Define ecommerce

Commerce is the exchange of goods (products) and services, usually but not exclusively for money. ecommerce, short for electronic commerce, is simply commerce that is transacted over electronic media.

Electronic media infers all kinds of media including television, radio, fax, and email; but increasingly, ecommerce has come to mean commerce transacted on the Web. A "transaction" typically involves three basic business processes, including:

1. Supplying potential customers with the information they need to understand the features and benefits of products and services, as well as disclosing terms for payment and servicing, and sometimes techniques to negotiate the terms.
2. Providing customers the means to actually purchase and deliver the products and/or services, which includes all the related services to the purchase, including invoice copies, payment histories, and shipment tracking.
3. Giving customers the ability to obtain support for products and services they have purchased.

Many business websites might provide information about products and services, and (or) the means to obtain support post-purchase. Sometimes, however, simply providing information and/or support falls into the currently popular term e-business, not ecommerce. Websites that do not enable buyers to actually make purchases, including the means to make payment and track fulfillment, are often not considered ecommerce sites. Why? The level of risk, need for reliability, and concomitant technical sophistication increases significantly when accepting actual payment and performing order fulfillment. So that we do not end up splitting hair, it is best to understand ebusiness with the help of examples: Email marketing to existing customers and prospects is an ebusiness activity, as it electronically conducts a business process, in this case marketing. An online system that tracks inventory and triggers alerts at specific levels is also ebusiness. Inventory management is a business process. When facilitated electronically, it becomes part of ebusiness.

If we regard ecommerce as different from ebusiness, then the only valid view we can adopt is that ecommerce is a narrower discipline. Ebusiness accounts for all business processes conducted online, while ecommerce is restricted to buying and selling. The term e-business is defined here as the use of electronic means to conduct the business of an organization internally and/or externally. Internal e-business activities include the linking of an organization's employees with each other through an intranet to improve information sharing, facilitate knowledge dissemination, and support management reporting. E-business activities also include supporting aftersales service activities and collaborating with business partners, i.e., conducting joint research, developing a new product, and formulating a sales promotion. In spite of the distinct terminology that is used, e-business should not be viewed in isolation from the remaining activities of a firm. Instead, an organization should integrate online e-business activities with its offline business into a coherent whole.

Electronic commerce, or ecommerce, is more specific than e-business and can be thought of as a subset of the latter (see Figure 2-2). Electronic commerce deals with the facilitation of transactions and selling of products and services online, i.e. via the Internet or any other telecommunications network. This involves the electronic trading of physical and digital goods, quite often encompassing all the trading steps such as online marketing, online ordering, e-payment, and, for digital goods, online distribution (i.e. for after-sales support activities). ecommerce applications with external orientation are buy-side ecommerce activities with suppliers and sell-side activities with customers.
Before delving into the basic business models of ecommerce, here is a quick history of ecommerce .

ecommerce history
In the next lesson, how ecommerce influences and changes the dynamics of business will be discussed.

The term electronic commerce came into widespread use after was developed in 1993 and freely distributed around the world. Drawn by the ease of use of the browser, millions of home consumers, businesses, and educators connected to the Internet, creating the conditions for Internet-based commerce. Businesses flocked to the Internet, attracted by the ease of setting up electronic storefronts and the potential access to a global market of Internet subscribers. Sales of goods and services to consumers, often referred to as (B2C) business-to-consumer ecommerce have grown steadily each year, despite the failure in 2000 and 2001 of so many new Internet businesses (known as dot-coms because of the domain name in their Internet address). Even more dramatic has been the extent to which businesses have adopted the Internet for supporting exchanges with other firms, such as suppliers and business customers. This is generally called business-tobusiness (B2B) ecommerce. Because of this rapid growth, ecommerce has become an important subject of study in its own right, and many schools now offer courses and degree programs focusing on it.