1. Chapter 11
E-Commerce

2. What Is E-Commerce?
E-commerce—the term used to describe performing business transactions online.
E-commerce has been growing at a steady pace.
One estimate predicts that 18% of all purchasing will be performed over the Internet by 2006.
Brick-and-mortar, dot coms, and click-and-mortar stores.

3. Benefits of E-Commerce
To businesses:
Reduced costs.
Increased customer satisfaction.
More effective management tools.
Potentially higher sales.

4. Benefits of E-Commerce, Cont’d.
To customers:
Convenience.
Easier comparison shopping.
Higher degree of selection.
Potential cost savings.

5. Risks of E-Commerce To businesses: Pressure to be “always open.”
Lost business due to customer hesitation to shop online.
Risk of fraudulent credit card transactions.
Ease of entry for competitors.

6. Risk of E-Commerce, Cont’d.
To customers:
Fraud and other potential security problems.
Not being able to feel or touch the goods.
Possible expense to the customer of returning merchandise.

7. Types of E-Commerce Web Sites
Manufacturer and e-tailer Web sites
E-tailers (electronic retailers)
Electronic storefronts

8. Types of E-Commerce Web Sites, Cont’d.
Brokerage sites
Online auctions
Financial brokerages
Market and commodity exchanges

10. E-Commerce Business Models
Business model—describes a company’s policies, operations and technology and how it generates revenue.
Most common e-commerce business models:
Business to consumer (B2C)
Business to business (B2B)
Consumer to consumer (C2C)
Business to government (B2G)
Intermediary hubs

11. Implementing Web-Based E-Commerce
Five basic steps:
Step 1: Select appropriate business models and types of Web sites.
Step 2: Select desired e-commerce applications.

12. Implementing Web-Based E-Commerce, Cont’d.
Step 3: Develop procedures for handling electronic financial transactions.
Credit and debit card processing
Electronic checks
Online payment accounts
Electronic gift certificates, gift cards, and coupons
Smart cards
Digital wallets

15. Implementing Web-Based E-Commerce, Cont’d.
Special considerations for B2B financial transactions.
Using a B2B transaction processing company (payment processing, credit checking, escrow services, etc.).
Using an order-fulfillment company (order management, shipping, inventory, returns processing, marketing tools, etc.).

16. Implementing Web-Based E-Commerce, Cont’d.
Step 4: Design and develop an effective Web site.
Storefront software (either packaged or Web- based)
Shopping cart software

18. Implementing Web-Based E-Commerce, Cont’d.
Step 5: Implement appropriate sales and marketing strategies.
Include adequate customer service features.
Collect taxes from customers only if required by law.
Display a privacy policy and security statement.
Use an appropriate domain name and URL.
Promote your Web site sufficiently (promote URL, use meta tags, etc.).
Data warehousing and mining.

20. Security Issues Secure financial transactions.
Secure sensitive documents and files.
Authenticate online business partners.

21. Summary What is e-commerce? Types of e-commerce Web sites
E-commerce business models
Implementing Web-based e-commerce
Security issues