At WiseGEEK, we're committed to delivering accurate, trustworthy information. Our expert-authored content is rigorously fact-checked and sourced from credible authorities. Discover how we uphold the highest standards in providing you with reliable knowledge.
An electronic commerce or ecommerce program is form of Internet commerce whereby online businesses market their goods or services on the World Wide Web. An ecommerce program can include anything from opening an online store to providing customers with banking services, investment products, or the ability to make airline and car rental bookings. Most ecommerce companies conduct their business transactions via email or on the Internet.
Ecommerce businesses generally operate in three main areas: business to customer transactions, ecommerce support services, and business to business transactions. Business to customer ecommerce programs are offered by a wide range of companies. Some businesses run virtual stores, providing their customers with the ability to purchase goods or services online. For example, a customer can browse through an online catalog and then purchase a pair of pants with his or her credit card using a secure Internet site. The pants are then mailed to the customer’s home.
Other businesses sell subscriptions that allow customers to access certain web pages. News services, magazine sites, and job bulletins are some examples of these subscription sites. In addition, some companies provide their customers with transaction-based online services. For instance, companies like banks, credit unions, or other financial institutions may allow their customers to perform a range of online services – from paying bills and managing investment portfolios to making account transfers and stock purchases.
Businesses that provide ecommerce support services sell the necessary tools for running a virtual business. For example, an ecommerce hosting company may provide ecommerce integration products, web site design services, and web server hosting. A support company may also sell ecommerce software programs that allow companies to do things like develop online shopping carts, facilitate secure credit card purchasing, or complete customer orders.
Many businesses engage in business to business (B2B) buying and selling through an ecommerce program. This type of ecommerce program is particularly useful for companies that operate on international markets because it expands their market reach. It can help reduce inventory requirements as well as streamline business processes and reduce labor requirements because many services are automated.
Deciding whether to set up an ecommerce program requires a company to evaluate its current information technology use and capacity as well as its future plans for system upgrades. A company should also determine whether some or all of its business lines are suited for ecommerce. This can be done by performing a cost and benefit analysis. A company that is adopting an ecommerce program should also take any necessary security precautions against having their sensitive data, such as customer credit card information, stolen by cyber thieves.