BY SHABEER ISMAEEL AND ISHFAQ MAJID

WHAT IS COMMERCE According to Dictionary meaning. Commerce is a division of trade or production

which deals with the exchange of goods and services from producer to final consumer

It comprises the trading of something of economic value such as goods, services, information, or money between two or more entities.

WHAT IS E-COMMERCE Commonly known as Electronic Marketing. “It consist of buying and selling goods and

services over an electronic systems Such as the internet and other computer networks.”

“E-commerce is the purchasing, selling and exchanging goods and services over computer networks (internet) through which transaction or terms of sale are performed Electronically.

TRADITIONAL BUSINESS

DIRECT SELLING

MANF. UNIT 20%

DISTRIBUTOR 10%

WHOLESALER 10%

RETAILER 10%

CUSTOMER 100%

ADVERTISEMENT 50%

CUSTOMER

COMPANY

Why Use

E-Commerce

…….?

LOW ENTRY COST REDUCES TRANSACTION COSTS

ACCESS TO THE GLOBAL MARKET

SECURE MARKET SHARE

THE PROCESSOFE-COMMERCE

A consumer uses Web browser to connect to the home page of a merchant's Web site on the Internet.

The consumer browses the catalog of products featured on the site and selects items to purchase. The selected items are placed in the electronic equivalent of a shopping cart.

When the consumer is ready to complete the purchase of selected items, she provides a bill-to and ship-to address for purchase and delivery.

When the merchant's Web server receives this information, it computes the total cost of the order--including tax, shipping, and handling charges--and then displays the total to the customer.

The customer can now provide payment information, such as a credit card number, and then submit the order.

When the credit card number is validated and the order is completed at the Commerce Server site, the merchant's site displays a receipt confirming the customer's purchase.

The Commerce Server site then forwards the order to a Processing Network for payment processing and fulfillment.

TYPES

OF

E-COMMERCE

BUSINESS-TO-BUSINESS (B2B) B2B stands for Business to Business. It consists of

largest form of Ecommerce. This model defines that Buyer and seller are two different entities. It is similar to manufacturer issuing goods to the retailer or wholesaler. 

E.g.:-Dell deals computers and other associated accessories online but it is does not make up all those products. So, in govern to deal those products, first step is to purchases them from unlike businesses i.e. the producers of those products.

BUSINESS-TO-CONSUMER (B2C): It is the model taking businesses and

consumers interaction. The basic concept of this model is to sell the product online to the consumers.

B2c is the direct trade between the company and consumers. It provides direct selling through online. For example: if you want to sell goods and services to customer so that anybody can purchase any products directly from supplier’s website.

BUSINESS-TO-EMPLOYEE (B2E) Business-to-employee (B2E) electronic

commerce is an approach in which the focus of business is the Employee. In a broad sense,B2E encompasses everything that businesses do to attract and retain well-qualified staff in a competitive Market, such as benefits, education opportunities, flexible hours, bonuses Etcetra….

CONSUMER-TO-CONSUMER (C2C) There are many sites offering free classifieds,

auctions, and forums where individuals can buy and sell. People who come together to buy, sell or trade items online take part in C2C e-commerce. Amazon and eBay's auction service is a great example of where person-to-person transactions take place every day since 1995.

ESSENTIAL E-COMMERCE PROCESSES

--Access Control and SecurityE-commerce processes must establish mutual trust and secure access between the parties in an e-commerce transaction by authenticating users, authorizing access, and enforcing security features.

--Profiling and PersonalizingProcesses that gather data on you and your website behavior and choices, and build electronic profiles of your characteristics and preferences. These profiles are then used to recognize you as an individual user and provide you with a personalized view of the contents of the site, as well as product recommendations and personalized Web advertising

--Content and Catalog ManagementContent Management software that helps e-commerce companies develop, generate, deliver, update, and archive text data and multimedia information at e-commerce websites.Catalog Management software that helps generate and manage catalog content.

--Search ManagementEfficient and effective search processes provide a top e-commerce website capability that helps customers find the specific product or service they want to evaluate or buy.

--Workflow ManagementIt ensures that the proper transactions , decisions and work activities are performed, and correct data and documents are routed to the right employees , customers and other business stakeholders.

--Event NotificationSoftware that notifies customers, suppliers, employees, and other stakeholders of their status in a transaction based on events initiated by one of the parties.

--Collaboration and Trading Processes that support the vital collaboration arrangements and trading services needed by customers, suppliers, and other stakeholders to accomplish e-commerce transactions.

ELECTRONIC PAYMENT PROCESSES Payments for the products and services purchased are an obvious

and vital step in the electronic commerce transaction process. Varieties of electronic payment systems have evolved. New

payment systems are being developed and tested to meet the security and technical challenges of electronic commerce over the Internet. Some include...

--Credit Card Payment using credit card is one of most common mode of electronic

payment. Credit card is small plastic card with a unique number attached with an

account. When a customer purchases a product via credit card, credit card issuer bank pays on behalf of the customer and customer has a certain time period after which he/she can pay the credit card bill.

The card brand - for example , visa or MasterCard.

--Debit Card

Debit card, like credit card is a small plastic card with a unique number mapped with the bank account number.

It is required to have a bank account before getting a debit card from the bank.

The major difference between debit card and credit card is that in case of payment through debit card, amount gets deducted from card's bank account immediately and there should be sufficient balance in bank account for the transaction to get completed. Whereas in case of credit card there is no such compulsion.

Debit cards free customer to carry cash, cheques and even merchants accepts debit card more readily.

--Smart Card

Smart card is again similar to credit card and debit card in appearance but it has a small microprocessor chip embedded in it.

It has the capacity to store customer work related/personal information. Smart card is also used to store money which is reduced as per usage.

Smart card can be accessed only using a PIN of customer. Smart cards are secure as they stores information in encrypted format and are less expensive/provides faster processing.

Mondex and Visa Cash cards are examples of smart cards.

--E-Money

E-Money transactions refers to situation where payment is done over the network and amount gets transferred from one financial body to another financial body without any involvement of a middleman.

E-money transactions are faster, convenient and saves a lot of time.

Online payments done via credit card, debit card or smart card are examples of e-money transactions.

Another popular example is e-cash. In case of e-cash, both customer and merchant both

have to sign up with the bank or company issuing e-cash.

--Electronic Fund Transfer

It is a very popular electronic payment method to transfer money from one bank account to another bank account.

Accounts can be in same bank or different bank. Fund transfer can be done using ATM (Automated Teller Machine) or using computer.

Nowadays, internet based EFT is getting popularity. In this case, customer uses website provided by the bank.

Customer logins to the bank's website and registers another bank account. He/she then places a request to transfer certain amount to that account.

Customer's bank transfers amount to other account if it is in same bank otherwise transfer request is forwarded to ACH (Automated Clearing House) to transfer amount to other account and amount is deducted from customer's account.

Once amount is transferred to other account, customer is notified of the fund transfer by the bank.

PROS AND CONSOF

E-COMMERCE

PROS

No checkout queues.

Reduce prices.

You can shop anywhere in the world.

Easy access 24 hours a day.

Wide selection to cater for all consumers .

CONS

Unable to examine products personally.

Not everyone is connected to the Internet.

There is the possibility of credit card number theft .

On average only 1/9th of stock is available on the net.