E-commerce involves conducting business transactions electronically over the internet. It originated from traditional commerce through families trading goods. E-commerce is suitable for industries like books, software, and travel services that can be delivered online. It allows for 24/7 shopping convenience, increased profits through disintermediation, and a global customer base. However, e-commerce is not suitable for all businesses like perishable goods and industries requiring physical inspection. While it provides benefits like cost savings and accessibility, it also faces challenges like rapid technology changes, security concerns, and limited access for some groups.

1. Characteristics and Purpose of
eCommerce I

2. Traditional Commerce
Commerce is a negotiated exchangeCommerce is a negotiated exchange
of valuable objects or servicesof valuable objects or services
between two or more parties (abetween two or more parties (a
buyer and a seller); includes allbuyer and a seller); includes all
activities that each of the partiesactivities that each of the parties
undertakes to complete theundertakes to complete the
transaction.transaction.
Originated when families tradedOriginated when families traded
goods and services with each other.goods and services with each other.

3. E-Commerce Definition
In its broadest sense is the conductIn its broadest sense is the conduct
of selling, buying, logistics, orof selling, buying, logistics, or
other organization-managementother organization-management
activities via the Web.activities via the Web.

4. Suitable e-Commerce Businesses
Sale & purchase of books, Cd's,Sale & purchase of books, Cd's,
and Electronicsand Electronics
Online delivery of softwareOnline delivery of software
Travel ServicesTravel Services
Online Shipment TrackingOnline Shipment Tracking

5. Suitable to Combination Electronic and
Traditional Commerce Strategies
Sale & Purchase of automobiles andSale & Purchase of automobiles and
automobile partsautomobile parts
Online BankingOnline Banking
Sale & Purchase of investment andSale & Purchase of investment and
insurance productsinsurance products

6. Less Suited to Electronic Commerce
Sale/Purchase of perishables (food items, etc.)Sale/Purchase of perishables (food items, etc.)
Small denomination transactionsSmall denomination transactions
Sales of high value jewelry and antiquesSales of high value jewelry and antiques
Sale of anything that is better-suited to customerSale of anything that is better-suited to customer
"hands-on" inspection"hands-on" inspection

7. Advantages
of Electronic Commerce
1. Increased Profits through1. Increased Profits through
disintermediationdisintermediation
2. Globalization (local to international2. Globalization (local to international
customer base)customer base)
3. Convenience – 24/7 shopping from home3. Convenience – 24/7 shopping from home
4. Wide variety of products available, more4. Wide variety of products available, more
choicechoice
5. Availability of product information online5. Availability of product information online
6. Accessibility in all areas6. Accessibility in all areas

8. Advantages cont.
7. Electronic payment process such as7. Electronic payment process such as
a. Reduced government spendinga. Reduced government spending
b. Auditing of electronic payments easierb. Auditing of electronic payments easier
8. EDI (Electronic Data Interchange) adds to8. EDI (Electronic Data Interchange) adds to
business to business interactivitybusiness to business interactivity
9. Electronic delivery of goods and services (don't9. Electronic delivery of goods and services (don't
have to leave the comfort of your home!)have to leave the comfort of your home!)
10. Immediacy of the Web (24 hours 7 days a10. Immediacy of the Web (24 hours 7 days a
week!)week!)
11. Minor Government Intervention11. Minor Government Intervention
12. Online customer service--immediate response12. Online customer service--immediate response

9. Disadvantages
1. Not suitable to all businesses1. Not suitable to all businesses
2. Rapidly changing technology--costly to keep2. Rapidly changing technology--costly to keep
up!up!
3. Cultural Limitations (limited to cultural groups3. Cultural Limitations (limited to cultural groups
most likely to have online access and to be onlinemost likely to have online access and to be online
usersusers
4. Socio-Economic Limitations--(limited to those4. Socio-Economic Limitations--(limited to those
with means to have online access, credit cards,with means to have online access, credit cards,
etc)etc)

10. Disadvantages cont.
5. Legal (customer rights, state tariff5. Legal (customer rights, state tariff
restrictions and tariffs will vary due torestrictions and tariffs will vary due to
customer location and business location.customer location and business location.
6. Security of information during6. Security of information during
transactions--lack of public comfort andtransactions--lack of public comfort and
confidence in online transactions.confidence in online transactions.
7. Future increased presence of7. Future increased presence of
government control over the Internetgovernment control over the Internet
and e-Commerce!and e-Commerce!