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Chapter 11

Chapter 11 E-Commerce What Is E-Commerce? E-commerce —the term u sed 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.

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Chapter 11

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  1. Chapter 11 E-Commerce

  2. What Is E-Commerce? • E-commerce—the term usedtodescribe 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.

  3. Benefits of E-Commerce • To businesses: • Reduced costs. • Increased customer satisfaction. • More effective management tools. • Potentially higher sales.

  4. Benefits of E-Commerce, Cont’d. • To customers: • Convenience. • Easier comparison shopping. • Higher degree of selection. • Potential cost savings.

  5. 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.

  6. 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.

  7. Types of E-Commerce Web Sites • Manufacturer and e-tailer Web sites • E-tailers (electronic retailers) • Electronic storefronts

  8. Types of E-Commerce Web Sites, Cont’d. • Brokerage sites • Onlineauctions • Financial brokerages • Market and commodityexchanges

  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.

  11. 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

  12. 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.).

  13. Implementing Web-Based E-Commerce, Cont’d. • Step 4: Design and develop an effective Web site. • Storefront software (either packaged or Web-based) • Shopping cart software

  14. 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.

  15. Security Issues • Secure financial transactions. • Secure sensitive documents and files. • Authenticate online business partners.

  16. 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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