E-CommerceEssay Preview: E-CommerceReport this essayTable of ContentsI. E-Commerce: An IntroductionII. History of E-CommerceIII. Economic ImpactIV. Advantages of E-CommerceV. Disadvantages of E-CommerceVI. The Future of E-CommerceVII. The ConclusionE-Commerce: An IntroductionWith the astonishing growth of the Internet, many companies are finding new and exciting ways to expand upon their business opportunities. There are very few successful companies that do not use computers in their everyday business activities, which also means there are few companies that do not use E-commerce. To emphasize the point that the effect of the Internet is so widespread in todays business communities, one online article stated that more than 100,000 companies have Internet addresses, and 20,000 companies have Web-sites on the Internet as of February 1999 (DataQuest, 1999). These numbers have more than tripled since 1995, and the trend shows no signs of slowing. But, what exactly is E-commerce? To most casual Internet surfers, E-commerce means online shopping; “for workaholics pointing their web browser to Amazon.com to order an emergency present because they forgot someones birthday again.” (Weiss, 1999) As we will soon find out, this is far from the case.
Simply put, E-commerce is the exchange of business information between two or more organizations. An example of this would be buying and selling products or services over the Internet. E-commerce became very popular soon after it proved to be an efficient means to conduct long distance transactions. The purpose of this report is to discuss some of the advantages and disadvantages of E-commerce, as well as examining its potential for the future of business.
Electronic commerce, or E-commerce has developed very rapidly in the last few years and has left some people wondering what it is all about. “Most people think E-commerce is just about buying and selling things over the Internet.” (Wareham, 2000) E-commerce is a broad term describing the electronic exchange of business data between two or more organizations computers. Some examples might be the electronic filing of your income tax return, on-line services like Prodigy, and on-line billing for services or products received. E-commerce also includes buying and selling any item over the Internet, electronic fund transfer, smart cards, and all other methods of conducting business over digital networks. The primary technological goal of E-commerce is to integrate businesses, government agencies, and contractors into a single community with the ability to communicate with one another across any computer platform.” (Edwards, 1998)
History of E-commerceElectronic commerce was built on a foundation that was started more than 125 years ago with Western Unions money transfer as an example of telegraph technology. In the early 1900s, the advent of credit cards as a payment system revolutionized the process of automated commerce functions. In the mid 1980s, the introduction of the ATM (automated teller machine) card was the latest improvement to electronic commerce. The Internet was conceived in 1969 when the Department of Defense began funding the research of computer networking. The Internet, as a means for commerce, did not become reality until the 1990s. Before this time, it was mainly a tool for the army, and a research device for some American universities. Its popularity grew when it proved to become a fast and efficient means to conduct long distance transactions, as well as an effective way to distribute information.
Economic ImpactClearly, E-commerce will change the face of business forever. Companies that are thousands of miles away can complete business transactions and exchange information in a matter of seconds. As one online article explained:
“Dell Computers sells more than $14 million worth of computer equipment a day from its web-site. By taking their customer service department to the web, Federal Express began saving $10,000 a day. The Internet provides businesses with the opportunity to sell their products to millions of people, 24 hours a day.” (Baxton, 1999)
Figure #1 shows the amount of revenues generated by the on the Internet dating back to 1996 as well as estimating possible revenues through the year 2002. With 1998, revenue equaling almost 74 billion dollars and experts predicting that it will climb to as much as 1,234 billion dollars by the year 2002, anyone can see that E-commerce is the wave of the future.
Figure #1- Internet generated revenues in US dollars. (Source: NUA Internet Surveys)“Without a doubt, the Internet is ushering in an era of sweeping change that will leave no business or industry untouched. In just three years, the Net has gone from a playground for nerds into a vast communications and trading center where some 90 million people swap information or do deals around the world. Imagine: It took radio more than 30 years to reach 60 million people, and television 15 years. Never has a technology caught fire so fast.” (Edwards, 1998)
Advantages of E-commerce* Speed* Reduced Per Transaction Cost* Global Reach* Customer ServiceThe number one advantage that E-commerce possesses is its speed. The Internet and World Wide Web give businesses opportunities to exchange messages or complete transactions almost instantaneously. Even with the slowest connections, doing business electronically is much faster than traditional modes. With increased speeds of communication, the delivery time is reduced and that makes the whole transaction from start to finish more efficiently. In addition, you can find practically any product available for sale on the Internet, as one author put it “from books and compact disks (from www.amazon.com) to French bread (available from www.sourdoughbread.com)” (Buskin, 1998). Even more significant is the fact that information appearing
in a document quickly and easily becomes one of the most important and appreciated features of the Internet and E-commerce transactions. There are more than 5 billion e-commerce transactions every day. At this point in time we are the fastest-growing network. It will always be with us, and many hundreds of thousands will use it every day, but they are all being added in a faster and more efficient way. Our clients are already aware of the increasing speed and speed of our Internet, and they want us to deliver our services faster. As of today we make the biggest investments in our Web, Web.com. Our customers in the U.S. already understand that the Internet has an unlimited speed and that it can reach them fast. Today we put an end to this, using a single company as a testing ground. A strong team dedicated to delivering information to our customers is a step in the right direction, and such a team will also be a good addition to the online ecosystem.”‟″
“With great success has become a big-time industry. For more than 30 years we have been creating digital products. Today all of our services is the basis for a complete e-commerce experience. Our customer service team is one of the smartest ones you will meet in your lives, even in your corporate office.”‵‡″
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‴𔕺 “E-commerce needs are so big, our customer service needs are so high, so we are committed to being able to reach them fast. The fact that we have so few online stores gives us an opportunity to get our sales numbers and create faster Internet sales. And if you want to sell as much online as you can, we have an online store in Seattle that will serve you for years to come.”₣₭″And just this last bit of information gives you an insight for your e-commerce business owners: E-commerce companies will want to make sure their e-commerce product meets your expectations because all online shoppers are always looking for the products they can get to their places at the right time. Our high level of communication with the customer is one of the key factors to make the perfect online shop experience. For example, if you are looking up a product from our online store, you should ask the staff in your e-commerce shop what’s the best in its category. In addition, they should be able to easily identify what you are seeking in the appropriate online category. And while a few store members might be hesitant to say anything, our sales team has also provided us detailed communication with them about their needs. Because of this kind of information, customers have more confidence when they receive a personalized email or message from us. We have been in business four years, and we do believe we have proven that our customers are truly unique and are getting better.We feel that we have taken the most important step in the Internet era by becoming more sophisticated in our e-commerce marketing. By improving our online product, we also enhance the sales channels offered by our customers’ online stores. It’s the only way to go. The best way we are going is to learn how to act. We want to