Chapter 10 Electronic Commerce

E-commerce is the buying and selling of products and services electronically over the Internet.

Business-to-Consumer Electronic Commerce In business-to-consumer electronic commerce (B2C) transactions, companies use the Internet to sell products and services to consumers and to receive payments.

Business-to-Business Electronic Commerce (B2B) Business-to-business electronic commerce (B2B) companies use the Internet to conduct routine business activities with other companies, including ordering manufacturing parts and purchasing inventories from wholesalers.

Venues of E-Commerce The Web provides numerous business- to-consumer electronic commerce venues, which are types of Web sites where e-commerce transactions occur. Users can move from venue to venue on the Internet to search for, find, purchase, and pay for products and services.

Online Shopping Also called electronic shopping or e-shopping, online shopping is using a computer, modem, browser, and the Internet to locate, examine, purchase, sell, and pay for products.

Advantages of Online Shopping Online shopping offers several distinct advantages over traditional shopping methods. ConvenienceGreater Selection Increased Product Information Ease of Comparison Shopping.

Online Shopping Venues Consumers can visit a number of online shopping venues, including online stores, online superstores, and online shopping malls.

Online Store An online store, also called a virtual store, is a seller’s Web site where customers can view, purchase, and pay for products and services.

Online Superstore An online superstore offers a greater variety of products and contains departments that house similar kinds of products in one area.

Online Shopping Mall An online shopping mall connects its stores by hyperlinks on the mall’s home page.

Guidelines for Shopping Online In evaluating online shopping sites, a shopper should look for features such as: Excellent customer service Clearly stated selling and security terms Satisfactory product information Ease of making purchases

Assistance for E-Commerce Some helps for online shoppers include online catalogs and shopping agents, or bots.

Online Services The Web now offers numerous types of online services. Some are free, but most require the user to subscribe and pay a fee. Health-related Information Services Home-buying Services Car-buying Services Entertainment Fashion Financial Services (banking and investing) Travel Services

Peer-To-Peer Online Transactions Peer-to-peer business-to-consumer transactions are those that take place between individuals, usually at a common forum-type Web site sponsored by a business. Web Site BuyerSeller

Online Auctions A popular peer-to-peer transaction activity is online auctions, sites such as eBay or uBid where individuals can sell, bid on, or purchase items from other individuals around the world.

Digital Music Distribution An early and popular type of peer-to-peer transaction was digital music distribution. Due to copyright infringement issues, this activity has evolved to a fee- based service through such companies as Apple Computer. User Uploads MusicUser Downloads Music

Transaction Payment Methods Electronic funds transfer (EFT) is a general term that refers to any transfer of money over the Internet.

Current Transaction Methods Some current transaction methods include check or credit card by phone, credit accounts, credit cards, smart cards, digital cash, electronic wallets, micro payments, and electronic (digital) signatures.

Transaction Security and Encryption Many shopping sites protect online transactions by encrypting information transmitted over the Internet.

Encryption Encryption is the process of converting readable information, called plaintext, into unreadable information, called ciphertext, to prevent unauthorized access and usage.

Establishing an E-tailer Web Site Some important considerations include: Hardware and software needs Methods for processing payments Attractive and effective site design Managing the site Advertising and promoting the site.

Business-to-Business Electronic Commerce In B2B electronic commerce, businesses use computers, networks, the Internet, and e-commerce technologies to conduct a variety of routine business activities with other companies.

Business-to-Business Electronic Commerce Transaction In a business-to-business electronic commerce transaction, both the seller and buyer are business organizations.

B2B E-Commerce With B2B e-commerce companies can: Order Supplies Enhance collaboration among employees Improve customer response time Share information Coordinate operations

B2B E-Commerce Order supplies

B2B E-Commerce Enhance collaboration among employees

B2B E-Commerce Improve customer response time

B2B E-Commerce Process financial transactions.

B2B E-Commerce Conduct numerous other business activities Coordinate operations Speed up product development

On the Horizon Enhanced Web Phone Technology New technologies will allow users to perform all types of Internet activities on their cell phones or other handheld devices. In the future, a single chip embedded in a cell phone’s SIM (subscriber information module) will be all users will need to identify themselves, replacing credit cards, identity cards, PIN numbers, and even passports. Improved Capacity and Security in Web Servers Advances in Internet and Web server capabilities will allow these technologies to handle many more online users concurrently. Additionally, servers will provide greater security, including improved firewall, virus, and hacker protection.

On the Horizon Machine-To-Machine (M2M) Applications Businesses in the future will use machine-to-machine e-commerce, or M2M, to automate many routine business transactions. Online Research and Development Companies will speed up research and development by tapping into the power of the Internet to solicit consumer feedback online, an important aspect in measuring consumer interest in new products. Expanded Use of Radio-Frequency Identification (RFID) Technology Wal-Mart and other companies plan to implement RFID to track shipments through the supply chain. RFID uses an antenna and chip containing an electronic product code, which is embedded in a shipping pallet or cargo container. Electronic readers activate the chip, which then sends or receives information. Container break-ins can be recorded.