Understanding e-commerce
- 13 November 2007
- Page 1 of 3 : single page
ECommerce really refers to electronnic business-to-business transactions. ECommerce is concerned with the Internet doing business faster and better than before. It's about giving customers access to a system that lets people serve themselves and make their own choices. It's about allowing a company to go on line and communicate with other businesses very much without human involvement.
ECommerce - a definition
A simple definition of ECommerce is the -
"Conduct of business involving the sale and purchase of products and services through the use of technology by way of the medium of the Internet".
ECommerce is not about the technology itself but about doing business using that technology. Because ECommerce simply means commerce by electronic means, it has been in existence for many years. ECommerce can incorporate such things as the use of electronic fax, e-mail, smart cards etc.
Why use ECommerce?
It is no longer just a simple matter of whether you use ECommerce, but when it is going to be incorporated into your business operations and planning. ECommerce nowadays is really in reference to sales and purchases via the Internet. Selling on the web is no longer a feature that is confined to a few of the larger companies with money, as any business can now set up a website and start dealing using the Internet. If you are not offering your products or services online today, then you may be at a huge disadvantage competitively tomorrow. Most business customers today expect their suppliers to have a website and to make available their goods and services through the web where those products call for it.
In days gone by conducting business via ECommerce methods was complex and costly. Today, however, there has been a proliferation of turnkey type options which enable a business to set up a website and incorporate features that enable business to be transacted immediately where necessary.
The future and the Internet
The advent and growth of the Internet has given businesses access to information and resources that have never been easily obtainable at a reasonable cost in the past. Things have changed so dramatically that now it is possible to access within minute's products and services, as well as penetration into markets globally. ECommerce is obviously the area that will have the largest growth in the way that business is done over the next decade.
For a business to compete and to operate profitably, consideration of becoming part of the ECommerce community is a must. It is really not just a matter of taking advantage of it, but it has now become a necessity to be in the industry if you like, otherwise the business will be left behind. There is no reason in the world why any business cannot compete more effectively now with other businesses of any size through ECommerce.
The Internet has provided the means whereby a small business can be on the level playing field in comparison to a large organisation, because the website of the business, if well designed and well structured, can make a small business look large. The business website becomes the catalogue of the products and capabilities of the organisation and this opens up a whole new advantage to the small business.
Planning your ECommerce
There is no doubt that businesses today are beginning to find new ways to expand their operations. Everyone has a web site these days and it's almost come to a situation where if you don't have a web site you're not going anywhere. However, setting up a web site is not as simple as it seems if it is to function in the way that a web site should.
New websites lack direction or functionality. The simple answer is that you need to do some planning if you are looking at moving into the world of ECommerce.
Some of the questions that need to be answered if you are planning your ECommerce operations are:
- Is your business ready for a website?
- What is the cost of a website?
- What's required in set up and design?
- How will you market?
- Will you need a merchant account?
- Do you need on line clearing?
- Is your accounting and financial systems in order?
Is your business ready for a website?
Most businesses think that unless they have a website they are not getting anywhere. There are also the old pressures that come from competitors who all appear to be moving ahead and using the Internet to take a bigger share of the market. You need to think clearly about what you are wanting to accomplish by establishing a website for your business. Once this is clearly answered in your mind you will be able to have a clearer indication of the options you should follow.
There are generally four main reasons why people establish websites.
- To get a presence on the Internet and keep up with the "Jones's"
- For marketing purposes - because the Internet is a global medium for potential sales every business believes that if they can get on to the Internet they will automatically generate huge increases in turnover just by having a website up. In reality of course, this is not the case, but nevertheless, marketing is a strong consideration.
- Customer support - by getting on the Internet, customers can be contacted by e-mail or can e-mail queries back. Many businesses have found that the Internet is a great resource to offer customers specials and enable them to view product specifications and even furnish online answers to their queries. If this is something that is important to your business then a website is a definite option.
- Sales - the whole idea of being on the Internet of course is to increase sales and therefore increase profits. At the end of the day the bottom line is the motivating force that pushes businesses to have a web presence even if they don't fully understand the medium. Most sites go beyond general marketing and actually look to generate an order online often without any involvement of their staff in a physical sense. The simplest way this can be done may include instructions to print out a page or order and complete before faxing to the business. The more advanced sites allow the option of purchasing online and then paying by the use of credit cards so that the whole process is done in real time and both the customer and the firm get benefits.
Cost of websites
Setting up and organising a website is not cheap. If you are looking for a website that introduces and promotes your business to the maximum effect you will need to set aside sufficient funds to do it properly. There are many computer packages that enable you to design your own website that are available in the market. If you are happy with that level of presentation of your business then go for it.
However, if you want to move to the next level where your website is an advertisement for your services as well as your style and standard then you may have put together a budget to have the website developed and designed by professionals. There are also costs involved and other questions such as whether you have your own server, or whether you are going to accept orders on line, etc.
