What is e-commerce?

By Roman Berezhnoi September 9, 2021 64 views

What is e-commerce?

E-commerce refers to any commerce made over the Internet. Simply put, if you purchase or sell goods on the internet, then you are engaged in E-commerce.

What is e-commerce? In general, an “e-commerce system” is a specific Internet technology that provides system participants with the following features:

  • production and supply of goods and services of various categories

Here the Supplier presents their goods and services on the Internet (including online services and access to information resources), then receive and process the customers’ orders over the Internet.

  • Ability to find goods and services online and make orders  
  • Buyers (clients) – browse through standard Internet browsers the catalogues and price lists of the goods and services offered and draw up orders (requests, requests) for the goods and services of interest via the Internet.

An important (but optional) component of e-commerce systems are electronic payment systems – in this case, the bank becomes one of the participants in the system.

Among the functionalities implemented by e-commerce systems, the following can be highlighted:

  • ordering catalogues and price lists (orders are stored in a single database);
  • the connection of Internet applications with the internal office management system;
  • user self-registration;
  • support for both local and remote (via the Internet) administration;
  • the possibility to sell goods of various categories through the internet;
  • processing orders according to the standard scheme (registration, delivery, financial statements);
  • making online payments.

E-commerce can be divided into 4 categories:

  • B2B (business-to-business);
  • business-to-consumer;
  • business administration (business-to-administration);
  • consumer administration (consumer-to-administration);
  1. An example of a business-to-business category is a company that uses a network for ordering suppliers, receiving bills and paying. This category of e-commerce has been successfully developing for several years, with partial use of electronic data interchange technology – EDI (Electronic Data Interchange) in private networks or networks with additional services – VAN (Value Added Networks).
  2. Business-to-consumer category is e-retail. This category has greatly expanded its scope with the advent of WWW (World Wide Web). Today, the Internet has opened many shops offering consumers all kinds of goods, from cookies and wine to computers and cars.
  3. The category of business administration includes all transactions concluded between companies and government organizations. For example, in the United States, information on planned government purchases is published on the Internet, and companies can send their offers electronically. Today, this category is still in its infancy, but can quickly grow, provided that governments use their own capabilities to support and develop e-commerce. In addition to procurement announcements, administrative authorities may also offer the possibility of electronic exchange during operations such as, for example, the refund of value added tax.
  4. The category of consumer-administration does not exist yet. However, with the proliferation of business-to-consumer and business administration categories of government, electronic interaction can be expanded in areas such as social benefits.

It is generally accepted that the Internet has changed the face of businesses. In just three years, the volume of financial transactions in public networks, according to research by the firm International Data Corp., has skyrocketed from $ 50.4 million in 1997 to the projected $ 1.3 trillion in 2003.

IBM has registered the concept of “electronic business”  as a trademark.

It sounds like this: “e-business the transformation of key business processes using Internet technologies.”

It is understood that all aspects of business relationships, including internal work planning and management, marketing, sales, financial analysis, payments, employee search, customer support and partners, are transferred to the Internet.

It should be noted that the elements of e-business have existed for a long time – many companies have been using automated business management systems for decades, such as, for example, Electronic Data Interchange (EDI ), Electronic Fund Transfer (EFT ), planning Enterprise Resource ( Enterprise Resource Planning, ERP ).

Now that tens of millions of PCs are connected to the Internet, and the Internet has become a business environment, almost any company is able to conduct many online transactions. Thus, companies reduce the costs of an existing business or switch to completely new business schemes.

E-commerce is an integral part of e-business, which provides marketing functions, ordering goods and services, making payments, choosing and implementing a product delivery scheme, and providing after-sales service via the Internet.

The advantages of e-commerce:

  • Expansion of sales markets for suppliers and new choices for buyers.
  • Opportunity for the supplier to work individually with customers;  Opportunity for the customers to personally selected goods and services.
  • Reduction or elimination of the intermediary chain, favouring a fast response.
  • Cutting costs – It not required to have an additional trading room after building an online store.
  • Lower advertising costs, and ultimately – lower prices for buyers.
  • The possibility to track or constantly monitor the order placed.
  • New business opportunities.
  • Opportunity to hire affordable offshore employees to do the job.
  • An E-commerce business does not require having many employees
  • The possibility to run your business alone from the moment you launch your site.
  • The opportunity to collect information from your potential customers through contact forms and build a long lasting relationship with them.
  • A more effective way to analyze demand and prices for products or resources.

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