E-CommerceBy: Jude Johnson, Nikkilynn Lara, Mike Kazarian, Jake Kemble, Rachel Mann

The buying and selling of goods and services over public and private computer networks

This definition is restricted to purchasing and selling transactions

Merchant Companies by goods for resale Non-Merchant Companies arrange for the

purchase and resale of goods without taking ownership

What is E-Commerce?

Originally, electronic commerce meant the facilitation of commercial transactions electronically, primarily by using Electronic Data Interchanges (EDI) and Electronic Funds Transfers (EFT)

Allowed the transfer of purchase orders and invoices electronically

In the 80’s, ATMs and credit cards were added to the e-commerce

The 90’s included enterprise resource planning systems (ERP), data mining, and data warehousing.

Early Development

In 1994, as the Internet gains popularity, E-Commerce becomes more prevalent

It took about four years to develop the security protocols and DSL to allow rapid access and a persistent connection to the Internet

Early Development Cont.

Business to ConsumerCustomers enter the web-site and manage their

orders Business to Business

Raw materials and other goods are sold and distributed between companies

Business to GovernmentSuppliers, distributors, and retailers sell goods to

the Government

Merchant Companies

Auction housesMatches buyers and sellers by using an e-

commerce version of a standard auction Clearing houses

Goods and services provided at a specific price and arranged for delivery, but the clearing house never takes the title to the good

Electronic exchanges

Non-Merchant Companies

*B2B e-commerce occurs when a business sells products and services to other businesses

*MRO items: maintenance, repair, operations

Business to Business

*E-marketplace is an interactive market space where multiple buyers and suppliers engage in e-commerce activities*Sharing critical information

*Development of products and parts

*Collaborating new ideas

*Undergoing project applications

B2B E-Marketplaces

Horizontal E-Marketplace:

connects buyers and sellers across many industries, primarily for MRO materials commerce

Vertical E-Marketplace: connects buyers and sellers in a given industryExamples: oil, raw materials, and retail items

2 E-Marketplaces

*long-term relationship

*more business actions: negotiations on

-prices

-specifications

-delivery time

Marketing Mix

*marketplace for businesses to interact with each other in order to undergo e-commerce for mutual benefits

*enables the real-time flow of information between businesses regardless of standards, language barriers, or geographic location

*world’s largest global platform

*2005: processes more than 4 BILLION business documents

GSX: Global Services Exchange

Plays a vital part of e-commerce HTML-Hypertext Markup Language Hyperlinks Three tier architecture

Web Technology

New technologies are developing due to success of e-commerce

They develop due to increasing competition.

Examples are:Amazon.com-One click, which keeps customer’s

credit card infoiPix’s 360 degree images-greater dimension to

pictures.Ajax-pulls relevant data forward to allow for

seemless shopping

New Techonolgies

Effective tool for competitive strategies Use of RFM

Find out who is shopping:Recent, Frequent, and how much they spend

Customers can leave comments

Information Systems

Information Technology

3 Types Businesses Use: Electronic Data Interchange (EDI) Electronic Fund Transfer (EFT) Secure Socket Layer (SSL)

“EDI” is the transfer of data between different Businesses using networks.

The most common type of networks used are:VANSEthernet

EDI replaces the process of faxing and mailing papers, making the Business more efficient while reducing costs.

Electronic Data Interchange (EDI)

Electronic Fund Transfer is when:A cardholder makes a transaction using a

payment card. (Ex. ATM/Credit card)An Electronic payment is made from a business.

(Ex. Paycheck) An Electronic check is used for payment by a

business.

Electronic Fund Transfer (EFT)

Many types of transactions can be performed by businesses such as:Sale - EnquiryRefund - E top-upWithdrawal - AdministrativeDepositCash backInter-account transfer

Electronic Funds Transfer

Single Message Clearing: Is when a financial network authorizes and

clears the transaction in the same message.

Dual Message Clearing Is when a “hold” for the total amount purchased

is placed on the funds authorized for a specific time, until the transaction is cleared.

EFT Authorization Types:

A protocol that uses a cryptographic system.

This system uses two keys to encrypt data.The key is used for the business to decipher the

incoming data. Businesses use this system in order to give

and obtain confidential information such as credit card numbers.

Secure Socket Layer (SSL)

E-commerce improves Market Efficiency by:Disintermediation Improved flow of price informationKnowledge of price elasticity

B2B markets are built around open standards and communication infrastructures of the internet.

Provide open-networks Aggregate product and price information

and match supply and demand to facilitate transactions between buyers and sellers

Advantages

Security weaknesses pose a constant threat User Interface components ( toolbars, keys,

etc.) may be overwhelming Information sharing between buyers and

sellers are limited Vendor trustworthiness is compromised by

e-commerce through its anonymity, impersonality and automation

Disadvantages

Critics believe e-commerce is declining Others believe that it is evolving M-Commerce- Mobile Commerce Shopping via cell phone, PDA, Blackberry Becoming more and more frequent

Future of E-commerce