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Explanation of Basics of eCommerce by Ron Kurtus - Succeed in eCommerce: Running an Online or Internet Business. Also refer to online selling, web stores, catalog sales, mail order, shopping cart, School for Champions. Copyright © Restrictions
Basics of eCommerce
by Ron Kurtus (revised 5 May 2009)
eCommerce (or e-commerce) consists of buying and selling products and services over the Internet, as opposed to the standard commerce practices. It is a subset of a company's eBusiness strategy. Often e-commerce is used to add revenue streams to a standard business.
E-commerce is a subset of business, where products and services are advertised, bought and sold electronically or 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.
Questions you may have include:
- How is e-commerce different than traditional sales?
- What are the advantages and disadvantages of e-commerce?
- How can a business get set up to sell online?
This lesson will answer those questions. There is a mini-quiz near the end of the lesson.
Marketing
Business or company sets up a web presence and uses marketing and e-marketing techniques to get potential customers to visit their website.
Sales
Potential customers access website to see what products are available, as well as their prices.
Customer decides to purchase a product online. Transaction is made.
Elements of e-commerce
Just as in tradition commerce, especially that done by mail order, there are certain elements required to perform online business. You must:
- Promote your Web site presence
- Have an online catalog or store
- Have the capability to receive payments
- Be able to deliver the item
- Provide after-the-sale support
Web site promotion
You need to advertise and promote your business, so that the customers will either come to your store, read your catalog or view your Web site.
Online catalog or store
You need to have a store or catalog where customers can view and select goods or services. Customers need to be able to easily get around your catalog 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 and support
Transaction is made and product is delivered.
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.
Setting up an online store
You can purchase one of the various ready-made software applications that set up your online business. The problem there is the lack of ability to customize the application.
You can also have a Web programmer develop such a store in a language such as ColdFusion. You may not get as sophisticated site, and it may cost more in the long run if you start to re-invent the wheel.
The best bet is to look at both possibilities and pick a solution that is in-between.
Summary
Online commerce is similar to the mail order business, except that it has potential for worldwide markets. You must not only promote your Web site, but you must also make it easy to find, select and purchase the items. Delivery and support issues are similar to that in mail order.
To set up your own online store, you can either purchase e-commerce software or have your capabilities custom programmed.
See side menu for more eCommerce topics
Remember that selling helps the customer satisfy needs
Resources
The following are resources on this subject.
Websites
Introduction to eCommerce tutorial - Good overview from Online-commerce.com
List of eCommerce material - A number of good resources from About.com
Books
Mini-quiz to check your understanding
If you got all three correct, you are on your way to becoming a champion in e-commerce. If you had problems, you had better look over the material again.
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Also see Answers to Readers' Questions.
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Basics of eCommerce