E-Commerce

=E-commerce=

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Introduction
E-Commerce stands for electronic commerce. According to Encyclopedia Britannica Online, e-commerce is the, “maintaining business relationships and selling information, services, and commodities by means of computer telecommunications networks” (Britannica,). Clearly, the biggest network available which connects everyone together is the internet. E-Commerce has allowed people to trade almost all kinds of goods via the virtual marketplace. Even though the setting-up and operations cost of running and maintaining an e-commerce site is incredibly low in comparison to the more traditional brick and mortar retailers, getting people to know your e-commerce site, use the site to trade and even just browse around your site is indeed a greater challenge. This is mainly because people are more attracted to well designed e-commerce sites in terms of general usability features of the site. Good usability features include simplicity and clarity, easy to navigate through, and should have an appealing and functional interface. Good examples of e-commerce sites that have proven to be very successful e-businesses are Amazon.com and e-bay. E-Commerce has proven to be a great business tool. However, even though there were many businesses that saw the potential of the internet as a valuable business tool in the late 1990’s to early 2000, not many survived the dot com bubble burst of the early twentieth century.

Types of E-Commerce
1) Business to Consumer - this is the use of electronic technology to exchange money for goods or services between a business and consumer. (Plante, 2006)

2) Business to Business - this is the use of electronic technology to exchange money for goods or services between businessess. (Plante, 2006)

Advantages of E-Commerce
Some of the advantages and disadvantages of E-Commerce as outlined by Hertha Kettler and the Strategic E-Commerce Solutions website are; · Larger audience – E-Commerce allows traders to sell products to a much broader audience worldwide unlike traditional retailers who can only sell to an audience present within a limited geographical area · Lower costs of operations – Building and maintaining an E-Commerce site is much cheaper than running a more traditional brick and mortar retail store. As a result, E-Commerce businesses have a greater potential for making more profits and thus passing down the benefits to consumers by charging them lower prices · Competitive Advantage – Companies that go online usually stay ahead of rivals in terms of optimizing product development cycle, it compresses order-to-delivery cycles and it allows companies to better allocate and utilize resources · Reduction of Marketing and Advertising Costs - Internet marketing can be highly targeted to your specific customer; it is more effective and provides a higher return on investment than traditional media advertising. · Business is always running – that is, it never closes for customers can make orders and purchases any time 24hrs a day 7 days a week · Provide Customers valuable information about your business - Easy to find contact information, store hours, product information, and answers to common questions all add to creating a positive customer experience.

- customers get to compre prices at differnt online stores and reatailers at ease - customers do not have to physically make a trip to the store = =

**Disadvantages of E-Commerce**

 * Digital divide issue – not everyone has access to computers and the internet which is the main platform that hosts E-Commerce website
 * Content – Internationalization, localizing and translating text is a cumbersome task because the websites have to be customized to appeal to different global audiences who have different tastes and cultural background
 * If the network which hosts your website is down (i.e no internet connection) the company might end up losing so much revenue
 * Customers do not actually get to physcially touch or see their products
 * It may take days and perhaps weeks for the shipping to arrive
 * The seller may not be a reliable source
 * The cost of shipping can be very expensive
 * Customers may have to pay import taxes and dutes on international orders
 * Customers must ship the product back to the seller if they wish to return it, they cannot just refund or exchange it at the store

Examples of E-Commerce

 * **Shopping Online** (such as [|e-Bay], products from online stores)
 * **Online Banking** (almost all banks have an online banking option, such as [|RBC] and [|CIBC])
 * **E-Learning** (people can now get their degrees online through major colleges and universities)
 * **E-mailing** (such as [|MSN], [|Yahoo!], and [|GMail])
 * **Reading the News online** (most of the major newspapers allow people to access their news through the Internet, such as [|The Toronto Star])
 * **[|osCommerce]** (free Linux based software that allows a user to create a e-commerce site within a few hours, takes minimal knowledge of the Linux operating system however)
 * **ATM** (A person withdraws $1000 from an ATM)
 * **EDI Network** (Customer purchases merchandise using an EDI network)

Competitive Advantage Analysis
Entering any kind of industry is a risky factor, and e-commerce is no different. To analyze the e-commerce industry and how to enter or expand in that market, we can use Michael Porter's Five Forces Competitive Model.This model will help a business understand the impact of technlogy and the attractiveness of a business (Haag).

Consider the following: > >
 * 1) Technology has made it easier for many business. A increase in suppliers has happened because of the ease of entering the e-commerce industry. Because of this, buyer power is high and is steadily increasing.
 * 2) Entry barriers are now a lot easier to break. For example, the Intenet allows people to contact other business across the world, thus eliminating geographic boundaries.
 * 1) Because it is so easy to enter an industry, there are new services and products always being available. (Haag)