E-Commerce Business

"E-Commerce" (in short for Electronic Commerce) is a Market Place that exists on the Internet. It is simply an extension of "Commerce" as we have known it for many years. Therefore a clear understanding of what commerce is should be our stepping stone to understand what e-commerce is.

Commerce is defined as the exchange or buying and selling of commodities on a large scale involving transportation from place to place. Simply put, it amounts to the exchange of goods and services for money. In a commercial transaction, there would be at least two parties involved from among buyers, sellers, retailers, wholesalers, distributors and producers. Similarly, there should exists one or more of the following criteria (among others) for a commercial transaction to materialize, such as a product or a service offered, a place at which the offer and / or acceptance (fulfillment) takes place, marketing to promote people to come to you, orders, billing, money for effecting payment / settlement, customer service and technical support - (often through email, on line forms, FAQs etc. and mainly in the fields of selling computers, cell phones, and many other types of electronic services etc.)

E-Commerce is concerned with the replacement of physical aspects of a commercial transaction with electronic aspects. The best way to demonstrate the meaning of E-Commerce, how it works and its distinct advantages over conventional commercial transactions is to consider some real time examples.

Consider a product or a service. A product can be a software program that you wish to purchase (which need not be a CD); it can be a link to download the software program to your computer, and similarly, the place necessarily does not have to be a store or a shop, but it could be a telephone number, an email address or a web site. The order may be just an online form and the money may be simply entering your credit card number on the website. You can see that traveling, billing, writing a cheque, packing and transport are completely eliminated. The whole transaction is completed by just sitting in front of your computer and doing some other work while the download completes (taking some time depending on the speed of your Internet connection).

Notice how Amazon.com achieves record sales of books without having many outlets and racks full of books with the complexities of how and in what manner to arrange such a wide range of books. It is done very simply through the electronic media without incurring any costs on displaying the books physically or publishing and updating catalogs in respect of the available books. Just imagine the size and the cost of a catalog if they were to be paper printed, and what a waste it would be to give such a catalog to any person who requests for one, who may or may not buy even a single book. No clerks are required to answer telephone inquiries, take down and process orders, for billing and sending the bills by post incurring a further cost.