UNIT-II

Ecommerce definition and types of ecommerce

Ecommerce (e-commerce) or electronic commerce, a subset of ebusiness, is the purchasing, selling, and
exchanging of goods and services over computer networks (such as the Internet) through which
transactions or terms of sale are performed electronically. Contrary to popular belief, ecommerce is not
just on the Web. In fact, ecommerce was alive and well in business to business transactions before the
Web back in the 70s via EDI (Electronic Data Interchange) through VANs (Value-Added Networks).
Ecommerce can be broken into four main categories: B2B, B2C, C2B, and C2C.

B2B (Business-to-Business)
Companies doing business with each other such as manufacturers selling to distributors and
wholesalers selling to retailers. Pricing is based on quantity of order and is often negotiable.

B2C (Business-to-Consumer)
Businesses selling to the general public typically through catalogs utilizing shopping cart
software. By dollar volume, B2B takes the prize, however B2C is really what the average Joe has
in mind with regards to ecommerce as a whole.

Having a hard time finding a book? Need to purchase a custom, high-end computer system?
How about a first class, all-inclusive trip to a tropical island? With the advent ecommerce, all
three things can be purchased literally in minutes without human interaction. Oh how far we've
come!

C2B (Consumer-to-Business)
A consumer posts his project with a set budget online and within hours companies review the
consumer's requirements and bid on the project. The consumer reviews the bids and selects the
company that will complete the project. Elance empowers consumers around the world by
providing the meeting ground and platform for such transactions.

C2C (Consumer-to-Consumer)
There are many sites offering free classifieds, auctions, and forums where individuals can buy
and sell thanks to online payment systems like PayPal where people can send and receive
money online with ease. eBay's auction service is a great example of where person-to-person
transactions take place everyday since 1995.

Companies using internal networks to offer their employees products and services online--not
necessarily online on the Web--are engaging in B2E (Business-to-Employee) ecommerce.

G2G (Government-to-Government), G2E (Government-to-Employee), G2B (Government-to-Business),

B2G (Business-to-Government), G2C (Government-to-Citizen), C2G (Citizen-to-Government) are other
forms of ecommerce that involve transactions with the government--from procurement to filing taxes to
business registrations to renewing licenses. There are other categories of ecommerce out there, but
they tend to be superfluous.
Figure 1-1 Typical E-Commerce Architecture

Common Application Protocols

Some common applications protocols are as follows:

HTTP (HyperText Transfer Protocol) is used to transfer web pages. You may
have noticed that every line in the address bar of your browser startshttp://www.
This tells the application, in this case the browser, which protocol to use when
communicating with the application on the remote computer.

FTP (File Transfer Protocol) is used when two computers are transferring files
between each other. Your browser supports this protocol as do all ftp clients.

SMTP (Simple Mail Transfer Protocol) is used to send emails and to transfer mail
messages between mail servers.

POP3 (Post Office Protocol 3) allows email clients to read mail from mail servers.

DNS (Domain Name Service) allows networked computers to locate each other.
 DHCP (Dynamic Host Configuration Protocol) is used to automatically assign IP
addresses to networked computers. Each networked computer needs a unique IP
address.

TCP/IP (Transmission Control Protocol/Internet Protocol) is sometimes

referred to as the 'Internet' protocol for the simple reason that it is the most widely
used protocol when connecting to the Internet.

Advantages of E-commerce:
Time saving is the reason number one for using electronic commerce. People now have
access to their money and what they need to buy from home and work all from a desktop
computer.
Consumers have an access to a wider range of products company now can use
internet sites as shop fronts, so consumers can browse, buy from many different sellers and
making it easier to find exactly what they are looking for.
Allows small businesses to mix with the big business online with a relatively small
cost, a new business can set its self up to conduct transactions online.
Provide benefits to suppliers of goods and services company now can target a
wider variety of consumers even take the product or service international, allowing them a
means of supplying their goods to places that were before unreachable.
Business is Open 24 x 7 x 364 7/8 it works while you play or sleep. They are open for
business every hour of the day, every day of the week, every week of the year. Your
receptionist, greeter and front people are always working for you because they are your
website. They do not complain about the long hours.
Messages spreading (world wide market space) advertising on the web can make a
big or small firms promotional message reach out to potential customers all over the world
quickly and small cost as an online marketing strategy.
Help protect against frauds and theft losses electronic payments can be easier to
monitor than payments are made by cheques.
 Thinking Outside the Globe selling something made by someone else, shipped by yet
another and the money handled by yet another is the heart of the advantages e commerce
brings to the business world. You can even employ an international staff. Some work you
may need done can be more effectively done by companies or even individuals in other
countries.

Disadvantages of E-commerce:
Purchase to Delivery when making a purchase at a brick and mortar business, you get
the product when you pay for it. On the web, there may be a time lag from purchase to
actually being able to consume. The consumer will have to wait for delivery of physical
goods.
Inability to Feel the Physical it is nearly impossible to sell things like furniture and
tires online. Furniture is something people like to sit on and know the feel. Tires need to be
installed once purchased. The old tires also need to be disposed of. In both instances, there
is a need for real actions to fulfill the reason for the purchase. Thats why things like food,
jewelry, antiques etc. can never turn to E-commerce.
Trouble recruiting and retaining employees the company needs well-expert and
skilled staff to keep up and create the ecommerce facilities of the company. Many
companies favor to outsource their improvement and programming tasks to decrease labor
costs.
Consumers feel less confident with their credit card numbers most of the
consumers are still not confident in providing their credit card numbers for making
payments on the website while shopping on the Internet.

Not every company can take the benefit some of the small companies may not be
able to take the benefit of E-commerce for example the lack of expertise and lack of
technology. The legal environment in which E-commerce is conducted is full of unclear and
conflicting laws. It should be noted that mostly these disadvantages stem from the
newness and rapidly growth of the technology.
 E-Business
E-business (electronic business) is the conduct of business processes on the Internet.
These electronic business processes include buying and selling products, supplies and
services; servicing customers; processing payments; managing production control;
collaborating with business partners; sharing information; running automated employee
services; recruiting; and more.

E-Business is the business that is done through internet and it has its own advantages
and disadvantages.

ADVANTAGES

1. It connects the consumers and business people anywhere from world through internet.
2. Customers can get products at their door-step by just few clicks. This gives comfort to
customers. This saves time.
3. This supports the elderly and disabled people who cannot go out to get their needs.
4. This is 247 business with less effort of humans and therefore more convenient to both
buyers and sellers.
 DISADVANTAGES

1. Some people use this E-Business in wrong way. There is a possibility of misusing the buyers
bank details.
2. E-Business products are little costly because of using upgraded hardware and training
personnel.
3. There are many chances that customers get cheated by not providing the Product as shown in
the website.
4. The users of the website might get the viruses if the website has some malware.

What is EDI? Electronic Data Interchange (EDI) is the computer-to-

computer exchange of business documents in a standard electronic
format between business partners.

By moving from a paper-based exchange of business document to one that is

electronic, businesses enjoy major benefits such as reduced cost, increased processing
speed, reduced errors and improved relationships with business partners. Learn more
about the benefits of EDI here.
Each term in the definition is significant:

Computer-to-computer EDI replaces postal mail, fax and email. While email is
also an electronic approach, the documents exchanged via email must still be
handled by people rather than computers. Having people involved slows down the
processing of the documents and also introduces errors. Instead, EDI documents
can flow straight through to the appropriate application on the receivers computer
(e.g., the Order Management System) and processing can begin immediately.
A typical manual process looks like this, with lots of paper and people involvement:
The EDI process looks like this no paper, no people involved:

Business documents These are any of the documents that are typically exchanged
between businesses. The most common documents exchanged via EDI are purchase orders,
invoices and advance ship notices. But there are many, many others such as bill of lading,
customs documents, inventory documents, shipping status documents and payment
documents.
Standard format Because EDI documents must be processed by computers rather than
humans, a standard format must be used so that the computer will be able to read and
understand the documents. A standard format describes what each piece of information is
and in what format (e.g., integer, decimal, mmddyy). Without a standard format, each
 company would send documents using its company-specific format and, much as an
English-speaking person probably doesnt understand Japanese, the receivers computer
system doesnt understand the company-specific format of the senders format.
There are several EDI standards in use today, including ANSI, EDIFACT,
TRADACOMS and ebXML. And, for each standard there are many different versions,
e.g., ANSI 5010 or EDIFACT version D12, Release A. When two businesses decide to
exchange EDI documents, they must agree on the specific EDI standard and version.

Businesses typically use an EDI translator either as in-house software or via an EDI service provider
to translate the EDI format so the data can be used by their internal applications and thus enable straight
through processing of documents.

Business partners The exchange of EDI documents is typically between two different companies, referred
to as business partners or trading partners. For example, Company A may buy goods from Company B.
Company A sends orders to Company B. Company A and Company B are business partners.

Overview of EDI benefits and drawbacks

The EDI process provides many benefits. Computer-to-computer exchange of information is much less
expensive than handling paper documents. Studies have shown that manually processing a paper-based
order can cost $70 or more while processing an EDI order costs less than one dollar.
Much less labor time is required
Fewer errors occur because computer systems process the documents rather than processing by hand
Business transactions flow faster.
Faster transactions support reduction in inventory levels, better use of warehouse space, fewer out-of-
stock occurrences and lower freight costs through fewer emergency expedites.
Paper purchase orders can take up to 10 days from the time the buyer prepares the order to when the
supplier ships it. EDI orders can take as little as one day.
One drawback is that companies must ensure that they have the resources in place to make an EDI
program work; however, the need for buying and hiring these resources or outsourcing them may be
offset by the increased efficiency that EDI provides.
What is Difference between E-commerce and E-Business?

E-commerce is buying and selling using an electronic medium. It is accepting credit and
payments over the net, doing banking transactions using the Internet, selling commodities or
information using the World Wide Web and so on.

E-Business in addition to encompassing E-commerce includes both front and back-office

applications that form the engine for modern E-commerce. E-business is not just about E-
commerce transactions; it's about re-defining old business models, with the aid of technology to
maximize customer value. E-Business is the overall strategy and E-commerce is an extremely
important facet of E-Business.

Thus e-business involves not merely setting up the company website and being able to accept
credit card payments or being able to sell products or services on time. It involves fundamental
re-structuring and streamlining of the business using technology by implementing enterprise
resource planning (ERP) systems, supply chain management, customer relationship management,
data ware housing, data marts, data mining, etc.

Definitions
Electronic cash (e-cash) A digital currency used on the Internet to buy and sell products.
Electronic commerce (e-commerce) Any form of commerce in which the buyer of a product
or service uses a computer to interact with the computer system of the seller of that product or
service.
Internet A collection of interconnected computers that people can log onto to share
information, to communicate, to be entertained, and to perform electronic commerce
transactions.
Intranet A network internal to your organization that is built either partially or completely
from Internet-based technology.

World Wide Web (WWW) A component of the Internet that provides users with the ability to
move from computer system to computer system by following predefined links among those
systems.