ELECTRONIC COMMERCE
(http://www.ecommerce-land.com/history_ecommerce.html)
History of E-commerce :
E-commerce became possible in 1991 when the Internet was opened to commercial use. Since that date thousands of businesses have taken up residence at websites. The ability to use these technologies appeared in the late 1970s & allowed business companies & organizations to send commercial documentation electronically. In 2000 a great number of business companies in the United States & Western Europe represented their services in the World Wide Web. People began to define the term e-commerce as the process of purchasing of available goods & services over the internet using secure connections & electronic payment services. By the end of 2001, the largest form of e-commerce, Business-to-Business (B2B) model, had around $700 billion in transactions.
Online vendors, in their turn, also get distinct advantages. The web and its search engines provide a way to be found by customers without expensive advertising campaign. Even small online shops can reach global markets. Web technology also allows to track customer preferences & to deliver individually-tailored marketing.
History of e-commerce is unthinkable without Amazon & Ebay which were among the first Internet companies to allow electronic transactions. Thanks to their founders we now have a handsome e-commerce sector and enjoy the buying & selling advantages of the Internet. Currently there are 5 largest & most famous worldwide Internet retailers: Amazon, Dell, Staples, Office Depot & Hewlett Packard. According to statistics, the most popular categories of products sold in the World Wide Web are music, books, computers, office supplies & other consumer electronics.
Amazon.com, Inc. is one of the most famous e-commerce companies & is located in Seattle, Washington (USA). It was founded in 1994 by Jeff Bezos & was one of the first American e-commerce companies to sell products over the Internet. After the dot-com collapse Amazon lost its position as a successful business model, however, in 2003 the company made its first annual profit which was the first step to the further development. History of e-commerce is a history of a new, virtual world which is evolving according to the customer advantage. It is a world which we are all building together brick by brick, laying a secure foundation for the future generations.
Introduction :
Electronic commerce also known as e-commerce,is the buying & selling of goods over the internet. It is provides incentives for both buyers and sellers. From buyer's perspective, goods & services can be purchased at any time of day @ night. E-commerce has a great deal of advantages over "brick and mortar" stores and mail order catalogs. Consumers can easily search through a large database of products and services. Customers can compare prices with a click of the mouse and buy the selected product at best prices. Traditional commerce is typically limited to standard business hours when the sellers is open. Additionally, buyers no longer have to physically travel to the seller's location. From the seller's perspective, the costs associated with owning & operating a retail outlet can be eliminated. They can operate entirely on the Web without an actual physical store & without a large sales staff. Another advantage is reduced inventory. Traditional stores maintain an inventory of goods in their stores & periodically replenish this inventory from warehouses.
E-commerce also brings some disadvantages including the inability to provide immediate delivery of goods, the inability to
"try on" prospective purchases, & security of online payments. Very few observes suggest that e-commerce will replace bricks-and-mortar businesses entirely. It is clear that both will coexist & that e-commerce will continue to grow.
Electronic commerce involves 2 parties : businesses & consumers. There are 3 basic types of electronic commerce : Business-to-consumer(B2C), Consumer-to-consumer(C2C), & Business-to-business(B2B).
· Business-to-consumer (B2C)
Ø used by large corporations, small corporations, and start-up business.
Ø the major challenges of B2C e-commerce :
Getting browsers to buy things
Building customer loyalty
Fulfillment
Ø three most widely used B2C are for :
online banking
> is the practice of making bank transactions or paying bills via
internet.
> onlice operations include transferring funds, applying for
loans ,paying bills,and accessing account information.
Online stock trading 
Online shopping 
· Business-to-consumer (B2C)
Ø used by large corporations, small corporations, and start-up business.
Ø the major challenges of B2C e-commerce :
Getting browsers to buy things Building customer loyalty FulfillmentØ three most widely used B2C are for :
online banking> is the practice of making bank transactions or paying bills via
internet.
> onlice operations include transferring funds, applying for
loans ,paying bills,and accessing account information.
Online stock trading > allows investors to research, buy, & sell stocks and bonds over
internet.
> e-trading more convenient and save cost.
Online shopping > a process wherebuy consumers directly buy goods @
services from a seller in real-time, without an
intermediary service over internet.
> numerical Web Sites that provide support for consumers
looking to compare products and to locate bargains.
Consumer-to-consumer
> Consumer-to-consumer (C2C) (or citizen-to-citizen) electronic commerce involves the electronically-facilitated transactions between consumers through some third party. A common example is the web auction, in which a consumer posts an item for sale and other consumers bid to purchase it; the third party generally charges a flat fee or commission. The sites are only intermediaries, just there to match consumers. They do not have to check quality of the products being offered.
> Consumer-to-consumer (C2C) marketing is the creation of a product or service with the specific promotional strategy being for consumers to share that product or service with others as brand advocates based on the value of the product. The investment into concepting and developing a top of the line product or service that consumers are actively looking for is equatable to a Business-to-consumer (B2C) pre launch product awareness marketing spend. > Examples of C2C : eBay & Craigslis
> This type of e-commerce is expected to increase in the future because it cuts out the costs of using another company. An example on cited in Management Information Systems, is for someone having a garage sale to promote their sale via advertising transmitted to the GPS units of cars in the area. This would potentially reach a larger audience than just posting signs around the neighborhood. In the economic downturn which commenced in 2008 C2C commerce levels increased dramatically online. eBay is basically an auction site that facilitates sales by one consumer to another.
Two Types of Web auction:
· Auction house sites – sell a wide range of merchandise directly to bidders. The auction house owner presents merchandise that is typically from a company’s surplus stock. The are generally considered safe places to shop.
· Person-to-person auction sites – operate are more like flea markets. The owner of the site provides a forum for numerous buyers and sellers to gather. As with purchases at a flea market, buyers and sellers need to be cautious.
- Business-to-business
> The volume of B2B (Business-to-Business) transactions is much higher than the volume of B2C transactions. The primary reason for this is that in a typical supply chain there will be many B2B transactions involving sub component or raw materials, and only one B2C transaction, specifically sale of the finished product to the end customer. For example, an automobile manufacturer makes several B2B transactions such as buying tires, glass for windscreens, and rubber hoses for its vehicles. The final transaction, a finished vehicle sold to the consumer, is a single (B2C) transaction.
> B2B is also used in the context of communication and collaboration. Many businesses are now using social media to connect with their consumers (B2C); however, they are now using similar tools within the business so employees can connect with one another. When communication is taking place amongst employees, this can be referred to as "B2B" communication.
Etymology :
The term "business-to-business" was originally coined to describe the electronic communications between businesses or enterprises in order to distinguish it from the communications between businesses and consumers (B2C). It eventually came to be used in marketing as well, initially describing only industrial or capital goods marketing. Today it is widely used to describe all products and services used by enterprises. Many professional institutions and the trade publications focus much more on B2C than B2B, although most sales and marketing personnel are in the B2B sector.
TIPS TO SHOP ONLINE
1.Look for signs that the business is legitimate
Buy from reputable stores and sellers. Here are some ways to check:
- Find out what other shoppers say. Sites like Epinions.com or BizRate have customer evaluations which can help you determine a company's legitimacy.
- Look for third-party seals of approval. Companies can put these seals on their sites if they abide by a set of rigorous standards such as how personal information can be used. Two seals to look for:
Better Business Bureau Online—(BBBOnline)
or
If you see the seals, click them to make sure they link to the organization that created them. Some unscrupulous merchants will put these logos on their Web sites without permission.
2. Look for signs that the Web site protects your data
- On the Web page where you enter your credit card or other personal information, look for an "s" after http in the Web address of that page (as shown below). (Encryption is a security measure that scrambles data as it traverses the Internet.)
- Also make sure there is a tiny closed padlock in the address bar, or on the lower right corner of the window.
3. Use a filter that warns you of suspicious Web sites
Browser filters warn you about reported phishing sites and block you from visiting them. For example, two browser filters are the SmartScreen Filter in Internet Explorer 8 and the Phishing Filter in Internet Explorer 7.
4. Keep your Web browser updated
Internet Explorer 7 and 8 provide another layer of protection with Web sites that use Extended Validation (EV) Secure Sockets Layer (SSL) Certificates. The address bar turns green and has both https and the closed padlock.
An EV SSL certificate not only helps ensure that communication with a Web site is secure, but it also includes information about the legitimacy of the Web site, which has been confirmed by the Certification Authority (CA) issuing the SSL Certificate.
SECURITY
The single greatest challenge for e-commerce is the development of fast, secure, and reliable payment methods for purchased goods. The three basic payment options are check, credit card, and digital cash.
Ö Checks are the most traditional. Unfortunately, check purchases require the longest time to complete. After selecting an item, the buyers send a check through the mail. Upon receipt of the check, the seller verifies that the check is good. If it is good, then the purchased item is sent out.
Ö Credit card purchases are faster and more convenient than check purchases. Credit card fraud, however, is a major concern for both buyers and sellers. Criminals known as carders specialize in stealing, trading, and using stolen credit cards over the Internet.
- Safety of Wi-Fi and Credit Card Purchases
Reputable online merchants typically take precautions to ensure the security of their customer's credit card information. Using a Wi-Fi connection while shopping online can expose transaction and financial information to criminals if simple steps are not taken.
Using credit cards to purchase items while using a Wi-Fi connection can be safe if simple precautions are taken.
- Public Wi-Fi
Unencrypted public Wi-Fi networks can be used by criminals to monitor data and gather information to commit identity theft. A criminal may be able to set up his own Wi-Fi network with the same name as a legitimate network, and the criminal could attempt to get users to connect to his network where data traffic can be monitored. This is called a "Man in the Middle Attack."
- Private Wi-Fi
Private Wi-Fi networks generally are safe to use for financial transactions provided the basic security precautions are taken. Private Wi-Fi networks should have encryption enabled. Computers used to access wireless networks should use firewall software to protect it from possible attacks, according to the online security page of the Microsoft website.
Encryption should be used on private Wi-Fi networks to enhance data security.
- Virtual Private Networks
If a credit card must be used and the only Internet connection available is a public Wi-Fi access point, the TechNet website states that a Virtual Private Network (VPN) should be used to provide another layer of data protection.
***Information in getting from the book - Computing Essential 2011
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