E-Commerce

1. E-Commerce By: Jude Johnson, NikkilynnLara, Mike Kazarian, Jake Kemble, Rachel Mann

2. What is E-Commerce? • The buying and selling of goods and services over public and private computer networks • This definition is restricted to purchasing and selling transactions • Merchant Companies by goods for resale • Non-Merchant Companies arrange for the purchase and resale of goods without taking ownership

3. Early Development • Originally, electronic commerce meant the facilitation of commercial transactions electronically, primarily by using Electronic Data Interchanges (EDI) and Electronic Funds Transfers (EFT) • Allowed the transfer of purchase orders and invoices electronically • In the 80’s, ATMs and credit cards were added to the e-commerce • The 90’s included enterprise resource planning systems (ERP), data mining, and data warehousing.

4. Early Development Cont. • In 1994, as the Internet gains popularity, E-Commerce becomes more prevalent • It took about four years to develop the security protocols and DSL to allow rapid access and a persistent connection to the Internet

5. Merchant Companies • Business to Consumer • Customers enter the web-site and manage their orders • Business to Business • Raw materials and other goods are sold and distributed between companies • Business to Government • Suppliers, distributors, and retailers sell goods to the Government

6. Non-Merchant Companies • Auction houses • Matches buyers and sellers by using an e-commerce version of a standard auction • Clearing houses • Goods and services provided at a specific price and arranged for delivery, but the clearing house never takes the title to the good • Electronic exchanges

7. Business to Business *B2B e-commerce occurs when a business sells products and services to other businesses *MRO items: maintenance, repair, operations

8. B2B E-Marketplaces *E-marketplace is an interactive market space where multiple buyers and suppliers engage in e-commerce activities *Sharing critical information *Development of products and parts *Collaborating new ideas *Undergoing project applications

9. 2 E-Marketplaces Horizontal E-Marketplace: connects buyers and sellers across many industries, primarily for MRO materials commerce Vertical E-Marketplace: connects buyers and sellers in a given industry Examples: oil, raw materials, and retail items

10. Marketing Mix *long-term relationship *more business actions: negotiations on -prices -specifications -delivery time

11. GSX: Global Services Exchange *marketplace for businesses to interact with each other in order to undergo e-commerce for mutual benefits *enables the real-time flow of information between businesses regardless of standards, language barriers, or geographic location *world’s largest global platform *2005: processes more than 4 BILLION business documents

12. Web Technology • Plays a vital part of e-commerce • HTML-Hypertext Markup Language • Hyperlinks • Three tier architecture

13. New Techonolgies • New technologies are developing due to success of e-commerce • They develop due to increasing competition. • Examples are: • Amazon.com-One click, which keeps customer’s credit card info • iPix’s 360 degree images-greater dimension to pictures. • Ajax-pulls relevant data forward to allow for seemless shopping

14. Information Systems • Effective tool for competitive strategies • Use of RFM • Find out who is shopping: • Recent, Frequent, and how much they spend • Customers can leave comments

15. Information Technology 3 Types Businesses Use: Electronic Data Interchange (EDI) Electronic Fund Transfer (EFT) Secure Socket Layer (SSL)

16. Electronic Data Interchange (EDI) • “EDI” is the transfer of data between different Businesses using networks. • The most common type of networks used are: • VANS • Ethernet • EDI replaces the process of faxing and mailing papers, making the Business more efficient while reducing costs.

17. Electronic Fund Transfer (EFT) Electronic Fund Transfer is when: • A cardholder makes a transaction using a payment card. (Ex. ATM/Credit card) • An Electronic payment is made from a business. (Ex. Paycheck) • An Electronic check is used for payment by a business.

18. Electronic Funds Transfer • Many types of transactions can be performed by businesses such as: • Sale - Enquiry • Refund - E top-up • Withdrawal - Administrative • Deposit • Cash back • Inter-account transfer

19. EFT Authorization Types: • Single Message Clearing: • Is when a financial network authorizes and clears the transaction in the same message. • Dual Message Clearing • Is when a “hold” for the total amount purchased is placed on the funds authorized for a specific time, until the transaction is cleared.

20. Secure Socket Layer (SSL) • A protocol that uses a cryptographic system. • This system uses two keys to encrypt data. • The key is used for the business to decipher the incoming data. • Businesses use this system in order to give and obtain confidential information such as credit card numbers.

21. Advantages • E-commerce improves Market Efficiency by: • Disintermediation • Improved flow of price information • Knowledge of price elasticity • B2B markets are built around open standards and communication infrastructures of the internet. • Provide open-networks • Aggregate product and price information and match supply and demand to facilitate transactions between buyers and sellers

22. Disadvantages • Security weaknesses pose a constant threat • User Interface components ( toolbars, keys, etc.) may be overwhelming • Information sharing between buyers and sellers are limited • Vendor trustworthiness is compromised by e-commerce through its anonymity, impersonality and automation

23. Future of E-commerce • Critics believe e-commerce is declining • Others believe that it is evolving • M-Commerce- Mobile Commerce • Shopping via cell phone, PDA, Blackberry • Becoming more and more frequent