Basic Concepts of E-Commerce

Recently I gave web site design and hosting prices to a prospective customer and also included an e-commerce package because their business could benefit. They e-mailed back to ask what e-commerce was. I think they were being honest - lots of small businesses don't know how to apply e-commerce concepts to what they do.

The retail model of e-commerce is the simplest: put up a secure order form, collect orders and credit card numbers and ship the material. While this is convenient and saves all participants time and paper work, e-commerce can be much more.

The big savings for small businesses are in relationships with suppliers and wholesale customers. There, you already have an on-going and/or contractual relationship based on good faith so that payment and credit card verification is not a key factor. Instead, you can concentrate on reducing transaction costs by making it easy for your existing supplier or customer to indicate what is required or being offered. Once the details of the proposed transaction are clear, it can be closed on line and delivered without costly bid, order and shipping documentation being sent back and forth. For suppliers, your e-commerce page should detail what you need; for customers what you offer, whether it is in stock and the cost. For both, a secure means of closing the deal is needed and a procedure for posting and processing web site e-commerce information.

For definitions on the basic concepts of e-commerce, this site has some good information. The driving force behind business-to-business e-commerce is a reduction in transaction costs but not only your own. Your business partners will find it less expensive to deal with you. In relationships with your customers, that translates as a competitive advantage and it can be a substantial one.

Go To Page: 1

Articles in this Topic    Discussions in this Topic