Chapter 10 ECommerce: A Revolution in the Way We Do Business

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Chapter 10E-Commerce A Revolution in the Way
We Do Business
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What is E-Commerce

• What is electronic commerce (e-commerce)?

• A financial business transaction that occurs over
  an electronic network
• Sometimes called e-business
• Anyone with access to a computer, an Internet
  connection, and a means to pay for purchased
  goods or services can participate in e-commerce

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What is E-Commerce

• How has e-commerce grown?

• Forrester Research, a leading independent
  research firm, estimates that by 2004 worldwide
  e-commerce will exceed 6.7 trillion

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E-Commerce Business Models

• What is business-to-consumer (B-to-C or B2C)
  e-commerce?

• Consists of the sale of products or services from
  a business to the general public or end user
• The seller is the business
• The buyer is the consumer (public)
• Products can be physical objects or intangible
  items such as software or services

Click to view Web Link then click
Business-to-Consumer E-Commerce
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E-Commerce Business Models

• What is consumer-to-consumer (C-to-C or C2C)
  e-commerce?

• Consists of individuals using the Internet to
  sell products and services directly to other
  individuals
• An online auction is similar to negotiating, in
  which one consumer auctions goods to other
  consumers
• eBay is a popular online auction

Click to view video
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E-Commerce Business Models

• What is peer-to-peer (P2P) e-commerce?

• A form of e-commerce that enables users with the
  same networking software to connect to each
  others hard disks and exchange files directly
• A consumer can pay another consumer to copy a
  file

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Company on the Cutting Edge

• Worlds largest online trading community

Click to view Web Link then click eBay
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E-Commerce Business Models

• What is business-to-business (B-to-B or B2B)
  e-commerce?

• The sale and exchange of products and service
  between businesses
• The major type of e-commerce interaction
• Many businesses engage in both B2B and B2C

Click to view Web Link then click
Business-to-BusinessE-Commerce
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E-Commerce Business Models

• What are some advantages of e-commerce?

• Global market 24 hours per day
• Businesses have access to 360 million people with
  Internet access
• Customers can conduct price comparisons easily
• Feedback can be immediate
• Changing information can be available quickly
• FAQ (frequently asked questions) pages can
  provide easy access to customer support
• Ability to gather customer information, analyze
  it, and react
• New and traditional approaches to generating
  revenue
• Manufacturers can buy and sell directly, avoiding
  the cost of the middleman
• Distribution costs for information reduced or
  eliminated
• Options to create a paperless environment

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E-Commerce Revenue Streams

• What is electronic software distribution (ESD)?

• Sale of digital products such as software, music,
  movies, books, and photographs
• A purchase entitles you to download one copy of
  an item

Click to view Web Link then click
ElectronicSoftwareDistribution
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E-Commerce Revenue Streams

• What is advertisement revenue?

• Some Web sites contain advertisements
• Sites earn commissions from the advertising
  sponsors when visitors make purchases as a result
  of clicking the advertisement

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E-Commerce Revenue Streams

• How is revenue generated with an informational
  Web site?

• Visitors are required to subscribe to a service
• Usually provide some information at no cost, but
  require a subscription to access the content of
  the entire site

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E-Commerce Revenue Streams

• What is an online storage service?

• Provides data storage to computer users
• Often used to store backup copies of data and
  information

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E-Commerce Revenue Streams

• How is revenue generated with Internet access?

• Some sites provide Internet access
• Many have become portals offering many other
  services

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Company on the Cutting Edge

• Founded by Jeff Bezos in 1995
• Originally a book store
• Now expanded to sell a variety of products
• Has become the Internet's top retailer with more
  than 600 million in annual sales

Click to view Web Link then click Amazon
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Other E-Commerce Market Sectors on the Web

• What is online banking?

• Allows you to pay bills from your computer
• Transfer money electronically from your account
  to a payees account
• Download monthly banking transactions

Click to view Web Link then click Online Banking
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Other E-Commerce Market Sectors on the Web

• What is online trading?

• You can invest in stocks, options, bonds,
  treasuries, CDs, money markets, annuities, and
  mutual funds without using a broker
• Transaction fee usually less than when trading
  through a broker

Click to view Web Link then click Online Trading
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Other E-Commerce Market Sectors on the Web

• What entertainment and media are available on the
  Web?

• Music, videos, news, sporting events, and 3-D
  multiplayer games
• News and live radio broadcasting
• Streaming audio

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Other E-Commerce Market Sectors on the Web

• What travel services are available on the Web?

• Driving directions and maps
• Airline, hotel, and car reservations

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Other E-Commerce Market Sectors on the Web

• What is a shopping bot?

• A Web site that searches the Internet for the
  best price on a product or service in which you
  are interested
• Also called a shopbot

Click to view Web Link then click Shopping Bots
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Creating an Online Store

• What is a Web host?

• An outside company that provides the hardware,
  software, and communications required for a Web
  server
• Charges a monthly fee or a percentage of the
  sales income
• Web server also called an e-commerce server or
  commerce server

Click to view Web Link then clickWeb Hosts
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Creating an Online Store

• What is a secure server?

• Prevents access to the system by unauthorized
  users
• Often used for transaction services where credit
  card information is entered

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Creating an Online Store

• What is a Web site development service?

• Assists in the process of creating a storefront
• Allows small businesses and individuals to
  participate in the e-commerce arena with a
  minimum investment

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Creating an Online Store

• What factors lead to customer loyalty?

• Successful sites attract customers and keep them
  returning to the site
• Te best storefronts plan for convenience, are
  efficient, and easy to use
• Customers who must wait more than eight seconds
  for a page to download usually will click to
  another site

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Creating an Online Store

• What is a submission service?

• A Web-based business in which you typically pay a
  fee to register with hundreds of search engines

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Creating an Online Store

• What is online advertising?

• Often called banner ads
• Advertisements are linked to the advertiser's Web
  site
• Advertiser usually pays based on the number of
  click-throughs
• Occurs when a visitor clicks an advertisement to
  move to the advertisers Web page

banner ad
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Creating an Online Store

• What is spam?

• Unsolicited e-mail messages or newsgroup postings
• Internet junk mail
• Usually generates antagonism instead of sales

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