Electronic commerce or ecommerce is a term for any type of business, or commercial transaction that involves the transfer of information across the Internet (Laudon, 2010). It covers a range of different types of businesses, from consumer based retail sites, through auction or music sites, to business exchanges trading goods and services between corporations. It is currently one of the most important aspects of the Internet to emerge (Network Solutions, 2011). You must have the following elements to conduct e-commerce:
• A product
• A place to sell the product in e-commerce, a website displays the products in some way and acts as the place
• A way to get people to come to your website
• A way to accept orders - normally an on-line form of some sort
• A way to accept money - normally a merchant account handling credit card payments. This piece requires a secure ordering page and a connection to a bank. Or you may use more traditional billing techniques either online or through the mail.
• A fulfillment facility to ship products to customers (often outsourceable). In the case of software and information, however, fulfillment can occur over the web through a file download mechanism.
• A way to accept returns
• A way to handle warranty claims if necessary
• A way to provide customer service (often through email, on-line forms, on-line knowledge bases and FAQs, etc.) (How Stuff Works, 2011).
Ecommerce allows people to create completely new business models. In a mail order company there is a high cost to printing and mailing catalogs that often end up in the trash. There is also a high cost in staffing the order-taking department that answers the phone. In ecommerce, both the catalog distribution cost and the order taking cost fall toward zero. That means that it may be possible to offer products at a lower price or to offer products that could not be offered before because of the change in cost dynamics.
The introduction of ecommerce has impacted on the...