All About E-Commerce

In its simplest form e-commerce is the buying and selling of products and services by businesses and consumers over the Internet. The term "e-commerce" is used to describe encrypted payments on the Internet. These transactions most often than include real-time transfer of funds from a buyer to the seller and at other times this is handled manually through what is known as electronic fund transfer point of sale system (eft-pos) terminal once a secure order is received by the merchant.

Internet sales are increasing rapidly as consumers take advantage of lower prices offer by wholesalers retailing their products. This trend is set to strengthen as web sites address consumer security and privacy concerns.

E-commerce can be broken into four main categories: B2B, B2C, C2B, and C2C. The terms are briefly explained below:

B2B (Business-to-Business)

Companies doing business with each other such as manufacturers selling to distributors and wholesalers selling to retailers. Price is usually based on quantity of order and is negotiable.

B2C (Business-to-Consumer)

Businesses selling to the general public typically through catalogues utilising shopping cart software. The basic model is to sell the product online to consumers. B2C is the indirect trade between the company any consumers and it provides direct selling through online.

C2B (Consumer-to-Business)

In this type of e-commerce business, a consumer posts his project with a set budget online and within some hours companies reviews the consumer's requirements and bid on the project. The consumer will then review the bids and select the company that will complete the project. An example of such a company involved in this type of business is Elance.

C2C (Consumer-to-Consumer)

Some of the earliest transactions in the global economic system involve trade by barter which is a type of C2C transaction. However, C2C were virtually non-existent in recent times until the advent of e-commerce. There are many sites offering free classifieds, auctions and forums where individuals can buy and sell thanks to online payment systems like paypal, Google check-out where people can send and receive money online with ease. eBay's auction site is a great example of where people can bid or buy outright everyday 24/7 a year. There are also other auction sites like play.com and ebid.

Benefits of E-commerce

E-commerce can provide the following benefits over non-electronic commerce:

• Reduced costs - leading to reduced labour, reduced paper work, reduced errors in keying in data.
• Reduced time - there is shorter lead times for payment and return on investment in advertising, faster delivery of product.
• Flexibility and efficiency - which is the ability to handle complex situations, product ranges and customer profiles without the situation becoming unmanageable.
• Improve relationships with trading partners. There is always improved communication between trading partners lead to enhanced long-term relationships.
• Lock in customers. The closer you are to your customer and the more you work with them to change from normal business practices to best practices, the harder it is for a competitor to upset your customer relationship.
• New markets - The internet has the potential to expand business into a wider geographical locations.

In summary, anyone can start an e-commerce as you do not necessarily need a huge capital outlay to get started. Also what is more interesting is that you do not need to have the knowledge of html or be a web designed to build your online shop. There are many companies out there who can assist with building your website and even pre-load it with your preferred products, for instance online web traders and wholesale2b. What is even more important is that you can simply choose to use drop shipping service which is the idea of not holding any physical stock but just simply marketing the products of companies who are into drop shipping business. Drop shipping is the easiest and fastest way to start selling products online. In short, you basically look for a product you want to sell and create an advert to sell that product. You can sell it on eBay, Amazon, Google, Yahoo and even from your very own website. When you make a sale, you send the order on to your drop shipper, who in turn sends the product to your customer. The profit that you make is the difference in the price that you charge. I will be talking more about drop shipping at a later date.
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