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?
- Customers buy products and services online INTERNET
- Network contains Web hosting, security, and backup
- 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