Disadvantages of E-Commerce
There are a lot of hard aspects about e-commerce as the recent failures in this branch show:
- making people to visit your site (getting traffic to come to your web site)
- how do you make yourself different from a (large) competition
- getting people to buy something at your site (people usually feel very uneasy about buying via Internet)
- you still need money (capital) to maintain your system and provide an effective customer support
So e-commerce does not mean that you can make profits easier than in a “normal” business. You have to manage all the activities concerned with marketing, finance, distribution, purchase and public relations.
These problems are the most relevant ones as competition grows all the time and people still try to avoid buying online. Stories about hackers using your credit card number or even large companies making losses in trying themselves in e-commerce – all this makes people even more skeptical about buying anything online.
However, these problems are also common in the old economy. So there are a few other hard aspects about e-commerce:
- legality (concerning international e-commerce companies; business contracts are defined differently by law in every country)
- ownership (the copyright problem is a very big one)
- privacy and security
Building an E-Commerce Site
First of all, you need what your:
- suppliers (this is not different from a normal company – without good suppliers and efficient ways of purchasing goods you cannot offer products)
- prices (as price comparisons are very easy on the internet, you must have more competitive prices than the competition)
- customer relations (it means communicating with your customers efficiently – via e-mail, forums, chat-rooms, etc.; try to provide as much information as possible)
- fulfillment and service (as for every other company in the “real” world you must provide quick and correct handling of the customers orders as well as an effective online-service)
will be.
Implementing an E-Commerce Site
Now you can step on to creating your site. Generally there are 3 possibilities how you can do this:
- enterprise computing(EC means that you have to purchase your own software and hardware and hire your own team of developers and supporters just to create and maintain your site – big firms which are very frequently visited by customers usually do this).
- virtual hosting services (VHS means that all the facilities required (hard- and software, security) is provided and maintained by another firm, for payment, of course. Usually it is a company specialized in providing VHS).
- simplified e-commerce (Here you just pay a company specialized in developing e-commerce systems to create simple site for you. You must already have the necessary hard- and software. The basic functions of a simplified e-commerce system include displaying a product catalogue, allowing users to browse through it and allowing them to buy items from it).
Most of the B2C e-commerce companies use one of these systems. And there are too many who just implement the simplified solution and forget about offering online customer support and help and even keeping the site up-to-date. A lack of customer support is only one of the reasons why e-commerce is in a crisis now.
Trends for the Future
The purchase rates are rising steadily. A recent study found out that most e-commerce website owners are generally optimistic. Three-quarters say their online market is expanding, while two-thirds say their ability
to attract new customers is improving. Half of those polled say they also see increased loyalty from past customers. So, as the customers get used to e-commerce, it becomes more popular. It may not replace the common way to buy and sell products but for most companies it offers new ways to reach their customers.
Read the text. Try to understand it. Define e-commerce and describe its role in making business transactions.
Data Processing
Data processing includes the many ways in which computers are used to store, manipulate, and retrieve information. Computers were originally invented as calculating devices, and calculating remains one of the computer’s primary functions.
Calculating
Common types of calculation include accounting, tabulation, and statistical analysis. Accounting is the keeping track of monetary information, such as debts and credits in business, or income taxes owed and paid in government. Tabulation is the simple summarization of numeric information, such as Census Bureau’s calculation of the population of states and cities.
Information Retrieval
Information retrieval is the use of the computer as a library. Large amounts of information may be stored in the computer and later searched for and retrieved. In general, only authorized personnel can enter or change the information, but many other people can retrieve and use the information.
A number of commercial information retrieval services are available to individuals. CompuServe, and The Source are services for world news, stock market prices, and many other types of information.
Data-Base Management
More complex than information retrieval is the maintenance of data bases. A data base is a collection of information that is not only frequently retrieved, but also changed by a number of people. A very flexible kind of data base is the relational data base, in which the information is organized into categories and stored with attributes, such as a person’s name, age, address, sex, or color of eyes. Using this information a search could be done for all persons.
Data bases are used in banking to store information about the people who have accounts in the bank and the current status of their accounts. Data bases are used in businesses to store payroll and other personnel data, to store general accounting data such as lists of creditors and debtors, to keep track of inventory, to maintain mailing lists, and to provide executives with information for making business decisions.
In business it is recognized as useful to have one large collection of all data that is maintained by a data-base management system. All transactions are handled by this program.
Word Processing
Word processing is the application of computers to improve the production of written information. This includes correspondence, memos, reports, tables of numeric figures, articles, books, etc. The computer allows one to produce written information faster and easier than with a typewriter or by hand.
The computer has advantages for a number of reasons. First, when a document is written for the first time, it is not written directly to paper. This is advantageous for two reasons: typing errors are easily corrected, and entry is faster.
The second advantage is that revision of the document is easier and faster. After the complete document is typed into memory and stored on a computer diskette, you may read it and make changes easily.
The third advantage is that the final document may be printed out very quickly on a printer connected to the microcomputer. In fact, multiple originals of the document may be printed out just as easily. As long as the document is also stored, you can later make changes.