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Electronic Commerce

Although most commercial transactions still take place through conventional channels, rising numbers of consumers and businesses are using the Internet for electronic commerce. In 2006, total e-commerce spending by consumers and businesses surpassed $5 trillion.

There are many ways in which electronic commerce transactions can be classified. One is by looking at the nature of the participants in the electronic commerce transaction. The three major electronic commerce categories are business-to-consumer (B2C) e-commerce, business-to-business (B2B) e-commerce, and consumer-to-consumer (C2C) e-commerce.

Business-to-consumer (B2C) electronic commerce involves retailing products and services to individual shoppers. Barnes&Noble.com, which sells books, software, and music to individual consumers, is an example of B2C e-commerce.

Business-to-business (B2B) electronic commerce involves sales of goods and services among businesses. Milpro.com, Milacron Inc.’s Web site for selling cutting tools, grinding wheels, and metal working fluids to more than 100,000 small machining businesses, is an example of B2B e-commerce.

Consumer-to-consumer (C2C) electronic commerce involves consumers selling directly to consumers. For example, eBay, the giant Web auction site, allows people to sell their goods to other consumers by auctioning the merchandise off to the highest bidder.

Another way of classifying electronic commerce transactions is in terms of the participants’ physical connection to the Web. Until recently, almost all e-commerce transactions took place over wired networks. Now cell phones and other wireless handheld digital appliances are Internet enabled so that they can be used to send e-mail or access Web sites. Companies are rushing to offer new sets of Web-based products and services that can be accessed by these wireless devices. For example, in Britain, customers of Virgin Mobile can use their cell phones to browse Virgin’s Web site and purchase compact disks, wine, TV sets, and washing machines. Subscribers to Japan’s NTT DoCoMo Internet cell phone service can send and receive e-mail, tap into on-line news, purchase airplane tickets, trade stocks, and browse through restaurant guides, linking to Web sites that have been redesigned to fit on tiny screens. The use of handheld wireless devices for purchasing goods and services has been termed mobile commerce or m-commerce. Both business-to-business and business-to-consumer e-commerce transactions can take place using mobile-commerce technology.

Electronic commerce is the process of buying and selling goods electronically with computerized business transactions using the Internet or other digital network technology. It includes marketing, computer support, delivery, and payment. The three major type of electronic commerce and business-to-consumer, business-to-business, and consumer-to-consumer. Another way of classifying electronic commerce transactions is in terms of the participants’ physical connection to the Wen. Conventional e-commerce transactions, which take place over wired networks, can be distinguished from mobile commerce or m-commerce, the purchase of goods and services using the handheld wireless devices.

The Internet provides a universally available set of technologies for electronic commerce that can be used to create new channels for marketing, sales, and customer support, and to eliminate intermediaries in buy and sell transactions. Interactive capabilities on the Web can be used to build closer relationships with customers in marketing and customer support. Firms can use various Web personalization technologies to deliver Web pages with content geared to the specific interests of each user, including technologies to deliver personalized information and adds through m-commerce channels. Companies can also reduce costs and improve customer service by using Web sites to provide helpful information as well as e-mail and even telephone access to customer service representatives.

B2B e-commerce generates efficiencies by enabling companies to electronically locate suppliers, solicit bids, place orders, and track shipments in transit. Businesses can use their own Web sites to sell to other businesses or use net marketplace or private industrial networks. Net marketplaces proved a single digital marketplace base on Internet technology for many buyers and sellers. Net marketplace can be differentiated by whether they sell direct or indirect goods, support spot or long-term purchasing, or serve vertical or horizontal markets. Private industrial networks link a firm with its suppliers and other strategic business partners to develop highly efficient supply chains and to respond quickly to customer demands.