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{{unreferenced|date=July 2006}}
'''Electronic Commerce''' is exactly analogous to a marketplace on the Internet.
'''Elerce'' started in 1994 with the first [[banner ad]] being placed on a website.

According to the October 2006 Forrester Research report entitled, "US eCommerce: Five-Year Forecast And Data Overview, "Nontravel online retail revenues will top the quarter-trillion-dollar mark by 2011. The driver of this growth? A segment of the most active Web shopping households that is roughly 8 million strong. This group of consumers is extremely comfortable with technology and values convenience above all else in the online retail experience. As retailers begin to wade through their copious data warehouses and understand the who, what, when, where, why, and how of this segment, they will benefit from targeting these customers."<ref>http://www.forrester.com/Research/Document/0,7211,40248,00.html</ref>

==Historical development==

The meaning of the term "electronic commerce" has changed over the last 30 years. Originally, "electronic commerce" meant the facilitation of commercial transactions electronically, usually using technology like [[Electronic Data Interchange]] (EDI) and [[Electronic Funds Transfer]] (EFT), where both were introduced in the late 1970s, for example, to send commercial documents like [[purchase order]]s or [[invoice]]s electronically.

The 'electronic' or 'e' in e-commerce refers to the technology/systems; the 'commerce' refers to be traditional business models. E-commerce is the complete set of processes that support commercial/business activities on a network. In the 1970s and 1980s, this would also have involved information analysis. The growth and acceptance of [[credit cards]], [[automated teller machines]] (ATM) and [[telephone banking]] in the 1980s were also forms of e-commerce. However, from the 1990s onwards, this would include [[enterprise resource planning]] systems (ERP), [[data mining]] and [[data warehousing]].

In the [[dot-com bub
Although a large number of "pure e-commerce" companies disappeared during the [[dot-com]] collapse in 2000 and 2001, many "brick-and-mortar" retailers recognized that such companies had identified valuable niche markets and began to add e-commerce capabilit
#Sufficient work done in [[market research]] and analysis. E-commerce is not exempt from good [[business planning]] and the fundamental laws of [[supply and demand]]. Business failure is as much a reality in e-commerce as in any other form of business.
#A good management team armed with information technology strategy. A company's IT strategy should be a part of the business re-design process.
#Providing an easy and secured way for customers to effect transactions. [[Credit card]]s are the most popular means of sending payments on the internet, accounting for 90% of online purchases. In the past, card numbers were transferred securely between the customer and merchant through independent [[payment gateway]]s. Such independent payment gateways are still used by most small and home businesses. Most merchants today process credit card transactions on site through arrangements made with commercial banks or credit cards companies.
#Providing reliability and [[security]]. [[Parallel computing|Parallel server]]s, [[hardware]] [[redundancy (engineering)|redundancy]], [[fail safe|fail-safe]] [[technology]], information [[encryption]], and [[firewall (networking)|firewall]]s can enhance this requirement.
#Providing a 360-degree view of the customer relationship, defined as ensuring that all employees, suppliers, and partners have a complete view, and the same view, of the customer. However, customers may not appreciate the [[authoritarianism|big brother]] experience.
#Constructing a commercially sound [[business model]].
#Engineering an electronic [[value chain]] in which one focuses on a "limited" number of [[core competency|core competencies]] -- the opposite of a one-stop shop. (Electronic stores can appear either specialist or generalist if properly programmed.)
#Operating on or near the [[cutting edge]] of technology and staying there as technology changes (but remembering that the fundamentals of commerce remain indifferent to technology).
#Setting up an organization of sufficient alertness and agility to respond quickly to any changes in the economic, social and physical environment.
#Providing an attractive website. The tasteful use of colour, graphics, animation, photographs, fonts, and white-space percentage may aid success in this respect.
#Streamlining [[business process]]es, possibly through [[reengineering|re-engineering]] and [[information technology|information technologies]].
#Providing complete understanding of the products or services offered, which not only includes complete product information, but also sound advisors and selectors.

Naturally, the e-commerce vendor must also perform such mundane tasks as being truthful about its product and its availability, shipping reliably, and handling complaints promptly and effectively. A unique property of the Internet environment is that individual customers have access to far more information about the seller than they would find in a brick-and-mortar situation. (Of course, customers can, and occasionally do, research a brick-and-mortar store online before visiting it, so this distinction does not hold water in every case.)

===Customer-Oriented===
A successful e-commerce organization must also provide an enjoyable and rewarding experience to its customers. Many factors go into making this possible. Such factors include:

#Providing value to customers. Vendors can achieve this by offering a product or product-line that attracts potential customers at a competitive price, as in non-electronic commerce.
#Providing service and performance. Offering a responsive, user-friendly purchasing experience, just like a flesh-and-blood retailer, may go some way to achieving these goals.
#Providing an incentive for customers to buy and to return. [[Sales promotion]]s to this end can involve coupons, special offers, and [[discounts and allowances|discount]]s. Cross-linked websites and [[affiliate marketing|advertising affiliate program]]s can also help.
#Providing personal attention. Personalized web sites, purchase suggestions, and personalized special offers may go some of the way to substituting for the face-to-face human interaction found at a traditional [[point of sale]].
#Providing a sense of community. [[Chat room]]s, [[Internet forum|discussion boards]], soliciting customer input and [[loyalty program]]s (sometimes called affinity programs) can help in this respect.
#Owning the customer's total experience. E-tailers foster this by treating any contacts with a customer as part of a total experience, an experience that becomes synonymous with the [[brand]].
#Letting customers help themselves. Provision of a self-serve site, easy to use without assistance, can help in this respect. This implies that all [[product information]] is available, cross-sell information, advise for product alternatives, and supplies & accessory selectors.
#Helping customers do their job of [[consumerism|consuming]]. [[E-tailer]]s and [[online shopping directories]] can provide such help through ample comparative information and good [[search engine|search facilities]]. Provision of component information and safety-and-health comments may assist e-tailers to define the customers' job.

==Problems==
Even if a provider of E-commerce goods and services rigorously follows these "key factors" to devise an exemplary e-commerce strategy, problems can still arise. Sources of such problems include:
#Failure to understand customers, why they buy and how they buy. Even a product with a sound value proposition can fail if producers and retailers do not understand customer habits, expectations, and motivations. E-commerce could potentially mitigate this potential problem with proactive and focused marketing research, just as traditional retailers may do.
#Failure to consider the competitive situation. One may have the will to construct a viable book e-tailing [[business model]], but lack the capability to compete with [[Amazon.com]].
#Inability to predict environmental reaction. What will competitors do? Will they introduce competitive brands or competitive web sites? Will they supplement their service offerings? Will they try to sabotage a competitor's site? Will [[price war]]s break out? What will the government do? Research into competitors, industries and markets may mitigate some consequences here, just as in non-electronic commerce.
#Over-estimation of resource competence. Can staff, hardware, software, and processes handle the proposed strategy? Have e-tailers failed to develop employee and management skills? These issues may call for thorough resource planning and employee training.
#Failure to coordinate. If existing reporting and control relationships do not suffice, one can move towards a flat, accountable, and flexible [[organizational structure]], which may or may not aid coordination.
#Failure to obtain senior management commitment. This often results in a failure to gain sufficient corporate resources to accomplish a task. It may help to get top management involved right from the start.
#Failure to obtain employee commitment. If planners do not explain their strategy well to employees, or fail to give employees the whole picture, then training and setting up incentives for workers to embrace the strategy may assist.
#Under-estimation of time requirements. Setting up an e-commerce venture can take considerable time and money, and failure to understand the timing and sequencing of tasks can lead to significant cost overruns. Basic project planning, [[critical path]], [[critical chain]], or [[PERT]] analysis may mitigate such failings. [[Profit]]ability may have to wait for the achievement of [[market share]].
#Failure to follow a plan. Poor follow-through after the initial planning, and insufficient tracking of progress against a plan can result in problems. One may mitigate such problems with standard tools: benchmarking, milestones, variance tracking, and penalties and rewards for variances.
#Becoming the victim of [[organized crime]]. Many syndicates have caught on to the potential of the Internet as a new revenue stream. Two main methods are as follows: (1) Using [[identity theft]] techniques like [[phishing]] to order expensive goods and bill them to some innocent person, then liquidating the goods for quick cash; (2) [[Extortion]] by using a network of compromised "zombie" computers to engage in [[Denial-of-service attack|distributed denial of service attacks]] against the target Web site until it starts paying protection money.
#Failure to expect the unexpected. Too often new businesses do not take into account the amount of time, money or resources needed to complete a project and often find themselves without the necessary components to become successful.

==Product suitability==
Certain products or services appear more suitable for online sales; others remain more suitable for offline sales.

Many successful purely [[virtual shopping|virtual]] companies deal with digital products, (including information storage, retrieval, and modification), music, movies, office supplies, education, communication, software, photography, and financial transactions. Examples of this type of company include: [[Google]], [[eBay]] and [[Paypal]]. Other successful marketers such as use [[Drop shipping]] or [[Affiliate marketing]] techniques to facilitate transactions of tangible goods without maintaining real inventory. Examples include [http://www.amazingrefund.com/ Amazing Refund] and numerous sellers on [[eBay]]<ref>[http://www.webpronews.com/ebusiness/smallbusiness/wpn-2-20050830DropshipYourWayToEbaySuccess.html Dropship Your Way To Ebay Success]</ref>.

Virtual marketers can sell some non-digital products and services successfully. Such products generally have a high value-to-weight ratio, they may involve embarrassing purchases, they may typically go to people in remote locations, and they may have shut-ins as their typical purchasers. Items which can fit through a standard letterbox — such as music CDs, DVDs and books — are particularly suitable for a virtual marketer, and indeed [[Amazon.com]], one of the few enduring [[dot-com]] companies, has historically concentrated on this field.

Products such as spare parts, both for consumer items like washing machines and for industrial equipment like centrifugal pumps, also seem good candidates for selling online. Retailers often need to order spare parts specially, since they typically do not stock them at consumer outlets -- in such cases, e-commerce solutions in spares do not compete with retail stores, only with other ordering systems. A factor for success in this niche can consist of providing customers with exact, reliable information about which part number their particular version of a product needs, for example by providing parts lists keyed by serial number.

Purchases of pornography and of other sex-related products and services fulfill the requirements of both virtuality (or if non-virtual, generally high-value) and potential embarrassment; unsurprisingly, provision of such services has become the most profitable segment of e-commerce. {{Fact|date=January 2007}}

There are also many disadvantages of e-commerce, one of the main ones is fraud. This is where your details (name, bank card number, age, national insurance number) are entered into what look to be a safe site but really it is not. These details can then be used to steal money from you and can be used to buy things on line that you are completely unaware of until it is too late. If this information is leaked into the wrong hands. People are able to steal your identity, and commit more fraud crimes under your name. Finally there are many problems with e commerce some of which are:

Failure to understand customers, why they buy and how they buy. Even a product with a sound value proposition can fail if producers and retailers do not understand customer habits, expectations, and motivations. E-commerce could potentially mitigate this potential problem with proactive and focused marketing research, just as traditional retailers may do.
Failure to consider the competitive situation. One may have the will to construct a viable book e-tailing business model, but lack the capability to compete with Amazon.
Inability to predict environmental reaction. What will competitors do? Will they introduce competitive brands or competitive web sites? Will they supplement their service offerings? Will they try to sabotage a competitor's site? Will price wars break out? What will the government do? Research into competitors, industries and markets may mitigate some consequences here, just as in non-electronic commerce.
Over-estimation of resource competence. Can staff, hardware, software, and processes handle the proposed strategy? Have e-tailer's failed to develop employee and management skills? These issues may call for thorough resource planning and employee training.

Products less suitable for e-commerce include products that have a low value-to-weight ratio, products that have a smell, taste, or touch component, products that need trial fittings — most notably clothing — and products where colour integrity appears important. Nonetheless, [[Tesco|Tesco.com]] has had success delivering groceries in the [[United Kingdom|UK]], albeit that many of its goods are of a generic quality, and clothing sold through the internet is big business in the U.S. Also, the recycling program [[Cheapcycle]] sells goods over the internet, but avoids the low value-to-weight ratio problem by creating different groups for various regions, so that shipping costs remain low.

==Acceptance==
Consumers have accepted the e-commerce business model less readily than its proponents originally expected. Even in product categories suitable for e-commerce, electronic shopping has developed only slowly. Several reasons might account for the slow uptake, including:
* Concerns about [[security]]. Many people will not use [[credit card]]s over the Internet due to concerns about theft and [[credit card fraud]].
* Lack of instant gratification with most e-purchases (non-digital purchases). Much of a consumer's reward for purchasing a product lies in the instant gratification of using and displaying that product. This reward does not exist when one's purchase does not arrive for days or weeks.
* The problem of access to web commerce, mainly for poor households and for developing countries. Low [[diffusion (business)|penetration rates]] of Internet access in some [[sector]]s greatly reduces the potential for e-commerce.
* The social aspect of shopping. Some people enjoy talking to sales staff, to other shoppers, or to their cohorts: this social reward side of [[retail therapy]] does not exist to the same extent in [[online shop]]ping.
* Poorly designed, bug-infested e-Commerce web sites that frustrate online shoppers and drive them away.
* Inconsistent return policies among e-tailers or difficulties in exchange/return.

==Supplier offering services to electronic commerce practitioners==
===Financial===
* [[iBill]]
* [[Moneybookers]]
* [[PayPal]]
* [[WebMoney]]
* [[Yahoo!]]
* [[Google Checkout]]
* [[Paymate]]
* [[PaidByCash]]
* [[eWise]]
* [[VeriSign]]

==Biggest Five Online E-Commerce Sites 2006==
*[[Ebay.com]]
*[[Yahoo.com]]
*[[Amazon.com]]
*[[Google.com]]
*[[Buy.com]]

===Comparison===
[[Comparison of ecommerce solutions]]

==References==
{{reflist}}
* {{cite book
| last = Chaudhury | first = Abijit
| coauthors = Jean-Pierre Kuilboer
| year = 2002
| title = e-Business and e-Commerce Infrastructure
| publisher = McGraw-Hill
| id = ISBN 0-07-247875-6
}}
* [http://www.picdisk.co.uk/articles/ecommerce_article.html Bracken, Ben (2006). The eCommerce Solution Guide — Easy UK eCommerce on a Budget. Retrieved July 30, 2006] (this page had removed)
* [http://www.usatoday.com/tech/news/2003-12-22-shoppers_x.htm Kessler, M. (2003). More shoppers proceed to checkout online. Retrieved January 13, 2004]
* {{cite book
| last = Nissanoff | first = Daniel
| year = 2006
| title = '''FutureShop''': How the New Auction Culture Will Revolutionize the Way We Buy, Sell and Get the Things We Really Want
| publisher = The Penguin Press
| id = ISBN 1-59420-077-7
| edition = Hardcover
| pages = 246 pages
}}
* {{cite book
| last = Seybold | first = Pat
| year = 2001
| title = Customers.com
| publisher = Crown Business Books (Random House)
| id = ISBN 0-609-60772-3
}}

==External links==
*History
**[http://www.economist.com/surveys/PrinterFriendly.cfm?Story_ID=596309 Article from the '[[Economist (magazine)|Economist]]', one of the earliest surveys of Electronic Commerce]

*Future Trends
**[http://simeons.wordpress.com/2006/09/21/e-commerce-20/ E-Commerce 2.0 Article]

*General Information
**[http://www.ecominfocenter.com/ eCommerce Information Center]
**[http://www.cio.com/research/ec/ CIO's Ebusiness Research Center]
**[http://www.electronicmarkets.org/ NetAcademy on Electronic Markets]
**[http://www.textor.com/page_61.html An e-commerce primer (UK oriented)]
**[http://www.scrubsgallery.com/e-commerce An E-Commerce CEO (Blog)]
**[http://digitalenterprise.org/models/models.html "Business Models on the Web"], by Dr. Michael Rappa [http://digitalenterprise.org/mrappa.html], [[North Carolina State University]]
**[http://digitalenterprise.org "Managing the Digital Enterprise"], by Dr. Michael Rappa
**[http://www.dotcomstore.co.uk/ecommerce-checklist.html A checklist of questions to ask at the start of an ecommerce project ]
**[http://www.ecommerceexpo.co.uk UK e-commerce exhibition - London Oct '07]

*Ecommerce News
**[http://ecommerce.internet.com/ Ecommerce Guide]
**[http://www.ec-bp.org/ Ecommerce Best Practices (B2B)]
**[http://www.ecommercetimes.com/ Ecommerce Times]
**[http://nacpec.org North American Consumer Project on Electronic Commerce (NACPEC)]
**[http://icecc.com Institute of Certified E-Commerce Consultants (ICECC)]
**[http://www.enewsline.net eNewsline: eCommerce News for the Airline Industry]
**[http://www.internetretailer.com Internet Retailer]
**[http://www.nexternal.com/nexus E-Commerce Ezine]
**[http://www.trinityinsight.com/perspectives.htm E-Commerce Research Briefs]
**[http://www.ecommercelaw.typepad.com E-Commerce Law Blog]

<!-- Removed External Spam Links -->

== UNDP-APDIP Books ==
{{wikibooks|The Information Age}}
* [http://www.wikibooks.org/wiki/The_Information_Age The Information Age]

This e-primer provides a comprehensive review of the digital and information and communications technology revolutions and how they are changing the economy and society. The primer also addresses the challenges arising from the widening digital divide.

{{wikibooks|E-Commerce and E-Business}}
* [http://en.wikibooks.org/wiki/E-Commerce_and_E-Business E-Commerce and E-Business]

This book recognizes that in the Information Age, Internet commerce is a powerful tool in the economic growth of developing countries. While there are indications of e-commerce patronage among large firms in developing countries, there seems to be little and negligible use of the Internet for commerce among small and medium sized firms. E-commerce promises better business for SMEs and sustainable economic development for developing countries. However, this is premised on strong political will and good governance, as well as on a responsible and supportive private sector within an effective policy framework. This primer seeks to provide policy guidelines toward this end.

Retrieved from [http://en.wikibooks.org/wiki/E-Commerce_and_E-Business/Introduction/ E-Commerce and E-Business-Introduction]

===Wiki legal journal===
* Wiki Legal Comment, [http://wikilegaljournal.wik.is/EBay_v._MercExchange_Note E-commerce After eBay v. MercExchange, When Should the Courts Enjoin Infringement of Internet Business Method Patents?], [http://wikilegaljournal.wik.is Wiki Legal Journal] This article is part of a study to determine if a wiki community can produce high quality legal research, Nov. 18, 2006 (this article suggests a solution for the confusion caused by the Supreme Court's splintered opinion).

[[Category:Electronic commerce]]
[[Category:Information technology]]
[[Category:Marketing]]
[[Category:Information technology management]]
[[Category:Web applications]]
[[Category:Web development]]

[[ar:تجارة إلكترونية]]
[[da:E-handel]]
[[de:Elektronischer Handel]]
[[es:Comercio electrónico]]
[[fa:تجارت الکترونیک]]
[[fr:Commerce électronique]]
[[id:Perdagangan elektronik]]
[[it:Commercio elettronico]]
[[he:מסחר אלקטרוני]]
[[lv:Elektroniskā komercija]]
[[lt:Elektroninė komercija]]
[[nl:Electronic commerce]]
[[ja:電子商取引]]
[[pl:Handel elektroniczny]]
[[pt:Comércio eletrônico]]
[[ro:Comerţ electronic]]
[[ru:Электронная коммерция]]
[[fi:Verkkokauppa]]
[[th:พาณิชย์อิเล็กทรอนิกส์]]
[[vi:Thương mại điện tử]]
[[uk:Електронна комерція]]
[[zh-yue:網上買賣]]
[[zh:电子商务]]

Revision as of 09:34, 30 April 2007

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