there is a certain lack of logic and considerable inconsistency in the attitudes
of consumers regarding Internet transactions. Although evidently extremely wary of
credit card payment over the Internet, consumers apparently do not think twice about
revealing their credit card number over the phone or allowing the card to be taken out of
sight by a waiter in a restaurant. So HMV shall have to educate consumers on online
security by displaying noticeable SSL security logos to help build consumer confidence

Read more: http://www.brighthub.com/office/entrepreneurs/articles/50145.aspx?
p=2#ixzz1GNGHT6rE

uture Trends in Ecommerce

In the future, it has been suggested by researchers that the task of searching for
suppliers and products may be taken over by software agents that have defined rules or
some degree of intelligence that replicate that of humans. Intelligent software agents will
find the best products and best prices for customers. These autonomous intelligent
agents will be personalized and run 24 hours a day. Consumers will use agents to find
the best price for products or services. Companies will use agents in place of human
purchasing agents.

For another example, stock control management at HMV would significantly improve. In
traditional stores, weekly deliveries arrive of an assortment of music, DVDs and games.
However, demand is hard to predict of what is most likely to sell and so many areas of
floor space can be seen as being wasted. E-commerce shall allow HMV to centrally
monitor sales, and when stock levels are low in a warehouse, a further order can be
dispatched. Also, as a retailer, HMV would admit it is exposed to loss of sales through
shoplifters and theft. In an online store, this is impossible as products are dispatched
once payment is received.
E-commerce will be become an increasingly important method of reaching customers,
providing services, and improving operations of organizations. According to Turban
(2008), the future of ecommerce is based partially on some of the following
technological and non-technological trends:

 Internet usage – The number of Internet users will increase rapidly over the years.

 Opportunities for buying – The number of products and services available online is
increasing rapidly with improved trading mechanisms, search engines, online shopping
aids, intermediary services and presentations in multiple languages.

 M-Commerce – With over 1.2 billion people using mobile phones in 2003, the ease with
which one can connect from them to the Internet, and the introduction of 3G capabilities,
it is clear that m-commerce will play a major role in EC.

 Increased Security and Trust – One of the major inhibitors of growth of B2C and B2B
EC is the perception of poor security and privacy and lack of trust. As time passes,
significant improvements in these areas are expected.

References

 Worldwide Internet Users Top 1 Billion in 2005

 BusinessWeek
 Toward Digital Intermediation in the Information Society - Journal article by Richard
Hawkins, Robin Mansell, W. Edward Steinmueller; Journal of Economic Issues, Vol. 33,
1999
 Patricia Seybold Group
 The Challenge of Electronic Commerce: Selling lemonade has never been this tough

http://www.brighthub.com/office/entrepreneurs/articles/50145.aspx?p=3

Introduction

Approximately one fifth of total e-commerce is accounted for by business-to-consumer transactions

(OECD, 2000: 55). Consumer and user trust is essential for its future development. Therefore,
cooperation by business and consumer organisations in developing a united approach to the
development of consumer protection strategies for e-commerce is a vital step in improving consumer
protection and consequently consumer confidence in this new way of doing business (Australian
Competition and Consumer Commission, 2005).
the Guidelines for Consumer Protection in the Context of Electronic
Commerce

The Guidelines are established to encourage a global approach to consumer protection in the e-
marketplace, a sector that is international and borderless (Rayport, 2000:58). These guidelines are able
to facilitate on-line commerce consumer protection mechanisms without causing barriers to trade and by
increasing consumer confidence in e-commerce, assist in worldwide economy (Australian Competition
and Consumer Commission, 2005).

The Six Concepts Outline for Consumer Protection

 Transparent and Effective Protection

Consumers are to be protected regardless when shopping through the e-marketplace or through local
stores. This will ensure consistency and gives assurance to the consumers while shopping (Australian
Competition and Consumer Commission, 2005).

 Fair Business, Advertising and Marketing Practices

Fairness and equality are important during business transactions. For examples, advertising should be
clear and understandable for people of all ages. Consumers are to be respected and businesses should
take special consideration (language, information) when targeting different target markets (Australian
Competition and Consumer Commission, 2005).

 On-line Disclosures About the Business, the Goods and Services, and the Transaction*

When purchasing goods online, disclosure should include complete and accurate information about the
business, about the goods or services for sale and about how the transaction is made. This will keep the
consumer well-informed and awareness of the transaction going on (Schneider, 2002:119).

 Confirmation Process

The confirmation process for a sale should give the consumer a chance to see what he has agreed to buy
and to change his mind if he wants before the purchase is completed (Australian Competition and
Consumer Commission, 2005).

 Secure Payment Systems

Payment systems need to be secure and consumers should be taken through a step by step procedure to
assist them (Australian Competition and Consumer Commission, 2005).

 Education
These guidelines also encourage governments, business and consumers to work together to educate
consumers about electronic commerce, to foster informed decision making by consumers participating in
electronic commerce, and to increase business and consumer awareness of the consumer protection
framework that applies to their on-line activities (Australian Competition and Consumer Commission,
2005).

References

1. Rayport, J. F. (2002) Introduction to e-commerce, Boston: McGraw-Hill/Irwin marketspaceU,ISBN

0072510242.

2. Schneider, G.. P. (2002) E-Commerce, Massachusetts:Course Technology-Thomson Learning,ISBN

0619044160.

3. Australian Competition and Consumer Commission (2005)"E-Commerce", retrieved 26 October, 2005

Yipshinyi 12:01, 28 Oct 2005 (EST)