(electronic commerce or EC)
E-commerce is defined as “the buying and selling of goods and services, or the transmitting of funds or data, over an electronic network, primarily the internet. “
The transactions are done either as a business-to-business, business-to-consumer, consumer-to-consumer or consumer-to-business.
The following terms:
Can often be interchangeable.
· e-tail - Is sometimes used for transactional processes for online shopping.
History of e-commerce
The initial stages of e-commerce began in the 1960s when businesses started using Electronic Data Interchange (EDI) to share documents with other companies. The American National Standards Institute developed ASC X12 iIn 1979, as the universal standard to share documents through an electronic network.
As the number of users grew in the 1980s, in the 1990s the sharing of electronic documents with each other, gave rise of eBay and Amazon.
Consumers can now purchase pretty much anything online.
Video from TechNerd
E-commerce can be done using a variety of applications, emails, online catalogs, shopping carts, File Transfer Protocol (FTP,) and web services.
It would include business-to-business activities such as using email for unsolicited ads (usually viewed as spam) to potential consumers and solicitation of other businesses.
And to send out e-newsletters and e-zines to subscribers.
Many companies try to entice consumers directly online, using digital coupons, social media marketing, and targeted advertisements.
The benefits of e-commerce:
· Around-The-Clock availability,
· The speed of access,
· The wide availability of goods and services for the consumer,
· easy accessibility
· International reach.
The downsides include:
· limited customer service
· not being able to see or touch a product before purchase
(pictures do lie)
· the wait time for product shipping
Government regulations for e-commerce
In the United States, the Federal Trade Commission (FTC) and the Payment Card Industry (PCI) Security Standards Council are among the primary agencies that regulate e-commerce activities. The FTC monitors activities such as online advertising, content marketing, and customer privacy, while the PCI Council develops standards and rules including PCI-DSS compliance that outlines procedures for proper handling and storage of consumers' financial data.
5 E-Commerce Security Tips
With each new e-commerce, innovation released, consumers, face a fresh security risk.
E-commerce is not just increasing; it's evolving.
New software, new methods, more sites from which to choose to make purchases.
The exponential rate of e-commerce growth has far surpassed mainstream security measures set in place to regulate online commerce and prevent consumer identity fraud properly.
The consumer is faced daily, by a labyrinth of different online opportunities, choices, and decisions.
Selling anything and everything without a good profit margin is going to be successful. As a small online merchant, you need to focus on products that have higher margins — items that cater to a group of people who would be likely to purchase a wonderfully crafted product.
None of which were available or even conceived of 25 years ago.
E-commerce is gaining popularity and acceptance; previously risky online activity such as banking has become common place and is considered safe and reliable.
Stringent management of fraud is good in concept. The fraud comes in several different ways:
· Unauthorized use of Credit/Debit cards
· Chargebacks especially after getting a digital product
But can also be more damaging to revenue growth and profitability.
Every quarter, your company should measure the fraud rate.
But in many cases, getting to the lowest fraud point has meant rejecting valid orders from the tightening of the process and increases the rate of manual reviews.
Which, in turn, increases the cost of sales. There is a tendency to hike prices to make up the difference.
You are dealing with a two-edged sword at this point.
Your profits may level out or even rise, for a time.
Then you will likely experience a sales decrease as your customers decide your prices are higher than they should be.
More than they want to pay when they can get the same or nearly the same product somewhere else at a lower price, and start leaving.
As everyone knows, it does not take much to do a search to find the product somewhere else.
The best-practice approach to fraud management is to view the issue not as addressing fraud loss. As so many do.
But rather as focusing on profit loss.
Meaning, to maximize acceptance of valid orders, and hence maximize profit. It is a given that you will experience fraud and loss. If you handle it wrong, you may not have a business for long.
Popular methods used to access sensitive information online present serious security concerns. Your company website may get hacked, and your customer database was stolen.
Consumers are too easily accepting the terms and conditions, without a second thought, in many cases compromising online anonymity and privacy.
Steps for an Online Store
- Marketing. The Internet companies offer many avenues to promote their products.
The companies will develop a website to build and promote their brand.
To display a complete inventory of products, provide product literature, or even send out online press releases.
Companies may also advertise online and either direct interested buyers to an authorized dealer or sell the product themselves.
- Sales. Floor space does not bind online stores; they may offer a larger variety of products than possible from a physical storefront.
- Distribution. Publishers of books, physical or e-books, software, music, movies, and photos can distribute their products electronically, instead of having to store and ship a physical product.
For physical products that require shipping, e-commerce offers supply chain management solutions, automated inventory management systems, and online tracking of shipped products.
- Financial Transactions. The ATMs is an example of an early e-commerce application.
Customers can deposit and withdraw or transfer their funds.
Other e-commerce applications that impact most businesses include electronic funds transfer and electronic credit card payment processing.
- Service and Support. Companies may also provide product service and support online.
Although there are many sites that do not have a customer support service or a bare minimum of support.
At a basic level, companies can publish electronic editions of their product manuals on their company website.
They can also archive common support issues and solutions on their website, as well as provide a forum for their users to troubleshoot problems.
Some companies even provide a free online chat application for customers to contact sales or support personnel.
Visit my FAN page on FaceBook