E-Commerce is an abbreviation for Electronic Commerce. The term basically means using systems that enable you to trade services or products electronically. This is accomplished by using computer networks like the Internet. There are multiple types of technology involved in E-Commerce, including but not limited to systems for data collection, electronic data exchange, mobile commerce, supply chain management, inventory management, internet marketing, or online transactions.
Just as everything else in life, E-Commerce has many advantages and some drawbacks. One of the biggest advantages is the fact that electronic commerce saves tremendous amounts of time as it allows people to complete actions on the Internet that otherwise would need to be done outside of their homes and frequently would involve significant waiting and travel. For example, if you live in the US and are attracted to a nice looking antique in South Africa that is for sale on the Internet, all you need to do is simply enter your name, address and payment method and your purchased item will arrive in your home in a matter of days. You don’t have to travel all the way to South Africa, spend money on an airplane ticket, hotels and meals. That would make the purchase quite expensive, wouldn’t it? Instead, you can browse a large variety of antiques sold in South Africa that have been displayed on a website on the Internet, and complete your purchase within minutes.
Among the most frequently mentioned drawbacks of E-Commerce that people have shared with us is the overall lack of personal contact between buyer and seller, creating issues with trust when people are asked to give sensitive information such as their names, addresses, phone numbers and other personal facts, in addition to having to separate themselves with their money over products that they cannot personally inspect closely. There are still many people out there that absolutely refuse to shop on the Internet or do any other online activities, fearing potential identity theft problems or having their information sold to solicitors. These are very valid concerns that unfortunately prove the old saying that nothing is ever perfect. You need to weigh the pros versus the cons and make your own educated decision.
Tools Used By E-Commerce Businesses
There are many practices that help E-Commerce companies run their businesses. We will discuss most of them in a greater detail, but for now, we will just mention some of them so our readers can have an idea about constitutes E-Commerce.
- Business-to- business (also known as B2B) selling and buying refers to transactions from one business to another. The example that most often comes to mind is an exchange between a manufacturer and a wholesaler and then between that wholesaler and a retailer. Or a marketing online business performing online marketing for a local dentist.
- Business-to customer (also known as B2C) is pretty self explanatory. These transactions happen less often than the B2B transactions on a daily basis.
- Online retail, called eTail. It means the possibility to buy physical goods on the Internet, via structures known as marketplaces. It was called electronic retail at first, then E-Retail, but then gradually more and more users were dropping the “R” and thus the term eTail is used today, which can be quite confusing to someone who is unfamiliar with the growing online jargon. Virtual marketplaces or virtual storefronts are other names used instead of eTail. Such systems basically build large online catalogues that help consumers browse from a wider variety of goods that they would be able to find in any local store.
- Online marketplaces are platforms that contain products sold by multiple third parities yet the transactions are managed by one marketplace operator. Amazon and eBay are examples. You have probably shopped at least once on Amazon and have noticed how for each type of product there are multiple vendors, yet your money transitions are handled by Amazon.
- E-Commerce businesses gather plenty of demographic information by using social media and various websites. The reason why they do this is mainly for market research. They want to offer their customers better fitted products or services based on each customer’s needs as perceived by the type of product or service that they requested. Marketing research is at the core of every business’ survival in today’s day and age of massive competition and life-transforming technology.
- E-Commerce businesses usually provide secure business transactions by using systems that protect customer data such as credit card numbers from getting into the hands of ill-intended people.
- Shopping carts are the virtual equivalents of the carts you use at the grocery store to gather the products you need and then pay for them together at the cashier instead of paying for each of them separately. which would surely create very long lines of inpatient and very unhappy customers.
- Email marketing is used to advertise new products or services that would improve a person’s life in some way. Email marketing, when done correctly, targets very specific segments of the population to sell very specific products or services that would benefit that particular population segment. If the market research has not been done well enough to target a specific kind of customer that currently uses and will likely continue to use the specific goods that are offered, then the email marketing campaign will not be too successful.
- Merchant accounts are online tools to process monetary transactions by E-Commerce businesses when customers buy something. PayPal is an example of a platform that offers several types of merchant accounts to anyone who desires to conduct a business online.
We hope that with the brief descriptions of several of the hundred components that define E-Commerce, you can find some familiar examples that will help you realize that E-Commerce has pretty much become a daily routine and a permanent part of life if you reside in a place that has access to the World Wide Web, also known as the Internet.