Electronic Commerce Chapter 11 – Computers: Understanding Technology, 3 rd edition 1November 17, 2008.

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Presentation transcript:

Electronic Commerce Chapter 11 – Computers: Understanding Technology, 3 rd edition 1November 17, 2008

Electronic Commerce Electronic commerce, or e-commerce, is the buying and selling of products and services electronically over the Internet Some businesses, such as Amazon.com, solely do business over the web whereas many traditional retailers (bricks-and- mortar companies) sell both at their physical locations and over the web 2November 17, 2008

Types of Business to Consumer E- Commerce Online shopping Online services Peer-to-peer transactions 3November 17, 2008

Advantages of Online Shopping to Consumer No travel and can do at any time of the day or day of week More selection More product information available, either through the site or other sites Ease of comparison shopping 4November 17, 2008

Shopping Agents/Bots At the web site of the shopping agent, you enter the name of the product and it returns the price charged by various online stores for that product, complete with links to the exact pages in online stores offering that product Popular ones are BizRate, DealCatcher, MySimon, and Froogle Such tools facilitate comparison shopping 5November 17, 2008

Advantages of Online Purchases to Seller Less employee time per customer or transaction Reduced need for inventory Larger potential customer base (but more competition – national or international market vs. local market) 6November 17, 2008

Online services Online banking – electronic funds transfer reducing use of checks Online loans – consumer and seller both have access to a national market rather than a local one Investing – stock trades, research, portfolio analysis Online travel –travel agencies (Expedia, Travelocity, Orbitz) which are solely online –most airlines now charge extra for paper ticket –Seat assignment and checkin via internet 7November 17, 2008

Peer-to-Peer Online Transactions Online auctions – eBay market value is 43.6B (General Motors 20.5B) (6/25/07) –Peer-to-peer because eBay is neither buyer nor seller –Rating system to build trust in the seller Person-to-Person payment systems – PayPal, Google Checkout – –Seller need not have this credit card processing capability, which is expensive for small sellers due to monthly minimums –Seller need not provide secure web site (https) nor electronic shopping cart; both are provided by PayPal/Google Checout –Buyer supplies financial information (bank account or credit card) to PayPal or Google Checkout and this information is never transmitted to seller (thus buyer is more comfortable dealing with unfamiliar sellers) Digital music distribution – post-Napster 8November 17, 2008