E-COMMERCE PROS AND CONS

One thing that you’ll discover after working in e-commerce is that there are pluses and minuses to doing business on the Web. The second discovery you will make is that there are e-commerce professionals and hopefully you will be a certified one soon and there are e-commerce con artists.

It can be said that the advantage (Pros) to doing business on the Web are a result of the hard work of e-commerce professionals. Most of the disadvantages and hazards to doing business on the web are caused and amplified by the people we are referring to as the e-commerce con artists.

PROS ADVANTAGES OF E-COMMERCE

E-commerce trends and technologies are constantly changing. Staying up to speed on the latest e-commerce standards and techniques is a constant learning experience for e-commerce professionals. For those who are willing to do the work, the web can offer the following benefits over traditional commerce.

v  INSTANT WORLDWIDE AVAILABILITY. An e-commerce web site is available globally, constantly. Only the largest businesses are able to achieve this with traditional commerce.

v  EASIER ENTRY INTO NEW MARKETS. You don’t need to physically bring your company and therefore your products into new parts of the world. As more and more people join the web community they will bring your product to themselves by visiting your web site.

v  DIRECT INTERACTION BETWEEN BUYER AND SELLER. There’s no need to contract a middlemen or find a reseller to get your goods to your buyers. Buyers can access your business directly through your web site.

v  REDUCED OVERHEAD. Opening a store in a new area can be a risky venture. This risk is minimized in an e-commerce business model, where overhead is limited to the web site and fulfillment staff and geographical coverage in a brick-and-mortar sense is not an issue.

v  REDUCED PAPERWORK. Because transactions are conducted completely electronically there is little or no need for paper.

v  NEW BUSINESS OPPORTUNITIES. As a new media for commerce and with its low start-up costs, e-commerce on the internet has the potential to inspire many innovative business models.

v  IMPROVED MARKET ANALYSIS. The community of internet users can be surveyed to determine the probable success of a potential new product.

v  IMPROVED PRODUCT ANALYSIS. The internet can be used to locate extensive information about nearly any product or class of product. Sellers and buyers on the internet have the ability to be much better informed than they are in traditional commerce.

v  AVAILABILITY OF VAST STORES OF KNOWLEDGE AND EXPERT (AS WELL AS NOT-SO-EXPERT) ADVICE. Many e-commerce sites offer reviews of products, sometimes from experts and sometimes from users often both.

CONS

E-commerce Con artists on the other hand approach commerce on the web with a gold rush mentality. Rather than taking the time to research the unique culture, concerns and rules of the internet, these get-rich-quick believers rush in assuming that internet business is the same as traditional business, only faster and with millions of dollars to be made overnight.

As an e-commerce professional, it’s your responsibility to make sure that web sites that you create are as secure as they can be and that you (and as a result your business) are a responsible internet citizen. Online businesses have to work hard to earn the trust of customers so they can gain useful information about how to better serve them. The following section explores these important e-commerce concerns and issues in more detail.

MODELS FOR E-COMMERCE

Two types of e-commerce make up nearly all the e-commerce activity on the web, business –to-consumer (B2C) and business-to-business (B2B).

Although there are naturally many more of the web who would be primarily classified as consumers (at least by businesses) the B2B e-commerce market is currently larger in terms of dollars spent. The B2B market reached an estimated $137 billion in 2000, whereas B2C reached approximately $10 billion. Let’s explore each of the two e-commerce business models in more detail.

BUSINESS-TO-CONSUMER

The B2C business model is commerce transacted between a business and a consumer. This model is characterized by high margins and low volume. This means that each individual shopper is not expected to buy more than one of any given item and is further expected to make relatively modest purchase, generally under $100. As in a traditional retail store, the margin (price markup on purchase) is high.

BUSINESS-TO-BUSINESS

B2B commerce transacted between separate businesses. It’s similar to bulk rate buying in that it’s characterized by high volume and low price margins. A business is likely to need large quantities of an item, such as desk calendar for every employee or enough paper towels to stock six rest rooms for several months. Because such customers buy in bulk and buy repeatedly a B2B company is able to offer products at a lower margin.

THE SEVEN KEYS TO E-COMMERCE SUCCESS

Creating an e-commerce site can be very simple if you have the right elements in place. However the process can also be extremely arduous if the project is not planned properly. A knowledgeable management staff with realistic expectations is key to e-commerce success.

A successful e-commerce management team must address al aspects of the project start to completion. In the effort there are seven key ingredients to e-commerce success.

1.      Generating demand.

2.      Ordering

3.      Fulfillment

4.      Payment processing

5.      Service and support

6.      Security

7.      Community

These elements are discussed in the following sections.

GENERATING DEMAND

If you expect customers to visit your site. You will need to create awareness of your products and services. There are several methods for generating awareness and demand, including Web advertising, traditional advertising and direct email.

ORDERING

After demand has been generated the true test begins. Can you turn your visitors into buyers? The ordering process on your site must be as straightforward and efficient as possible. If it’s too cumbersome a potential buyer may abandon the process midstream. Keep the forms as short and simple as possible.

FULFILLMENT

After an order has been placed stay in communication with the customer until it has been fulfilled. Immediately send an automatic email to the customer verifying the order information. In addition provide a phone number and e-mail address where the customer can reach a customer support representative to inquire about the status of the order. If applicable provide a tracking number for the package, so the customer can check with the shipping company on the status of the shipment. Ensure that the package is shipped in a timely manner and that the packaging material is sufficient to prevent damage.

PAYMENT PROCESSING

Arguably the most important part of the process us actually transferring funds from the buyer to your company. By far the most common method is via credit card, but there are other options worth trying. The more options you give a customer the more likely they are to purchase from your site.

The three models for payment processing in e-commerce on the web are; Credit card model, Cash model and Check model.

SERVICE AND SUPPORT

It’s extremely important to provide excellent customer support so you can generate trust and loyal customer base. It a customer does not know how to contact your after submitting an order, he or she will wonder whether the shipment will ever arrive. It’s essential to have clearly accessible help area on your site. Include instructions on how to use all of the features on your site---browsing products, changing account information , viewing order status , returning items, cancelling an order and so on---and provide contact e-mail and phone number information.

More advanced customer support software is also available. The Land’s End customer support area features an automatic call back request feature, a live chat feature and co-browsing capabilities. These features are powered by Cisco system Intelligent contact Management Solutions.

SECURITY

Security is a major concern for online shoppers and it should be an e-commerce company number are priority. Credit card numbers and home addresses are stolen from web site database with alarming frequency so you must do everything possible to safeguard your data from unauthorized access. Use certificates, attachments that provide proof of identification from a well known vender such as VeriSign and use SSL technology to encrypt the data sent across the internet.

COMMUNITY

One of the most important and least tangible aspects of e-commerce success is creating a sense of community at an online store. There are many books on this subject and entire courses are available to study it, still it remains an elusive goal for many sites. The most successful e-commerce sites such as Barnes and Noble (www.bn.com) have made significant efforts in the area of community building via the use of message boards, notifications e-mail, personal pages and customer.