What is E-Commerce?

Electronic Commerce or e-commerce is the exchange of goods and services by means of the Internet or other computer networks. E-commerce follows the same basic principles as traditional commerce—that is, buyers and sellers come together to exchange goods for money. But rather than conducting business in the traditional way—in stores and other “brick and mortar” buildings or through mail order catalogs and telephone operators—in e-commerce buyers and sellers transact business over networked computers.

E-commerce offers buyers convenience. They can visit the World Wide Web sites of multiple vendors 24 hours a day and seven days a week to compare prices and make purchases, without having to leave their homes or offices. In some cases, consumers can immediately obtain a product or service, such as an electronic book, a music file, or computer software, by downloading it over the Internet.

For sellers, e-commerce offers a way to cut costs and expand their markets. They do not need to build, staff, or maintain a store or print and distribute mail order catalogs. Automated order tracking and billing systems cut additional labor costs, and if the product or service can be downloaded, e-commerce firms have no distribution costs. Because they sell over the global Internet, sellers have the potential to market their products or services globally and are not limited by the physical location of a store. Internet technologies also permit sellers to track the interests and preferences of their customers with the customer’s permission and then use this information to build an ongoing relationship with the customer by customizing products and services to meet the customer’s needs.

TYPES OF E-COMMERCE

A variety of businesses are conducted online, including retail businesses that sell products to consumers, service providers that sell services to consumers, auctioneers that create a marketplace for products and services, and business-to-business commerce.

A Product Transactions

Retail Web sites typically include electronic catalogs that describe and display products for sale. Consumers can search for individual items or randomly browse electronic catalogs, some much larger than their mail order print counterparts. Many online retailers allow customers to order products and then track the shipment of their order. Some computer manufacturers also allow consumers to choose different combinations of computer components, selecting the combination that best suits their budget and needs.

B Service Transactions

Other e-commerce businesses offer services. Financial services represent a large segment of e-commerce. For a small fee, online investment brokerages trade stocks on behalf of their clients. Online stock brokerages typically charge customers lower fees than traditional stock brokerages. Other sites provide consumers with a way to research and obtain mortgages and other loans online.

C Auctions

Some e-commerce sites specialize in bringing buyers and sellers together, rather than selling products from their own inventories. Online auctioneers provide sellers a way to list and display items for sale and take bids from interested buyers. An online auctioneer may bring together millions of users and feature more than 700,000 items at any given time. In exchange for the auctioneer’s services, sellers pay the auctioneer a small fixed fee and a portion of the proceeds from the sale. Other sites invert this model. These sites enable bidders to name the price they are willing to pay for a particular product or service and then try to find a seller who is willing to meet that price.

D Business-to-Business Transactions

Business-to-business commerce represents one of the fastest growing segments of e-commerce. Businesses order supplies and coordinate complicated projects electronically. With e-commerce, however, software can automatically track the inventories of manufacturers and suppliers so that both have adequate supplies on hand and no longer need to have excess inventories. Reducing inventories enables both manufacturers and suppliers to lower costs. E-commerce helps trucking and shipping companies match shipments with shippers.

Many people also consider shopping a social experience. For instance, they may enjoy going to a store or a shopping mall with friends or family, an experience that they cannot duplicate online. Consumers also need to be reassured that credit card transactions are secure and that their privacy is respected.

Citar este texto en formato APA: _______. (2013). WEBSCOLAR. What is E-Commerce?. https://www.webscolar.com/what-is-e-commerce. Fecha de consulta: 4 de December de 2023.