E-commerceDEFINITION, TYPES ADVANTAGES AND DISADVANTAGES.

By:Dheeraj Srinath

E-COMMERCE

Trading in products or services using computer networks, such as the Internet.

Uses technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems

E-commerce Features

• Global Reach

• Richness

• Interactivity

• Information Density

Types of e-commerce

The classification of ecommerce is based on: • who orders the goods and services to be

sold, • who sold those goods and services and the

nature of transactions.

Classification of e-commerce

• Business-to-Business (B2B) e commerce • Business-to-Consumer (B2C) e commerce • Consumer-to-Business (C2B) e commerce

• Priceline, elance • Consumer-to-Consumer (C2C) e commerce • Peer-to-Peer (P2P) e commerce

• Craigslist• M-commerce

1. Business-to-Business (B2B) e-commerce

• The companies include in the B2B ecommerce are manufacturers, wholesalers rather than retailers only.

• High customer competence• Often relationship-driven (little search)• Mostly commodities and standardized goods• Pricing is based on quantity of orders and is

often negotiable.

2.Business-to-Consumer (B2C)e-commerce

• In this e-commerce type, business and consumers are involved.

• Business sell to the public typically through catalogs utilizing shopping cart software

• Highly search-driven (relationships hard to come by)• Customer competence varies widely• Many non-standardized goods sold here• Depends on attractive electronic market places to

entice and sell products and services to the consumer

3. Consumer-to-Business (C2B) e-commerce

• Also called demand collection model.• It enables buyers to name their own price, often

binding, for a specific good or services generating demand

• A consumer posts his project with a set budget online and often within hours companies review the customers’ requirements and bid for the project.

• Then the customer will review the bids and selects the company that will complete the project.

4. Consumer-to-Consumer (C2C) e-commerce

• It facilitates the online transaction of goods or services between two peoples.

• However, there is no visible intermediary involved, but the parties cannot carry out the transactions without the platform, which is provided by the online market such as eBay.

Examples:• Advertisement of personal services over the internet.• Selling of knowledge and expertise online.

5. Peer-to-Peer (P2P) e-commerce

• Like C2C but without the platform commercially involved.

• May need software for communication on the common platform.

Examples:

Craigslist, Napster, Mininova

Advantages of E-commerce

• Faster buying/selling procedure, as well as easy to find products.

• Buying/selling 24/7. • Low operational costs and better

quality of services. • Easy to start and manage a business. • No need of physical company set-ups.• Customers can easily select products

from different providers without moving around physically.

Disadvantages of E-commerce

• Any one, good or bad, can easily start a business. And there are many bad sites which eat up customers’ money.

• There is no guarantee of product quality.

• Mechanical failures can cause unpredictable effects on the total processes.

• As there is minimum chance of direct customer to company interactions, customer loyalty is always on a check.

• There are many hackers who look for opportunities, and thus an ecommerce site, service, payment gateways, all are always prone to attack.