Introduction to E Commerce

List of Articles Introduction to E-Commerce

As a customer, we are involved in buying lot of products and services (and information) in our day to day life. Once we identify a need for something, whether it is physical product a service (or information) we look for information about that product or service and find places that sell it. For this we make use of different kinds of advertisements, TV shoes, Talk shows, Catalogs, Handouts, Conversations with sales people etc. Then we compare the options (prices, service, reputation and so on) before we actually purchase that product. Making the sale might also involve negotiating the price, quantity, terms of delivery and may be some legal issues.

On the other hand, to meet market needs businesses design and manufacture new products (or upgrade the existing ones), market these products, distribute them and provide customer support generating revenue for themselves along the way.

Banks and other financial institutions handle the transfer and funds between buyers and sellers.

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In the process of buying something, we as a customer, are satisfied if we can get a quality product (or service) which exactly matches our expectations and if that product is available as quickly as possible at the affordable price with reasonable amount of before and after sales support.

In the process of selling something, businesses try to stay competitive, improve productivity and deliver quality service so as to maximize customer satisfaction and to generate as much revenue as possible.

Involvement of banks and other financial institutions reduce the risk of handling monetary transactions.

In order to maximize the customer satisfaction and also to maximize the profit, businesses are constantly adopting new technologies and methods to improve various business processes. For example, automating the entire production line can improve and increase the production or exchanging the business information electronically can reduce paper handling cost and errors, which in turn will reduce the cost of the product.

E-commerce is another step in this evolution, which if applied properly, can benefit both businesses and customers to achieve what they want.

E-commerce can be primarily seen as a system that includes those transactions that center on buying and selling goods and services to directly generate revenue. But it also includes the transactions such as generating demand for those goods and services, offering sales support and customer service or facilitating communication between business partners.

E-commerce makes communication, information gathering and trade between the companies and between companies and consumers easier and faster.

Formally e-commerce is a modern business methodology that addresses the needs of organizations, merchants and consumers to cut costs while improving the quality of goods and increasing the speed of services.

In traditional way of doing business, a typical sales cycle, from acquiring the product information, requesting the product to paying for the product requires multiple media to be used such as magazines, flyers, online catalogs, printed forms, letters, mails etc. This makes the co-ordination more difficult and increases the time required to process the order.

Whereas using e-commerce, everything remains digital and only one medium is employed. Everything right from product advertising, marketing to acceptance of payment and customer support can be done electronically.

Despite getting the advantages like reduction in cost, improvement in the quality of goods and increase in the speed of services, there are other factors that are forcing companies to adopt

e-commerce as a business methodology:

Most companies have already made enormous information technology investments to automate their key internal processes such as purchasing, invoicing and other similar functions. So some aspects of the technical infrastructure for electronic commerce are already in place.

Prices of computer hardware and networking equipment continue to fall, making IT investment appealing for many businesses.

Internet technology has become more appealing to consumers. For example use of WWW has allowed more consumers to confidently use the Internet.

2. Benefits of e-commerce

Though using e-commerce methodology to automate the business processes fully requires the re-design of a company’s business processes, e-commerce offers following benefits to the companies:

Reduction in cost due to

Cheaper Internet prices.
Less paper work involved due to digitization of information.
Reusing the digitized information in many different ways. E.g. catalog data stored in database can be presented electronically via web and also it can be printed in customized catalogs targeted at specific market niches.
Reduction in support staff. E.g. compiling and publishing Frequently Ask Questions (FAQ) can help user to get the answer to these questions at their finger tips 24 hrs a day, 7 days a week.
Outsourcing of products and services globally.

Improving the quality of goods

Direct contact with customers can help tracking customer satisfaction, requesting more customer feedback and presenting custom solutions.

Increase in the speed of services

Because all the information is available right at fingertips, and because only one medium is involved, everything right form advertising, marketing, purchasing to customer support can be done at the fastest rate.

Increase in the market share

It opens avenues for new markets and new customers. E.g. by expanding the business globally.

The article is written by the E Commerce team at Fands Infotrainers. For more information send mails to articles@fandsindia.com