Introduction to E-Commerce [Cont]

One can observe from boarder prospective that commerce is just a simple concept. It can be as simple as a person making and selling ice-cream on a street corner or as complex as a microsoft delivering an operating system for computers, all of commerce relies on buyers, sellers and producers. Now let us add to our discussion, E-commerce E-Commerce includes buying and selling of products or services over electronic systems. This electronic system can be Internet or any other computer networks. The quantum of business trade conducted electronically has shown us graph like hockey stick since the spread of the Internet. These days, e-commerce typically uses the World Wide Web at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as well.

You will find that a vast variety of commerce is conducted being conducted in this way. E-Commerce has lead to innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems.

1. History
   Today’s e-commerce what you see is much polished version, which has changed over couple of decades. Initially, electronic commerce was meant for facilitating electronic commercial transactions. This became possible becaouse of technologies like Electronic Data Interchange (EDI), Electronic Funds Transfer (EFT), etc. Aforesaid were introduced few decades before and facilitated businesses to send commercial documents like purchase orders, bills, invoices, acknowledgement, electronically.
   

   
   In 1980’s Industry also observed rapid growth and acceptance in other forms of electronic commerce such as credit cards, automated teller machines (ATM) and telephone banking. Another major stepping stone in revolution of e-commerce industry was the introduction of airline reservation system in USA /UK. Online shopping was first invented in UK in the year 1979 by Michael Aldrich. During 1980s it was used extensively used by auto giants like Ford, Peugeot, General Motors and Nissan. With the start of 1990s electronic commerce started included enterprise resource planning systems (ERP), data mining, data warehousing features etc.. During quondam arena, in the year 1982, Boston Computer Exchange which is one of the finest example for electronic commerce in physical goods. It was a marketplace meant for used computers. American Information Exchange came up as one fo the first online information marketplace that was launched during erstwhile stage of internet system in 1991.Also, IBM in 1997 which launched an e-business marketing campaign directed at selling services to companies that needed to connect their current electronic systems to the web. By 1994 Internet had gained worldwide popularity however it took almost half-decade to introduce security protocols and broadband technologies like DSL which facilitated secure and continual connection to the Internet cloud. And towards end of 2000, ,many European and American business companies started offering their services via World Wide Web. Since then people started having confidence with term called "ecommerce".
   
   This confidence came uo with the ability of purchasing various goods via Internet using secure protocols and easy to use electronic payment services. Success of any business is potential customers, right! Now imagine taskforce of online users, estimated Internet Users is 1,463,632,361 for Q2 2008 (Source: internetworldstats.com/stats.com), wow what whooping number, which are potential e-commerce customers!
   

2. 
   2. How E commerce works? Unless you are living in forest / caves, you would hear and also experienced flavor of internet. Then, famous stuff you already played by now includes email, chat, etc…and also during last decade new hype “e-commerce”, starting ruling famous jargons. But later is not as easy to understand, as compared to former ones! Let explore how this fancy thing works…. To make things simple, let’s start with example, activity is the sale of some product by a seller to a customer: It’s also comprised of number of steps, don’t worry it’s not rocket science. Firstly you must have some product or service you want to offer. The product can be anything from foot-ball to supercomputer. Like any traditional commerce, you can get products directly from a producer, or through a distributor or retailer. It is possible that y you may produce the products yourself! You must also have a place from which to sell your products (similar to shop-keepers which own shop to sell goods). When we need to sell a physical products we know the right place can be a a store or shop of some sort. Further, you need to chalk out a way to get people to come to your place. A simple process of marketing/advertisement needs to be followed to get the required foot fall. This is important as in case no one knows that your place exists, you will never be able to sell your product. Some of advertisement techniques, we have seen hoardings, newspapers/magazines, posters, etc and not to forget “word of mouth” is biggest source to spread info!

   
   
   Then its ‘money’, i.e. you need a way to accept orders. At most of shopping malls, you can use cash, check or credit cards to pay for goods. B2B transactions often use purchase orders. There are some product or service where you don’t pay at the time of delivery, and they are delivered continuously (mobile, water, gas, electricity and pagers are like this); these are charged per cycle / say on monthly basis, which comes under radar of billing and collections. Also, you need to find a way to deliver the product or service. This is often known as fulfillment. Also, sometimes customers may not be satisfied by the bought product , so you need a way to accept returns. Depending on situtation and product you may or may not charge certain fees for returns. Depending on customer or on product you may or may not need to authorirze customer through bills,memership card etc.. before exchanging anything. Sometimes a product breaks and you need to abide by warranty claims. This part of the transaction is mostly handled by the producers themselves. Many products/services in today’s next-generation-world are very complicated.
   

There has to be customer service and technical support departments for helping customers. This is important for building long term relations with the customers. Computers/Laptops/printers/scanners are few good examples. Then, products like mobile phone service may also require regular customer service force, as customers want to switch/add/delete service they receive over time. In the world of e-commerce world, aforementioned elements are there however they change slightly for online transactions. Check out the following list. You need to have these elements for conducting e-commerce.

1. A product/good or service parse
   
2. A place to sell the product – for example Web site/portal to showcase products in some way
   
3. A way to get people to come to your Web site, i.e. its reachable to anyone on Internet
   
4. A mechanism to accept orders – database to track this, customer wise info
   
5. A way to accept money, i.e. online payment methodology
   
6. A facility to ship/transport products to customers
   
7. A way to accept returns (if it happens!)
   
8. A procedure to handle warranty claims (if required)
   
9. A well-being state of customer service process / i.e. after sales support could be through email, online-chats, forms, FAQs series, etc
   
10. Also process/tool, where customer could track delivery/shipment of good ordered
    
    

Whoosh…and you thought selling goods online was is child’s play!

To summarize it further following are some basic requirements to setup an online business.

1. Website: You need to have website through which you are able to put your business on the Internet in electronic form. The website should be professionally built that has innumerable qualities to attract customers.

2. Hosting services: A website needs to be hosted on a professional server from a reliable Internet Service Provider (ISP). It should have a relevant domain name that describes the existence of the portal.

3. E-commerce setup: You need to decide upon e-commerce technologies you will be using. Today, there are wide varieties of merchant and sub-merchant e-commerce technologies available which can be implemented with ease and low cost.

4. Website maintenance: A website needs consistent maintenance. You need to address your customers need for this website should be regularly updated and maintained. A website may require frequent updating of data and information and an occasional upgrade of the software itself. An intelligent portal has utilities for updating of data and information without the interference of a programmer.

5. Presence in Search engine results: As we all know most of the users use Search Engine to visit websites having desired information. As most of the traffic comes from Search engines and search directories you need to take appropriate steps for getting your site listed in all major search engines and search directories.

6. Online marketing: Analogue to traditional marketing you need to invest in online marketing for promoting your product online. Your main aim is to get right traffic on your websites to increase number of transactions on the website.

7. Budget Allocation: You need to have enough budgets for performing important tasks like Publishing, maintaining and marketing an online business.