What Is E-Commerce?

What is electronic commerce (e-commerce)?

• Financial business transaction that occurs over an electronic network
• Sometimes called e-business

How are e-commerce transactions conducted?

• Primarily through desktop computers
• Wirelessly using handheld Web-enabled devices

What is a bricks-and-mortar business?

• Company with a physical location, such as Wal-Mart or Kmart

What is a clicks-and-mortar business?

• Company with a bricks-and-mortar location as well as an online presence
• Some companies have online presence without physical locations – E*Trade and Amazon.com

How has e-commerce grown?

• Estimates are that by 2005 worldwide e-commerce will exceed $5 trillion

What is business-to-consumer (B-to-C or B2C) e-commerce?

• Sale of products or services from a business to the general public

How might a B2C e-commerce business operate?

1. Customers buy products and services online INTERNET
2. Network contains Web hosting, security, and backup
3. Warehouse receives and fulfills order

What is disintermediation?

• Sell products to consumers without using traditional retail channels
• Enables companies to maximize benefits by eliminating middleman

What is consumer-to-consumer (Cto- C or C2C) e-commerce?

• Individuals using Internet to sell products to other individuals – Online auction, such as eBay

What is peer-to-peer (P2P) e-commerce?

• Users connect to each other’s hard disks and exchange files directly
• Consumer can pay another consumer to copy file

What is business-to-business (B-to-B or B2B) e-commerce?

• Sale and exchange of products and service between businesses
• Many businesses engage in both B2B and B2C
• Supply chain creates and distributes products

What is vertical B2B e-commerce?

• E-commerce site specializing in a particular industry

What is business-to-employee (Bto- E or B2E) e-commerce?

• Use of intranet technology to handle activities that take place within a business
• Increases profits by reducing expenses within a company

What are some advantages of e-commerce?

• Global market 24/7
• Businesses have access to 459 million people with Internet access
• Customers can conduct price comparisons easily
• Feedback can be immediate
• Changing information can be available quickly
• FAQ (frequently asked questions) pages can provide easy access to customer support
• Ability to gather customer information, analyze it, and react
• New and traditional approaches to generating revenue
• Manufacturers can buy and sell directly, avoiding the cost of the middleman
• Distribution costs for information reduced or eliminated
• Options to create a paperless environment

What is a revenue stream?

• Method a business uses to generate income
• Single Web site may use more than one method of generating revenue

What is electronic software distribution (ESD)?

• Sale of digital products such as software, music, movies, books, and photographs
• Purchase entitles you to download one copy of item

How is revenue generated with software rental?

• ASP charges a rental fee before you can access and use Web application software
• Microsoft’s Web applications are called .NET

What is advertisement revenue?

• Sites earn commissions from advertising sponsor when visitors make purchases as a result of clicking advertisement on Web page

How is revenue generated with an informational Web site?

• Visitors are required to subscribe to service
• Provides some information at no cost, but requires a subscription to access content of entire site

What is a Web hosting service?

• Assists people and companies in hosting their Web site
• Provides hardware, software, and communications required for a Web server
• Some provide services that include managing payments and tracking inventory

How is revenue generated with Internet access?

• Some sites, such as MSN and AOL, provide Internet access
• Many have become portals offering other services

What is an electronic storefront?

• Web site where e-retailer displays its products
• Shopping cart allows customer to collect purchases
• Also called online catalog

What is a secure checkout?

• Web site where customer enters personal and financial data
• Transaction and financial data automatically are verified at a banking Web site

What is online banking?

• Pay bills from your computer
• Transfer money electronically from your account to a payee’s account

What is online trading?

• Invest online in stocks, options, bonds, treasuries, CDs, money markets, annuities, and mutual funds without using a broker
• Transaction fees are less expensive

What travel services are available on the Web?

• Driving directions and maps
• Airline, hotel, and car reservations

What is a shopping bot?

• Web site that searches for the best price on a specific product
• Also called a shopbot

What is e-commerce software?

• Allows merchant to set up a storefront
• Includes security
• Some include statistical tracking features and capability of integrating with other systems