Introduction

Electronic commerce, commonly known as e-commerce, ecommerce,

eCommerce or e-comm, refers to the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown extraordinarily with widespread Internet usage. The use of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at one point in the transaction's life-cycle, although it may encompass a wider range of technologies such as e-mail, mobile devices and telephones as well. A large percentage of electronic commerce is conducted entirely in electronic form for virtual items such as access to premium content on a website, but mostly electronic commerce involves the transportation of physical items in some way. Online retailers are sometimes known as e-tailers and online retail is sometimes known as e-tail. Almost all big retailers are now electronically present on the World Wide Web. Electronic commerce that takes place between businesses is referred to as business-to-business or B2B. B2B can be open to all interested parties (e.g. commodity exchange) or limited to specific, pre-qualified participants (private electronic market). Electronic commerce that takes place between businesses and consumers, on the other hand, is referred to as business-to-consumer or B2C. This is the type of electronic commerce conducted by companies such as Amazon.com. Online shopping is a form of electronic commerce where the buyer is directly online to the seller's computer usually via the internet. There is often no intermediary service involved, and the sale or purchase transaction is completed electronically and interactively in real-time. However in some cases, an intermediary may be present in a sale or purchase transaction, or handling recurring or one-time purchase transactions for online games.

1. Early development
Originally, electronic commerce was identified as the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). These were both introduced in the late 1970s, allowing businesses to send commercial documents like purchase orders or invoices electronically. The growth and acceptance of credit cards, automated teller machines (ATM) and telephone banking in the 1980s were also forms of electronic commerce. Another form of e-commerce was the airline reservation system typified by Sabre in the USA and Travicom in the UK. From the 1990s onwards, electronic commerce would additionally include enterprise resource planning systems (ERP), data mining and data warehousing In 1990, Tim Berners-Lee invented the WorldWideWeb web browser and transformed an academic telecommunication network into a worldwide everyman everyday communication system called internet/www. Commercial enterprise on the Internet was strictly prohibited by NSF until 1995. Although the Internet became popular worldwide around 1994 with the adoption of Mosaic web browser, it took about five years to introduce security protocols and DSL allowing continual connection to the Internet. By the end of 2000, many European and American business companies offered their services through the World Wide Web. Since then people began to associate a word "ecommerce" with the ability of purchasing various goods through the Internet using secure protocols and electronic payment services.

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Common applications related to Electronic commerce

Some common applications related to electronic commerce are the following:

Document automation in supply chain and logistics Domestic and international payment systems Enterprise content management Group buying Automated online assistants 2

 Instant messaging Newsgroups Online shopping and order tracking Online banking Online office suites Shopping cart software Teleconferencing Electronic tickets.

3. Govermental Regulation
In the United States, some electronic commerce activities are regulated by the Federal Trade Commission (FTC). These activities include the use of commercial emails, online advertising and consumer privacy. The CAN-SPAM Act of 2003 establishes national standards for direct marketing over e-mail. The Federal Trade Commission Act regulates all forms of advertising, including online advertising, and states that advertising must be truthful and non-deceptive.[15] Using its authority under Section 5 of the FTC Act, which prohibits unfair or deceptive practices, the FTC has brought a number of cases to enforce the promises in corporate privacy statements, including promises about the security of consumers personal information. As result, any corporate privacy policy related to e-commerce activity may be subject to enforcement by the FTC. The Ryan Haight Online Pharmacy Consumer Protection Act of 2008, which came into law in 2008, amends the Controlled Substances Act to address online pharmacies.

Global trends
Business models across the world also continue to change drastically with the advent of eCommerce and this change is not just restricted to USA. Other countries are also contributing to the growth of eCommerce. For example, the United Kingdom has the biggest e-commerce market in the world when measured by the amount
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spent per capita, even higher than the USA. The internet economy in UK is likely to grow by 10% between 2010 to 2015. This has led to changing dynamics for the advertising industry. Amongst emerging economies, China's eCommerce presence continues to expand. With 384 million internet users,China's online shopping sales rose to $36.6 billion in 2009 and one of the reasons behind the huge growth has been the improved trust level for shoppers. The Chinese retailers have been able to help consumers feel more comfortable shopping online. eCommerce is also expanding across the Middle East. Having recorded the worlds fastest growth in internet usage between 2000 and 2009, the region is now home to more than 60 million internet users. Retail, travel and gaming are the regions top eCommerce segments, in spite of difficulties such as the lack of region-wide legal frameworks and logistical problems in cross-border transportation. E-Commerce has become an important tool for businesses worldwide not only to sell to customers but also to engage them.

Forms
Contemporary electronic commerce involves everything from ordering "digital" content for immediate online consumption, to ordering conventional goods and services, to "meta" services to facilitate other types of electronic commerce. On the institutional level, big corporations and financial institutions use the internet to exchange financial data to facilitate domestic and international business. Data integrity and security are very hot and pressing issues for electronic commerce.

Impact on markets and retailers

Economists have theorized that e-commerce ought to lead to intensified price competition, as it increases consumers' ability to gather information about products and prices. Research by four economists at the University of Chicago has found that the growth of online shopping has also affected industry structure in two areas that have seen significant growth in e-commerce, bookshops and travel agencies. Generally, larger firms have grown at the expense of smaller ones, as they are able to use economies of scale and offer lower prices. The lone exception to this pattern has been the very smallest category of bookseller, shops with between one and four employees, which appear to have withstood the trend.

Distribution channels
E-commerce has grown in importance as companies have adopted Pure-Click and Brick and Click channel systems. We can distinguish between pure-click and brick and click channel system adopted by companies. Pure-Click companies are those that have launched a website without any previous existence as a firm. It is imperative that such companies must set up and operate their e-commerce websites very carefully. Customer service is of paramount importance. Brick and Click companies are those existing companies that have added an online site for e-commerce. Initially, Brick and Click companies were skeptical whether or not to add an online e-commerce channel for fear that selling their products might produce channel conflict with their off-line retailers, agents, or their own stores. However, they eventually added internet to their distribution channel portfolio after seeing how much business their online competitors were generating.

Electronic Commerce Class

Electronic Commerce (EC) is the process of buying, selling, transferring, or exchanging goods, services, information, or relationships via computer networks, mostly the Internet and Intranets. In this course, we adopt a boarder definition of EC (often referred to as Electronic Business) that covers activities throughout a firms value chain, such as searching customers and suppliers, serving customers, collaborating with business partners, and conducting electronic transactions among trade parties. In short, EC is any transaction that involves the use of computer networks.

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What are the Benefits of eCommerce for eBusiness?

The processes involved with conducting business on the Internet and opening

an eCommerce shop to sell from have several benefits to both merchants and the customers who buy from them. The biggest benefits of conducting business Online include a cheaper upfront cost to the merchant, it's easier to set up and open the store and it's faster to get an Online business up, running and making sales. Helps Create New Relationship Opportunities: Expanding or opening an eBusiness can create a world of opportunity and helps to establish new relationships with potential customers, potential business associates and new product manufacturers. Just by being in an easy to find location that is accessible to users all over the world, you will be available for others to find and approach you about new opportunities. Customers who don't know you exist will know about you, product suppliers will request you add their items and other businesses will approach you about partnership opportunities. Many of these opportunities would not present themselves without an Online presence or site for them to discover you on their own.

Open for Business 24x7: An eCommerce site basically gives you the ability to have unlimited store hours, giving your customers 24 hours a day, 7 days a week access to shop and buy items from you. Some merchants choose to limit their hours to 5 days a week, but orders can still be made over the weekend and customers can still make contact 24/7 via email, phone or fax. In addition, the costs associated with having your store open 24/7 are much less than maintaining a physical storefront or phone operator with 247 operation capability. You can literally take orders and let customers shop while you sleep, take vacations or from remote locations. Increases Brand or Product Awareness: Having an Online business means that you can literally reach out to millions of consumers looking for what you sell anywhere in the world. By reaching out to new markets and displaying your site prominently in front of them, you will be able to help increase your company/domain brand name and also increase awareness about your product line. By giving users 24/7 access in an easy to find location, you will help to create more word of mouth buzz for your eBusiness, in turn helping to promote your brand name and products. Users who haven't heard of you will discover you exist and help spread the word about you. Helps Establish Customer Loyalty: An eCommerce storefront will help create an easier means for your customers to purchase the items you sell and offers a unique way to display and describe your products in a informative, visual and interactive way. The customers you have will become more loyal shoppers each time they visit, making eCommerce great for improved customer satisfaction and visitor loyalty. Now that you offer your products for sale Online, consumers will be able to shop from your catalog more easily, get updates on new items or product discounts and can shop or buy anytime they wish. Potential to Increase Overall Business Sales: An eCommerce store that is an extension of a physical storefront is a great way to boost overall business sales and potentially increase company profits across
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the board. Companies who already do business from a physical location are typically unaware of how much more they could be making if only they were to expand into their Online marketplaces. Selling Online opens up many opportunities for businesses both new and old. It's a great way to increase sales, especially if you already have a physical store. Potential to Increase Company Profits: As mentioned above, opening an Online extension of your store or moving your business solely Online are great ways to boost sales and potentially profits. Remember, just because SALES increase it does not necessarily mean that company PROFITS will increase also. Online businesses do have a greater chance of increasing sales and profits by opening up an eCommerce store to sell the items they offer. Sales and profits are the lifeblood of any company, so it makes sense to increase them where ever possible and whenever possible throughout the existence of your company. More sales, more profits, bigger budgets, etc. Potential to Decrease Some Costs: In addition to potentially increasing sales and profits, eBusiness owners can also typically reduce the costs of running their business by moving it or expanding it into the Online world. eCommerce stores can run with less employees including sales staff, customer service reps, order fulfillment staff and others. eBusinesses also do not need a physical location in order to stay operational, which can reduce costs related to building leases, phone bills, utility costs and other costs associated with running a brick-and-mortar storefront. Expands Geographical or Customer Reach: As mentioned, owning an eCommerce business typically means no limits as to who and where you can sell your products. Some countries outside the United States have additional regulations, licensing requirements or currency differences, but generally you will not be limited on the customers you can reach out to. Physical storefronts are limited to the city in which they are located, Online businesses aren't limited unless you put geographical limits in place. At the very least, you should

consider targeting U.S. buyers, but also consider, Canada, UK, Australia and others. Sell to anyone, anywhere, anytime!

Allows for Smaller Market or Niche Targeting: Although your customer reach may expand beyond your local area, you may only wish to target smaller consumer markets and buyer niches for your eCommerce products. Owning an Online store gives the merchant much control over who they target and reach out to notify about the items for sale in their store. Currently, you can target women, men, a generation of users, a particular race and many more smaller niche markets. This is typically done by placing keywords that those niche markets use on a regular basis when shopping for the items you offer. Allows for Easier Delivery of Information: An Online store and Web brochure are great ways to deliver and display information about your company and the products you sell. With an Online presence your customers will have direct access to product information, company information, specials, promotions, real time data and much more information that they can easily find just by visiting your site day or night. Not only does it benefit your customers, but it's also generally easier for merchants to update their site rather than break down an in store display and put up another for the next event. It saves both your customers and you precious time and can help you to plan more updates or better sales as it will be much easier for you to update and take down.

10.Disadvantages of e-Commerce
Shopping Takes Time If you sell physical goods, shipping it halfway round the world might take several days, weeks or even more. It means you cannot send certain products as fresh food or dairy products. Who on earth would love to have stale bread delivered to his door?
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A Solving Idea: Browse through your products. Pick the ones you can easily deliver, highlight them on your online store. While products that cannot be easily delivered are the ones you should sell on your physical store, with your online store functioned as its promotional media. Shipping Costs More The basic shipping cost rule is simple: the more the weight, the more the cost. If you sell a couch to someone on another continent, the shipping cost would be ridiculous. A Solving Idea: Offer an irresistible deal on bulk purchase. Doubts and Fears Many people dont understand the awesomeness of shopping online. They are too afraid to buy something on the web because they doubt if the store is reliable, curious if the product is as good as it looks like on the site, afraid that you would steal their money. Doubts and fears are human basic instincts. Embrace them to deal with them. A Solving Idea: Write blog posts, newsletters or FAQs about how reliable your store is, about how you are going to deal with customers complaints and feedbacks, about how and when they can contact you. Provide security as everyone needs to feel secured. Inability to Feel the Physical Online store doesnt provide the opportunity to actually touch, wear or sit on the product. Therefore selling such products as apparel and furniture online might be tricky.

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A Solving Idea: Provide the most comprehensive and complete product description. If doable, provide demos of the products. Harmful Malicious Codes The server backing up your online store might be infected by malicious codes. If thats the case, your online store might be the hellgate that sends those little devils to your customers computers. A Solving Idea: Choose the most reliable server provider. It might cost you, but the risk of having an infected server would cost you even more. Shopping is Social Experience People love to shop in the mall because it gives them an opportunity to have fun with friends and family. Its something online stores lack of.

A Solving Idea: Integrate social element into your online store. If matched with your products, some interactive games will do no harm.

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Too Many Competitors Yes, you can easily create an online store. Using our WordPress e-commerce themes you can even do it in less than 5 minutes. Problem is, everyone else can, too. If there are thousands of online stores selling similar products, how can you attract visitors so they actually buy from you and not from others? A Solving Idea: As any other business form, you need to be great in such element as business plan, marketing, sales, customer support and others. That way youll have your online store standing out in the crowd. And as any other successful businessman, youll just need to keep learning. Dare yourself to try new, unexplored business moves. Never be too prideful to do the cliches as they are well, proven to be good. Now that you have understand the advantages and the disadvantages of ecommerce, you should be ready to open your very own online store. Check out our WordPress e-commerce themes so you can have a beautiful one easily.

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Conclusion
Electronic commerce or ecommerce is a term for any type of business, or commercial transaction, that involves the transfer of information across the Internet. It covers a range of different types of businesses, from consumer based retail sites, through auction or music sites, to business exchanges trading goods and services between corporations. It is currently one of the most important aspects of the Internet to emerge. Ecommerce allows consumers to electronically exchange goods and services with no barriers of time or distance. Electronic commerce has expanded rapidly over the past five years and is predicted to continue at this rate, or even accelerate. In the near future the boundaries between "conventional" and "electronic" commerce will become increasingly blurred as more and more businesses move sections of their operations onto the Internet. Business to Business or B2B refers to electronic commerce between businesses rather than between a business and a consumer. B2B businesses often deal with hundreds or even thousands of other businesses, either as customers or suppliers. Carrying out these transactions electronically provides vast competitive advantages over traditional methods. When implemented properly, ecommerce is often faster, cheaper and more convenient than the traditional methods of bartering goods and services.

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References
1. Content Rules by Ann Handley, C.C. Chapman and David Meerman Scott. 2. Get Rich Click! by Marc Ostrofsky,( 2002)
3. MODERN MANAGEMENT THEORIES AND PRACTICES (Dr. Yasin Olum

Lecturer, Makerere University), (2004)

4. http://en.wikipedia.org/wiki/Electronic_commerce 5. http://tokokoo.com/2010/07/advantages-and-disadvantages-of-e-commerce

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