E-commerce is any transaction that is executed through the internet. The majority of internet users interact in some kind of e-commerce. For example. whenever you use Amazon or transfer money using Paypal, or buy something on eBay, you are engaging in electronic commerce. E-commerce is one of the most important functions of the internet because it allows businesses and consumers to conduct transactions more efficiently. E-commerce is efficient because it allows people to exchange goods and services without time or distance barriers. E-commerce has been expanding rapidly over the past several years and has been predicted to be implemented even more in the next few years to come. This means that eventually nearly all transactions will be executed over the internet, and lead to the depreciation of the traditional brick-and-mortar store for many industries.
History of E-commerce
E-commerce emerged in the late 1970s but was nothing like today’s world of e-commerce. Technologies like Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) gave businesses a protocol for exchanging information and executing transactions. These technologies did not use the internet, and so did not have anywhere near the efficiency of modern e-commerce. In 1994 the internet became available to the general public, but it wasn’t until 1998 that security protocols were developed enough to ensure a secure transaction over the internet. At around this time, the dot-com bubble phenomena began. Lots of “dot-coms” or business that exist solely on the internet, began to develop. Larger, more established businesses saw the success of many dot-coms and went online as well. Investors recognised the benefit of businesses going online and invested in anything that “added an ‘e-’ prefix or ’.com’”. Because of this trend, lots of new dot-coms were started and even more brick and mortar businesses went online. Between 2000 and 2001, the stocks whose value had been inflated over the past 2 -3 years, collapsed, destroying many new dot-coms, and severely damaging the value of many others. Cisco’s share value dropped 86%, and Amazon’s share price dropped 93%. The bursting of the bubble did little to give faith to investors looking to invest in internet based companies. This slowed the proliferation of websites. Sites like Amazon and eBay became giants because of the high risk of starting off in the e-commerce market. In 2003 Amazon posted its first annual profit since the popping of the bubble, which began the restoration of faith in the dot-com start-up idea. Today,66% of adults have bought something online, but far fewer have ever thought to sell something on the internet. The Amazon affiliate program is a great way for the average person to get involved in e-commerce. Paypal has customizable buttons to put on web pages to allow users to purchase goods. Site builders like Squarespace and Weebly have buttons to allow customers to buy your products. Google Adsense allows you to monetize your website content with ads. All in all, e-commerce has advanced significantly in its stability, ease of use, and breadth since its inception in the late 90s.
Customer to Business Transaction Versus Business to Business Transaction
Consumer to business transactions can be defined at a transaction between a non-business entity and a business. These transactions are identified by an easy to use interface, often including a “shopping cart” and systems to make the transaction as simple as possible. The consumer usually never interacts with a human through the transaction. A business to business transaction, though, looks very different. Business to business transactions are most often used to communicate to suppliers and for business to communicate to the businesses they supply. These transactions are usually initiated with a negotiation with a representative from each company. The businesses will agree to the terms of the transaction, which will often be long-term agreements or regular deliveries, but vary drastically from one situation to another. Withdrawals are usually taken automatically from client bank accounts, instead of charging credit cards like in a consumer to business transaction. Conducting transactions this way gives businesses a great competitive advantage because it is faster, cheaper, and more convenient than traditional business transactions. In summary, a business to business transaction has more of a human interaction element, while a consumer to business transaction is a super-efficient human to computer interaction.
Creating an Online Store
Create an online store to give your brick and mortar store a web presence, or create an online only store. One of the most important elements of an online store is shopping cart software. This is a system to aid you, the business owner, in managing orders and track customers, and allows your customers to easily place orders. A good shopping cart system is familiar to other online shopping carts so that your customers can easily use it. Next, you’ll need a way to accept payments. You will need to be able to accept credit card payments via some sort of gateway/middleman. Paypal is also a great option, especially for small businesses. The final step is to use your creative genius to come up with a niche product that is hard to find from other retailers. Create a marketing strategy for your site. Before investing any money, make sure your plan is commercially viable. For example, Pets.com, a dot-com that failed in the crash of 2000, found out the hard way that shipping dog food is not an easy task. Tell your customers why they need your product, and why you are the best option for obtaining it. Keep it simple, but strong. Remember that you probably won’t be making any significant money overnight and that it could take years to refine your site and marketing strategy to something that works. Do a lot of research and figure out how other e-commerce sites became successful. Its a lot of hard work to create an e-commerce site that makes money, but it is infinitely rewarding to own your very own profitable online store.