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by
Matthew Martin
Companies today often have their own web site. This is often is a place to find out more about the company and what type of services it provides or goods it manufactures. E-commerce takes a different line, allowing commerce to be conducted over the Internet with individual customers (usually at their home) or other companies (B2B).
E-commerce has become a buzzword in recent years, rising in public awareness during the .com (dot com) boom of the late nineties. This became known as the dot com bubble. After a few years the bubble burst. Too much money had been poured into Internet start-up companies, many of which were over-valued or simply had no hope of being successful. Despite the bursting of the dot com bubble, there are still new ventures in e-commerce and predictions for future business over the Internet appear good, although growth rates predicted post the burst are lower.
The World Wide Web (WWW) is central to the explosion of online commerce. Web sites offering a huge range of goods and services have appeared in the last few years. The origins of the web are at the European centre for particle research, CERN, in Switzerland. An English computer Technician, Tim Berners-Lee working at CERN (http://public.web.cern.ch/public/) came up with the idea for a hyper-text system called Hyper-Text Mark-up Language (HTML) that would work over a network, through a protocol called Hyper-Text Transfer Protocol (HTTP). From having some initial ideas in the early 1980s, he came up with what we now call the web in 1989 & 1990. Others soon realised the importance of what he was developing and the centre of development soon moved to the USA, the Europeans failing to take-up the idea and carry it forward. Tim Berners-Lee has written about his work, which continues today in the USA, in his book, Weaving The Web (published by Harper Business, 1999).
Uniform Resource Locator. URLs are used to provide a human recognisable address for resources on the web. e.g. www.helpteacher.co.uk
The welcome page on a web site. Usually other pages on a web site link back to the home page, making navigation easier.
The web developer.
Hyper-Text Mark-up Language. The script language used for writing web pages, ensuring that text and graphics are correctly displayed to the user.
Hyper-Text Transfer Protocol. The network protocol that ensures that web pages can be retrieved and displayed to the user.
The software application used to navigate the web and display web pages o the user.
A software tool accessible over the web, used to locate web sites and information.
Point of initial entry for accessing the web, also providing other services (e.g. AOL).
This differs from normal “pulling”, where a user pulls down information from the web; instead a server broadcasts information directly to the user.
Transmission of data across the Internet to a selected group of users. For example lectures or pop concerts.
The table below depicts some common business models adopted for commerce on the web.
Business Model |
Description |
|
Virtual Store |
Sells goods on-line in a manner similar to a shop.
Users (customers) can view pictures and/or descriptions of the items
for sales and select them by placing them in a shopping cart (basket).
Delivery is via the mail or delivery company. e.g. www.amazon.com
|
|
Marketplace Concentrator |
These sites provide services by allowing users to
compare prices from different virtual stores. e.g. www.internetmall.com |
|
On-Line Auction House |
Like a normal auction but on-line. Customer bid for
items. e.g. www.ebay.com |
|
Information Brokers |
Provide information about products, availability
and pricing. e.g. www.travelocity.com |
|
Reverse Auction |
Customers can bid for services
and goods from various providers, opting to take the cheapest offer. e.g. www.priceline.com |
|
Transaction Brokers |
Provide on-line buying facilities for on-line traders,
buying and selling shares. e.g. www.ameritrade.com |
|
Friendship Broker |
Services are provided allowing people make contact
with each other. |
|
Content Provider |
Provide content (normally information but can be
entertainment) that customers will pay to view. Usually some pages are
free allowing for a preview. e.g. www.ft.com |
|
On-Line Service Provider |
Providing services and support on-line. e.g. www.nai.com |
|
Digital Product Delivery |
Digital products, typically software, is sold and
delivered over the Internet. e.g. www.mcafee.com |
Providing commercial services over the Internet can reduce the costs of doing business. Firstly, the cost of running retail outlets is removed (being replaced by the much lower costs of running a web site). Secondly, the distribution costs from manufacturer to shop are either removed or reduced. Manufacturers may sell directly to customers over the web.
One of the key developments are B2B links, enabling companies to trade with each other. B2B allows for the rapid exchange of information between businesses. This can increase efficiency.
There are challenges faced when attempting to start an E-commerce business.
Converting an existing business to E-commerce can be a challenge. The way in which the organisation is structured may have to be altered. This entails all the problems associated with change in an organisation: cultural values and political conflicts may make the change difficult. Staff may require re-training.
The technologies being used may not be properly tested or there may be incomplete understanding (by technical staff or more commonly managers). Much of this technology is new and how to use it correctly to make a successful business is not fully understood.
The laws of the nation states that make-up the World are limited to and by their own boarders. The Internet by its very nature is not so limited. In addition current laws are often written before the appearance of the Internet, this can give rise to difficult issues.
The security of any commercial web site is important. People must feel confident that a site is secure if they are to provide their credit card details for commercial transactions. This is also related to issues of privacy.
In many countries sites may legally be required to ensure the privacy of their customers. Care must be taken with the usage of customer data and its security.
The business models used for E-commerce are new and not fully proven. They may need to be adapted for different types of products. Great care is required if a business is changing from traditional trading to E-commerce, the two can work in very different ways. As has been proven by the bursting of the Internet bubble that developed over the mid to late nineties, there is no certainty that any E-commerce business will be successful.
by
Matthew Martin