Looking at the hype surrounding the internet, it makes us feel that you probably have already seen or dealt with E-commerce. But for the sake of those of us who haven't, we'll define E-commerce

" E-Commerce is a subset of business, where products and services are advertised, bought and sold over the Internet."

Many businesses have become extremely profitable through online sales. Dell Computers is a prime example. Small companies and even individuals can also market their products or services on a worldwide basis through e-commerce. Large companies can reduce sales and stocking costs by selling online.


Comparison with traditional commerce

Online commerce provides an additional method for buying or selling.

Traditional sales
In traditional sales, the buyer and/or the salesman is the active party. In one case, the buyer initiates the purchase by either going to the store to buy or calling on the phone and making an order. In another situation, the salesman goes to the home or place of business to make the sale, or he calls on the phone to make the sale.

A third method combines action from both parties. The business' sales department mails a catalogue or other material, and the customer then makes a purchase from the catalogue. These methods all apply to business-to-person as well as business-to-business sales.

Online commerce (e-Commerce)
Online commerce adds a new method, similar to a mail order catalogue. The business' sales department posts a Web site with an online catalogue. The buyer then selects items from the online catalogue and makes the purchase, either online or by phoning or mail order.

Although the buyer is really using an online catalogue, the metaphor of browsing a store with a shopping cart of most often used in e-commerce. This allows the customer to put items in the shopping cart to hold until checkout or when the purchase is finally made.


What are the necessities?

Just as in traditional commerce, especially that done by mail order, there are certain elements required to perform online business. You must :

- Website promotion -
You need to advertise and promote your business, so that the customers will either come to your store, read your catalogue or view your Web site.

- Online catalogue or store -
You need to have a store or catalogue where customers can view and select goods or services. Customers need to be able to easily get around your catalogue to find things. The customer should be able to easily browse the selection and mark products for later purchase. They also need to be able to information or see pictures of the items.

Finding items

The Web site should be easy for customers to find what they want. The customer must know what is in the store, and the products must be organized in a logical manner.
The customer must be able to easily search for what he or she wants without the help of a sales clerk.

Selecting what to buy

Once the customer finds what he is looking for, he can put the selection in a "shopping cart" and search for other items. This make it easier for the customer to purchase multiple items, as well as to buy things he may not have been looking for.
Just as in a physical store, people often buy things they just happen to see. For example, stores place some "impulse items" at the checkout stand.

- Purchase -
It should be easy for customers to purchase the items they want. You must have a way to receive online payments, either using credit cards or other means of payment. For example, business-to-business sales may simply involve a purchase order.
The purchase of the item can be complex, but it should be made as simple as possible for the customer.

The customer must give certain information about himself. Usually this is name, address and e-mail

A mutually acceptable payment method must be chosen. Credit card or billing information must be gathered.

The merchant must process the customer's payment information.

Finally, the customer must receive confirmation of the sale.

Security is a concern in credit card purchases and the ability to encrypt transfer of data.

- Delivery -
You must have a good means of fulfilling the order and delivering the material to customers. Different means of delivery depends on the type of item purchased.
The product may be access to special information on the Web site, it may be downloadable software, or it may be items that must be physically delivered to the customer.

- Support -
The customer needs a way to voice problems. You also need a customer service system, consisting of support to handle complaints or returns in the event of problems.