Hello welcome to this blog post. In this blog I will be writing on e-commerce, meaning of e-commerce, division of e-commerce, factors necessary for the success of e-commerce ventures, types of e-commerce, advantages and Disadvantages of e-commerce.
Meaning Of e-commerce
MEANING: Electronic commerce commonly known as e-commerce or E-commerce is the buying, selling and exchange of goods and services over computer networks (such as the internet) through which transactions or terms of sales are performed electronically. In other words, e-commerce is a type of industry where the buying, selling and distribution of goods and services is conducted over electronic system such as the internet and other computer networks. Electronic commerce is generally considered to be the sale aspect of e-business. It also consists of the exchange of data to facilitate the financing and payment aspects of business transactions. It is an effective and efficient way of communicating within an organization and one of the most effective and useful way of conducting business.
DIVISION OF E-COMMERCE
1. E – Retailer: This refers to the place in the internet where direct retail shopping is done. It ensures a perfect interaction and provision of information to potential customers on how they can place their order for products. It is also referred to as virtual store from websites with online catalogs.
2. E – mail and fax: These are the media for reaching prospective and established customers (for example with newsletters).
3. Electronic data interchange: This is the exchange of data between one business and another. For example, useful information about products and prices can easily be exchange between the buyer and the seller.
4. The use of web: This involves the gathering and use of demographic data through web contacts and social media.
5. Online market places: This simply involves the buying and selling of goods and services online.
FACTORS NECESSARY FOR THE SUCCESS OF E-COMMERCE VENTURES
The following are the factors necessary for a successful e-commerce ventures:
- Add value to customers: Having a solid plan for how you can add value to your customers is the most important success Factor. This will help in selling or buying goods with ease.
- Focus on marketing: It is very important to focus and develop the marketing of your products. Following your site launch, you need to dedicate at least 75% of your time to marketing in order to ensure a wide recognition of your products.
- Ensure specialization: In order to ensure a successful e-commerce, it is very important that you specialize in a certain product or niche. The more that stores specialize products, the most successful they tend to be. Remember (if everyone is your customer, then no one is). Specialization makes it easier to differentiate yourself, charge a premium price and concentrate your marketing effort more effectively.
- Having a long-term commitment: Building a drop shipping business is like building anything else of value. It takes a significant level of commitment and investment every time. If mentally prepare for a challenging beginning and don’t expect to get rich overnight, you will be much more likely to stick with your business until it becomes a success.
- Offer outstanding service: The internet has always been a fairly transparent place, but the recent rise of social media has made your business reputation even more important to your success online. If you don’t treat your customers well, they will often let the entire world know including many potential customers.
- Avoid details: Do not focus too much on the details. Your company name, logo, theme or email marketing services are not going to determine your success. Be brief and go straight to introduce your products for prospective customers.
- Avoid fear and uncertainty: Do not be afraid when going into the commerce business. Do your research, evaluate your options and then move forward with that information in spite of your fear and reservation. It is what entrepreneurs do. Start now.
FORMS OF TYPES OF E-COMMERCE
1. B2B (Business to Business): This is the first types of e-commerce; Companies doing business with each other such as manufacturer selling to distributors and wholesalers selling to retailers. Pricing is based on quantity of order and is often negotiable.
2. B2C (Business to consumer): Another types of E-commerce is B2C. Business selling to the general public typically through catalogs utilizing shopping carts software. By dollar volume, B2B takes the price, however B2C is really what the average Joel has in mind with regards to e-commerce as a whole.
Having a hard time finding a book? Need to purchase a custom high-end computer system? How about a first class, or inclusive trip to a tropical island? With the advent e-commerce, or three things can be purchased literally in minutes without human interaction. Oh How far we have come.
3. C2B (consumer to business): A consumer post his project with a set budget online and within hours companies review the customer’s requirement and bid on the project. The consumer reviews the bid and select the company that will complete the project. Elance empowers consumers around the world by providing the meeting ground and platform for such transactions.
4. C2C (consumer to consumer): There are many sites offering free classifieds, auctions, and forums where individuals can buy and sell. Thanks to online payment system like PayPal where people can send and receive money online with ease. eBay’s auctions options service is a great example of where person to person transaction takes place everyday since 1995.
Companies using internal network to offer their employees product and services online-not necessarily online on the web are engaging in B2E (Business to Employee) eCommerce.
G2G (Government to Government), G2E (Government to Employee) G2B (Government to business) B2G ( Business to Government) G2C (Government to citizen), C2G (citizen to Government) are other forms and types of e-commerce that involve transactions with the government – from procurement filing taxes to business administrations to renewing license.
I have written on functions of commerce in my other article, click here to functions of Commerce
ADVANTAGES OF E-COMMERCE
Below are the advantages of e-commerce:
- Better prices: In e-commerce, customers get better prices. Consumers often get better prices in an online store than they can get in retail stores.
- Customer’s convenience: Another advantages of e-commerce is customer’s convenient: Ordering product online has the advantage over traditional in-store shopping in that it is more convenient; consumers do not have to leave the comfort of their own homes.
- Wider recognition: e-commerce open the market to customers national and international.
- Favorable competition: It also enable smaller companies to compete with larger companies.
- Lower overhead cost: In e-commerce, the cost of doing business is greatly Labour Force.
- Eliminate the use of cash: The use of cash in e-commerce a completely eliminated as all payments are done online.
- Elimination of middleman: The involvement of middlemen such as wholesaler and retailer who might want to increase the prices of goods are completely eliminated.
- Easy communication: e-commerce ensures easy and direct communication between individuals and business partners both locally and internationally.
DISADVANTAGES OF E-COMMERCE
Below are the disadvantages of e-commerce
- Staff reduction: With increased competition in e-commerce, local companies may have to reduce their workforce.
- Stiffer competition: Businesses once competing with the shop in the next town now find themselves competing on a global scale.
- Decrease in investments: The move to e-commerce may not be a smooth one and will certainly require a decrease of investment.
- e-commerce not easily accessible: Majority of the population do not have access to online business. This is a major setbacks on e-commerce.
- Customer concerns: If High Street stores are closed in an effort to save money, customers who refer to shop on the high street may not be comfortable.
- Computer illiteracy: Majority of consumers are computer illiterate. This makes the use of e-commerce very difficult to operate.
- Goods may not meet consumers satisfaction: Goods delivered to consumers may not meet their satisfaction. Since they are unable to inspect the goods before sending them to the consumers