Circle of E-COMMERCE

Q. Describe the types of electronic commerce.

Ans: Electronic commerce is four types.

1. Business to business (B 2 B): With B2B implementations, the parties are "Trusted Business Partners" who have an established working relationship. Business to Business e-commerce has been in use for quite a few years and is more commonly known as EDI. In the past EDI was conducted on a direct link of some form between the two businesses where as today the most popular connection is the internet. The two businesses pass information electronically to each other. B2B e-commerce currently makes up about 94% of all e-commerce transactions. Example – TPN.


2. Business to consumer (B 2 C): E-Commerce refers to the selling and buying of goods and services via the web from web retailers to web customers. This really is the same thing as B2B E-Commerce with one key exception. With B2C E-Commerce, the retailer is often selling to unknown, un-trusted strangers. Therefore extra effort must be made to capture customer and payment information. Further, this data is typically verified before orders are fulfilled. In this respect, B2C is a tougher solution to provide than B2B. However, B2C almost always involves customer typing information into an order screen; there is no need to link together two complex accounting systems. In this respect, B2B is a much tougher solution to deliver. Example – Amazon.


3. Consumer to business (C 2 B): A consumer posts his project with a set budget online and within hours companies review the consumer's requirements and bid on the project. The consumer reviews the bids and selects the company that will complete the project. Example – Priceline.


4. Consumer to consumer (C 2 C): There are many sites offering free classifieds, auctions, and forums where individuals can buy and sell thanks to online payment systems like PayPal where people can send and receive money online with ease. eBay's auction service is a great example of where person-to-person transactions take place everyday since 1995.
   

Q. Draw and explain the cycle of e-commerce.

Ans: To meet the needs of the marketplace, business design and manufacture new products, market their products, distribute them and provide customer support, generating revenue for them along the way. Customers first have to identify a need for something whether it is a physical product a service or information. Then they must look for information about the product or service find places that sell it and compare the options they have found before they actually purchase the product. Making the sale might also involve negotiating the price, quantity, terms of delivery and maybe even some legal issues. And the sales cycle doesn’t end with the delivery of the product or service, either. Customer support adds more steps while working to the benefit of both parties – customers gets what they need to keep their products performing well and suppliers learn more about market needs. Meanwhile, banks and other financial institutions handle the transfer of funds between buyers and sellers, whether they are individual consumers or large multinational corporations.

Electronic commerce is a system that includes not only those transactions that center on buying and selling goods and services to directly generated revenue, but also those transactions that support revenue generation such as generating demand for those goods and services offering sales support and customer service or facilitating communications between business partners.