E-COMMERCE RESEARCH

Prepared by: awad elsayed awad ibrahim

Contents

Chapter one :overall view of e-commerce

.definitions 1.1
. terminology 1.2
. applications 1.3
. forms 1.4
. types 1.5
. operations 1.6
. history 1.7

chapter two : the way to e-commerce

.development of e-commerce website 2.1

.chapter three : advantages and disadvantages of E-commerce

. advantages of e-commerce 3.1

.drawbacks of e-commerce 3.2

Chapter four : E-commerce benefits and limitations

benefits of e-commerce 4.1

limitations of e-commerce 4.2

. references
Chapter one

Definitions of E-commerce

definitions 1.1
There does not exist a simple definition of E-Commerce that adequately
describes the coverage of its operations, functions and underlying technologies.
One common view is:

E-Commerce is online shopping via the Internet.

Although this is correct, online shopping is only one of many types of E-

Commerce activities. In broader terms:

E-Commerce is any commercial activity conducted electronically,

particularly via private or open networks, such as the Internet.

The key point of this definition is that E-Commerce is a confluence of

business operations with electronic and network technologies. Telephony
and non-networked technologies such as CD-ROM media may integrate
into operations, but the core of E-Commerce is network technologies and
especially open networks such as the Internet.

Electronic Commerce or e-commerce is the trade of products and

services by means of the Internet or other computer networks. E-
commerce follows the same basic principles as traditional commerce
that is, buyers and sellers come together to swap commodities for
money. But rather than conducting business in the traditional way in
shopping stores or through mail order catalogs and telephone operators
— in e-commerce buyers and sellers transact business over networked
computers.

eCommerce, is a shortened IT term for Electric Commerce. E-

Commerce is the conducting of business communication and
transactions over computer networks and through individual computers
linked to the Word Wide Web. also eCommerce is the buying and selling
of goods and services, and the transfer of funds, through digital
communications.

It is also true to say, however, that eCommerce also includes all inter-
company and intra-company functions (such as sales, marketing,
accounts, logistics, manufacturing, and negotiation) that enable
commerce and use electronic mail, EDI (Electronic Data Interchange),
file transfer, digital fax, video conferencing, workflow, or interaction with
a remote computer.

e-Commerce also includes buying and selling over the World-Wide Web
and the Internet, electronic funds transfer, smart cards, digital cash, and
all other methods of completing business transactions over digital
networks.

Electronic commerce, commonly known as e-commerce or eCommerce,

consists of the buying and selling of products or services over electronic
systems such as the Internet and other computer networks. The amount
of trade conducted electronically has grown extraordinarily since the
spread of the Internet. A wide variety of commerce is conducted in this
way, spurring and drawing on innovations in electronic funds transfer,
supply chain management, Internet marketing, online transaction
processing, electronic data interchange (EDI), inventory management
systems, and automated data collection systems. Modern electronic
commerce typically uses the World Wide Web at least at some point in
the transaction's lifecycle, although it can encompass a wider range of
technologies such as e-mail as well.

A large percentage of electronic commerce is conducted entirely

electronically for virtual items such as access to premium content on a
website, but most electronic commerce involves the transportation of
physical items in some way. Online retailers are sometimes known as e-
tailers and online retail is sometimes known as e-tail. Almost all big
retailers have electronic commerce presence on the World Wide Web.

Electronic commerce that is conducted between businesses is referred to

as business-to-business or B2B. B2B can be open to all interested
parties (e.g. commodity exchange) or limited to specific, pre-qualified
participants (private electronic market). Electronic commerce that is
conducted between businesses and consumers, on the other hand, is
referred to as business-to-consumer or B2C. This is the type of electronic
commerce conducted by companies such as Amazon.com.

Electronic commerce is generally considered to be the sales aspect of e-

business. It also consists of the exchange of data to facilitate the
financing and payment aspects of the business transactions.

At it's most simplistic level; eCommerce is simply the buying and selling
of goods, services or information via the World Wide Web, email or other
pathways on the Internet.

Ecommerce and Ebusiness are interchangeable terms. As with any other

industry, ecommerce has introduce new terms into our language.

__________________________________________________

1.2 terminology

The following are more widely used terminology relating to ecommerce

and their definitions :

B2B (Business to Business)

The exchange of goods and services between business.

B2C (Business to Consumer)

The exchange of goods and services with the end consumer being the
target market.

Chargeback
Where a transaction is debited against a merchant account in cases of
refunds and fraud. Chargebacks usually attract a fee that is debited
against the merchant.

Certificate Authority

A third party company that issues digital certificates that confirms a

company or individuals' identification. A digital certificate is a crucial part
of secure ecommerce

Cobranding

Where two companies identify a partnership between them through one

company displaying their logos, color schemes etc on another companies
application.

Cookies

Small text files stored on your computer when visiting a site that record
preference for that particular site's usage. Cookies are also common in
shopping cart applications in order to remember visitors as they move
throughout product pages.

CRM - Customer Relationship Management.

The entire process of a pre-sales, sales and service relationship with a

customer. Many software applications are now available that permit you
to record this relationship from the time the clients asks their first
question. Good CRM software is much more efficient than fragmented
records as it can save time in tracking communications and transactions
with a particular person.

EDI (Electronic Data Interchange)

This is the business to business (b2b) flow of information between

companies or within a company itself. The 90's saw the concept of
information equaling power. Whatever creates power also generates
money and therefore creates new enterprises to supply this information.

Encryption

Process of transforming data into a type that prevents casual observers

from deciphering.

Etailing

These are mainly "virtual" storefronts which act as a catalogue of

products of merchants and usually include a "shopping cart" system to
enable consumers to purchase online with the use of credit cards.

Firewall

Software/hardware used to prevent unauthorized access from a computer

system or network of computer systems.

Gateway

Computer that allows communications between networks one network

with another. Used in ecommerce to act as an interface between a
merchant and a bank; i.e, a Payment Gateway.

Infomediary

An infomediary is an online resources that collates data from a variety of

sources and acts as a middleman between those distributing the
information and people who want the information.

Luhn algorithm

The LUHN algorith is used for credit card number generation and
validation.

eCheck

An E-Check is a form of payment that deducts funds directly from your

own standard checking account. eCheck services are usually managed
by third party companies that interface with a number of different banks.
An echeck provides a more fraud resistant option in terms of ecommerce
transactions.

Merchant account

A special account account where money from credit card sales is first
routed to and held before transfer to your own business account. This
process is usually fully automated in ecommerce transactions. Money
may be transferred into your standard business account in real-time or
during various points in a 24 hour period. A merchant account is a crucial
part of ecommerce.

Merchant Identification Number (MIDS)

Unique merchant identification number that is used in conjunction with all

transactions.

Out of the box

Refers to an applications suitability to be rapidly integrated into an

existing system

P2P (Peer-to-Peer)

Process whereby computers can trade information between each other

directly without the assistance of a third party network.

Payment threshold

The minimum accumulated commission an affiliate must earn to trigger

payment from an affiliate program.

Privacy policy

A Web site's official statement on the type of information collected on a

site, how the information will be used, how the person can access this
data and the steps for having the data removed. A privacy statement will
also usually include information regarding systems that are in place to
protect the information of web site visitors.
Privacy seal programs

Independent organizations that verify if an online companies' Privacy

Statement is verifiable and accurate.

Scalability

The ability and flexibility of an application to meet growth requirements of

an organization

Secure servers

Special servers that utilize encryption to prevent unauthorized users from

intercepting and reading a message that passes through its system..

Session cookie

Temporary cookie stored in a computers memory for remembering

preferences during a web site visit that is flushed on leaving the site.

Shareware

Software that is distributed at no cost that can be used for free for a
specific period of time or under certain circumstances to allow evaluation.

Shopping cart

Software that keeps track of items a visitor picks to buy from your site
until they proceed to the "checkout".

SLA (Service Level Agreement)

Used in many merchant/institution and merchant/consumer transactions

to define the boundaries of what the service is committed to deliver and
under what circumstances.

SSL (Secure Socket Layer)

A secure protocol that ensures the integrity of information that is

transmitted via this means.
Uptime

The amount of time a web site is available. The industry benchmark at

this point in time for availability is 99.99%.

SOHO

Stands for Small Office/Home Office and refers to a specific group of

people who work from home or very small companies.

Turnkey

Refers to an application that with very few adjustments is ready for use,
such as a remotely hosted shopping cart service.

User session

Each visit to a web site by one person. The session is usually "ended"
when all pages have been closed or after a specific time of inactivity.

Vortals (vertical industry portals)

Online resources that are gateways to specific industry related

information.

WYSIWYG

What You See Is What You Get. An application that displays how the
resulting page will look as it is being developed by the user in which the
screen displays what the end result will look like, while the document is
being created or modified.

1.3 e-commerce applications

Some common applications related to electronic commerce are the following:

• Email
• Enterprise content management
• Instant messaging
• Newsgroups
• Online shopping and order tracking
 • Online banking
• Online office suites
• Domestic and international payment systems
• Shopping cart software
• Teleconferencing
• Electronic tickets

1.4 forms

Contemporary electronic commerce involves everything from ordering "digital"

content for immediate online consumption, to ordering conventional goods and
services, to "meta" services to facilitate other types of electronic commerce.

On the consumer level, electronic commerce is mostly conducted on the

World Wide Web. An individual can go online to purchase anything from
books or groceries, to expensive items like real estate. Another example
would be online banking, i.e. online bill payments, buying stocks, transferring
funds from one account to another, and initiating wire payment to another
country. All of these activities can be done with a few strokes of the keyboard.

On the institutional level, big corporations and financial institutions use the
internet to exchange financial data to facilitate domestic and international
business. Data integrity and security are very hot and pressing issues for
electronic commerce today.

1.5 e-commerce types

there are different types of today e-commerce such as :

1- Business to Business (B2B)

Business-to-Business e-commerce has been around for some time. Over

90% of all e-commerce transactions on the Internet are B2B. B2B
enables automating transactions between trading partners for business
efficiency. B2B is also known to be Electronic Data Interchange (EDI).
2- Business to Consumer (B2C)

Business-to-Consumer is considered to be one of the best things to

happen for e-commerce and the Internet. It continues to grow by leaps
and bounds with every passing day. Popular websites such as Amazon
and like have cashed in over the rise of purchases that happen over the
Internet. B2C involves direct selling to the consumer over the Internet.
The service or product that is being sold does not necessarily be virtual
or intangible, but as a matter of fact most transactions that happen are
related to tangible goods.

3- Consumer to Business (C2B)

Consumer-to-Business model is a complete reversal of Business-to-

Consumer model. In a Consumer-to-Business Model a consumer offers
goods or services to companies and the companies pay for them. We can
see examples of C2B in forms of affiliate marketing, answering online
polls for companies, being a free lance developer, etc.

4- Business to Employee (B2E)

In a Business-to-Employee e-commerce, companies offer products or

services to their employees in an intranet environment. B2E typically is
used for automating employee related work processes. Examples of B2E
applications can be seen in online insurance policy management for
employees, offers and rewards program for employees, etc.

5- Consumer to Consumer (C2C)

In Consumer-to-Consumer e-commerce a third party builds a transaction

bridge between two or more consumers involved. Online Auctioning can
be considered to be a good form of Consumer to Consumer e-commerce
model where consumers set up sale of goods and services for other
consumers where other consumers have to bid and win the specific good
or service. The third party which connects consumers charges a nominal
fee for their services. They are in no way related to the goods and
services being sold or bought and they are not responsible for QA and
other such factors.

1.6 operations of e-commerce

An E-Commerce operation is an integration of Internet technologies, systems,

applications and practices. It may use any technology, such as e-mail clients,
mailing lists, newsgroups, videoconferencing, IRC chat, web servers, web
channels, telephony, CD-ROM media, and Internet fax, etc. It may use any
information system, such as web sites, intranets, extranets, groupware, and
document management systems. It may incorporate any Internet application or
practice, such as communication, research, publishing, and marketing. There is
no standard configuration to build an E-Commerce operation. Each one is unique
and designed specifically for each business.

The configuration of an E-Commerce operation is determined by two dynamic

factors:

1. The company's business goals

2. The capabilities of the supportive technology

Whereas business goals are relatively stable, E-Commerce technology is

continually evolving. For this reason business goals should drive the design of
the E-Commerce operation. Like traditional commerce, successful E-Commerce
operations are fluid and adaptable to technological change. E-Commerce
operations will modify and define new applications as the technology advances,
but successful E-Commerce operations harness only the functionality of
technology that support specific business needs or help achieve predetermined
goals. It is ill-advised to design business services and goals strictly around the
capabilities of the technology because it may:

• Confound the purpose of the business

• Distract the business from its primary goals
 • Lead the business from a position of strength, effectively
executing the business it knows, to one of weakness, pioneering
new services which may require an extended learning curve to
understand and operate efficiently.

The technology should support the services. Select tools and technologies that
serve business goals. Do not define services according to the features and
functionality of the technologies.

E-Commerce includes both traditional activities like providing product

information and new activities like conducting online retail in virtual malls,
publishing digital information . Some of the common operations that define E-
Commerce are specific business-to-business and business-to-customer
interactions, such as:

Information exchange

Goods or services trading

Sales promotion and advertising

Online digital content delivery

Electronic funds transfers and transaction processing

Electronic share trading

Electronic bills of lading processing

Collaborative work interaction

Manufacturing management

Accounts settlement

Online sourcing

Public procurement

Direct consumer marketing

 Inventory management

Post-sales service

Commercial auctions.

1.7 history of e-commerce

History of ecommerce dates back to the invention of the very old notion of
“sell and buy”, electricity, cables, computers, modems, and the Internet.
Ecommerce became possible in 1991 when the Internet was opened to
commercial use. Since that date thousands of businesses have taken up
residence at web sites.

At first, the term ecommerce meant the process of execution of

commercial transactions electronically with the help of the leading
technologies such as Electronic Data Interchange (EDI) and Electronic
Funds Transfer (EFT) which gave an opportunity for users to exchange
business information and do electronic transactions. The ability to use
these technologies appeared in the late 1970s and allowed business
companies and organizations to send commercial documentation
electronically.

Although the Internet began to advance in popularity among the general public in
1994, it took approximately four years to develop the security protocols (for
example, HTTP) and DSL which allowed rapid access and a persistent
connection to the Internet. In 2000 a great number of business companies in the
United States and Western Europe represented their services in the World Wide
Web. At this time the meaning of the word ecommerce was changed. People
began to define the term ecommerce as the process of purchasing of available
goods and services over the Internet using secure connections and electronic
payment services. Although the dot-com collapse in 2000 led to unfortunate
results and many of ecommerce companies disappeared, the “brick and mortar”
retailers recognized the advantages of electronic commerce and began to add
such capabilities to their web sites (e.g., E-Commerce is not an entirely new type
of commerce. It first emerged in the 1960's on private networks, as typically
large organizations developed electronic data interchange (EDI) installations and
banks implemented electronic funds transfer (EFT). Today, however, E-
Commerce is no longer the exclusive domain of large organizations or private
networks. The open network Internet and particularly the World Wide Web not
only present new commercial potential for large organizations, but also provide a
viable entry point for small and medium-sized enterprises (SMEs) into E-
Commerce opportunities.

Even though E-Commerce has existed for over thirty years, it has just recently
sustained significant growth. In the past 5 years the Internet has transformed
from an auxiliary communication medium for academics and large organizations
into an entrenched communication medium that spans across nearly all parts of
mainstream society. E-Commerce growth is tied directly to these socio-
technological changes. The more entrenched the medium becomes, the more
users are drawn to it. An increase in users increases markets. As markets expand,
more businesses are attracted, which in turn drives the development of better,
more stable and secure technology to facilitate E-Commerce. A stable, secure
environment for exchanging mission-critical and monetary information only
draws more businesses and consumers to the Internet and ensures the growth
pattern continues. All these related factors contribute to a burgeoning E-
Commerce marketplace that should continue to grow well into the new
millennium.

Only now is it becoming apparent how large the potential for E-Commerce will
be in the next few years. With E-Commerce prospects continuing to improve,
most large corporations have already developed preliminary E-Commerce
strategies. Although many SMEs are not following this trend of large
corporations, others have found that a modest investment in a simple Web site
can develop into a commitment to E-Commerce as a major component of the
business plan. At this stage of development, E-Commerce is not an essential
operation for every type of SME, but in the near future it may become standard
for many.

Online vendors, in their turn, also get distinct advantages. The web and
its search engines provide a way to be found by customers without
expensive advertising campaign. Even small online shops can reach
global markets. Web technology also allows to track customer
preferences and to deliver individually-tailored marketing.

History of ecommerce is a history of a new, virtual world which is evolving

according to the customer advantage. It is a world which we are all
building together brick by brick, laying a secure foundation for the future
generations.

Chapter two

contents and development of e-commerce website -2

the website is the most used tool to buy and sell goods though the internet, the
website is considered the main tool of the e-commerce, so it is important for
. our research to cover the contents and development of the website

The web site

The web site should be designed to gently lead the client through the learning
and sales process. Your sales text must be grammatically sound and spelled
correctly. Poor spelling loses credibility points straight away.

Ensure that there is plenty of well laid out textual content on the site to attract
search engines as well as to inform prospective clients. Use keyword and
keyphrase rich text; that is, utilize copy that includes common phrases that
people would enter into search engines when performing a query. The copy you
use shouldn't just be informational, it needs to actively sell to the site visitor.
Learn more about crafting marketing copy and creating effective landing
pages.

What search terms are commonly used?

A useful tool in understanding how people are searching is freely available from
Google. With Google Insights for Search, you can compare search volume
patterns across specific regions, categories, and time frames on particular
keywords, finding the most popular terms for a given topic or industry sector.

Attracting search engines and targeted site traffic is a huge ongoing learning
curve, and there are plenty of other articles and tools on our site to assist you
with this. View our search engine marketing resources or our general
promotion archives.

Cross Browser Compatibility

Internet Explorer isn't the only browser on the market. There are currently over
100 different brands of Internet browser currently available. IE's major
competitor is Firefox and what looks good in Internet Explorer may look terrible
or even crash other browsers Between these two browsers, you'll have well over
90% of market covered. By paying attention to even simple things like browser
compatibility issues, you will increase your sales.

The use of images

All images used should clearly depict the product/service and where possible,
don't use stock images that come with products such as Photoshop. Seasoned
Internet surfers will recognize these as they appear on thousands of sites around
the world. Use original photography or scanned images wherever you can, or
make use of the many stock photo archives where you can purchase high
quality images for as little as a couple of dollars each.

Ensure that you optimize your images for rapid download. Much of the world
still does not utilize broadband, and no-one is going to wait around for 2 minutes
to see a photo of a "happy customer" or "successful businessperson who uses our
product". All popular graphics packages support compression for web based
graphics, usually through easy to use wizards. Try your graphics software
program's help file and search for "optimization" or "compression".

Images are a wonderful medium to assist in the online sale of your

products/services, especially useful to those clients with poor literacy levels or
who are in a rush, as we all seem to be these days. But remember, while a picture
may be worth a thousand words in the offline world, it's worth next to nothing
when it comes to search engines as spiders do not 'see' pictures.

Site Navigation.

Site navigation should be simple and all the questions a consumer may ask
should be answered along the way. Where possible, adhere to the "three click
rule" - that is, a visitor should be able to access any information regarding your
product or service within 3 clicks of any other area of your web site. Pay close
attention to cross-browser compatibility issues as many complex menu systems
play havoc with browsers.

Recommended pages.

Along with the home page, your sales pages and the shopping cart, I recommend
implementing the following web pages as part of your ecommerce site:

About Us Page.

The "About Us" page is crucial to boosting consumer confidence. It provides a

summary of the business, your commitments and direction.

While we are all protective of our privacy, online business is no different to

traditional business in that we all like to 'put a face to the name' - we need to
reassure our site visitors. When purchasing goods online, I always go to the
'About Us' or company profile pages before parting with my money (especially
after one bad experience - another story for another time). The page should also
provide other contact details for your business and your various registrations,
associations and affiliations. View further information relating to "about us" or
company profile pages.

Privacy policy.
What are you going to do with my information? - a question asked by many
online shoppers. Putting together a privacy policy doesn't necessarily require a
legal team! Learn more about developing Privacy statements.

FAQ's (Frequently asked questions)

No doubt you'll be asked many questions about your product. Many of these
questions will be repetitive. It's these questions and answers that you'll want to
add to your FAQ page. This promotes customer confidence and saves your
valuable time. A prospective client may be somewhat hesitant in asking
questions and this hesitancy may translate into a lost sale. A well constructed
FAQ will help coax these online customers into purchasing.

You don't need to spend a lot of money on a basic FAQ system. Simply list the
questions at the beginning of the FAQ in dot-point format, perhaps broken down
into various categories to make searching easier. Each of these questions should
be directly linked to the answer further down the page with the use of
bookmarks. This basic design also allows for scalability.

You can link to the FAQ not only through the main menu system, but after every
"buy me" type statement. The FAQ should be accessible within one click of any
other area of your web site that is dedicated to selling the product or service.

Testimonials page

A dollar value can not be placed upon positive client testimonials; this is some of
the best promotional copy around. Elicit feedback from your current customers
and ask their permission to publish their comments on your site.

Testimonials can be implemented on a page of their own, or interspersed

between your own statements regarding the product. If you do implement a
Testimonials page, ensure that it can be accessed with one click from any other
page on the site.
 Chapter three : advantages and disadvantages of e-commerce

:advantages 3.1

The advantages of E-commerce are basically increased sales and

decreased costs through the use of electronical media, especially the
Web. The advantages of E-commerce will be divided into the benefits it
provides to organizations, consumers, and society.

Advantages to Organizations

Due to the global reach of the Internet, businesses organizations are able
to send messages worldwide, exploring new markets and opportunities.
This breaks down geographic limitations, and reaches narrow markets
that traditional businesses have difficulties accessing. Through the
Internet, business now offer a wide range of choices and higher levels of
customer information and details for individuals to search and compare.
Some build-to-order companies such as Dell Computer Corp can even
provide a competitive advantage by inexpensive customization of
products and services.

In terms of cost reduction, E-commerce helps organizations decrease

costs in creating, processing, distributing, storing and retrieving
information. For example the communication and advertising costs could
be lower by sending e-mails and using online advertising channels, than
by using television commercials or the print media. In terms of online
ordering and online auction organizations, the costs could be lower than
running an actual shop with the associated manpower.

Extended trading hours is another benefit, the 24 hours a day. 7 days a

week in 365 days allows business always free to open on the Internet
without overtime and extra cost. Other advantages includes the up-to-
date company material, current inventories, improved customers service,
better customers communication, increased operating and trading
flexibility

Advantages to Consumers

For customers, the advantages occur in the buying process, product

research, evaluation and execution. E-commerce provides customers
with a platform to search product information through global markets with
a wider range of choices, which makes comparison and evaluation easier
and more efficient. With the ubiquity in accessing the Internet, consumers
are able to search for shops or perform other transactions anytime in
almost location. Cheaper goods and services is one of the benefits for
consumers who purchase online. Furthermore, delivery time and costs
can be saved by buyers when they purchase digital goods and services.
Examples are e-books, music and audio clips, software, games, and
distance education delivered via the Internet.

Advantages to Society

By telecommuting, individuals can nowadays work and do their

purchasing at home rather than by traveling around. This will result in
less traffic and air pollution. For people in Third World countries, many
service and products are now available which were unavailable in the
past; opportunities and higher education services are more achievable for
students. Non-profit organizations, including government services, also
benefit from E-commerce by the online payment system which supports
the payment of tax refunds and pensions quickly and securely. Public
services such as health care, education, and public social service also
benefit from E-commerce. For example, rural doctors and nurses can
access professional information and the latest health care technologies.
Overall, e-commerce makes products and services more easily available
without geographic limitations.

E-commerce offers buyers maximum convenience. They can visit the

web sites of multiple vendors round the clock a day to compare prices
and make purchases, without having to leave their homes or offices from
around the globe. In some cases, consumers can immediately obtain a
product or service, such as an electronic book, a music file, or computer
.software, by downloading it over the Internet

For sellers, e-commerce offers a way to cut costs and expand their
markets. They do not need to build, staff, or maintain a physical store or
print and distribute mail order catalogs. Automated order tracking and
billing systems cut additional labor costs, and if the product or service can
be downloaded then e-commerce firms have no distribution costs
involved. Because the products can be sold sell over the global Internet,
sellers have the potential to market their products or services globally and
are not limited by the physical location of a store. Internet technologies
also permit sellers to track the interests and preferences of their
customers with the customer’s permission and then use this information
to build an ongoing relationship with the customer by customizing
.products and services to meet the customer’s needs

: Other advantages
100% Business Uptime

E-Commerce systems are available for people for 24 hours a day, 7 days
a week and 365 days a year. They never take a break or close down for
the day or take public holidays.

Global Access

E-Commerce systems can be accessible by any one across the World

Wide Web. Any person or business having just an Internet Connection
can access e-Commerce systems.
Quick Response Time

Transactions can be handled over the Internet instantaneously without

high response times, most of the times much faster than offline systems.
Messages are delivered to the end of the globe at the snap of finger,
enabling quick commerce.

Cost Efficiency

E-Commerce is very cost efficient and economical. General costs of

running a business otherwise are far higher than that operated with the
help of technology and e-commerce. Staffing, middlemen, overhead
costs, etc can be reduced drastically making handling business handling
and administration much more easier. Most of the transaction procedures

.drawbacks of e-commerce 3.2

Delivery Time

Physical goods take some time to reach your home when you buy them
online whereas if you go to the local store and buy them, you can get
them instantly. Delivery times may range anywhere from a day to even a
month. Moreover, perishable goods cannot be considered to be shipped
for such long delivery times as they tend to get destroyed during transit.

Hesitancy

Most customers and businesses are hesitant to do transactions online.

This is due to the fact that if a person wants to feel the service or goods
he is paying for, he lacks that on the Internet. Moreover, some people are
accustomed to shop with family and friends and hang out to malls and big
outlets, which is otherwise unavailable on the Internet.
Also, according to Consumers, they are hesitant to buy some products
online. Online furniture businesses, for example, have failed for the most
part because customers want to test the comfort of an expensive item
such as a sofa before they purchase it. Many people also consider
shopping a social experience. For instance, they may enjoy going to a
store or a shopping mall with friends or family, an experience that they
cannot duplicate online. Consumers also need to be reassured that credit
card transactions are secure and that their privacy is respected.

Online Safety

Online safety is a critical factor that most people consider before even
thinking of performing commercial transactions. Customers and
businesses should be assured of privacy implications, confidentiality,
security and like factors. An amount of trust has to be developed before
starting or involving into transactions.

Other drawbacks
One of the biggest drawbacks of e-commerce is that many people may
not be satisfied with the virtual experience of trading and buying products
lying possibly thousands of miles away just by seeing its picture.
International trade, import/export and global sourcing all involve great
geographical distances spanning over continents or nations, and this lack
of physical proximity comes to the disadvantages sometimes. Secondly
the question of safety of payments and trust is also there which will be
discussed in detail in another article. For many people e-commerce is not
about big international trade, import/export or global sourcing but simply
about enjoying shopping over the net, and sometimes the electronic
experience does not satisfy their social needs or holiday lust hence they
become distanced to the concept of e-commerce. From the seller's point
of view, e-commerce does not offer a direct face to face proximity with
the probable customer and therefore things may not work out the way
they would have done otherwise. However many times international
trade, import/export and global sourcing does require personal interaction
for a couple of times before things can later be carried out via e-
commerce. Therefore in such cases, e-commerce tends to act as an
extension of the trader for carrying out activities related to international
trade, import/export and global sourcing rather than as an alternative for
it.

Many products are such that it is not possible to check them online for
their effectiveness in terms of customer satisfaction parameters. For
example if someone wants to buy a comfortable sofa set, no amount of
pictures would deliver the experience of sitting on that sofa if it were
present in a shop having physical proximity to the customer.

Chapter four :E-commerce benefits and limitations

4.1 benefits of e-commerce

In the short-term, entry into E-Commerce may offer a competitive

advantage over slower to act competitors. The market for E-Commerce is
growing, as more consumers and businesses gain Internet access and
transaction processing technologies improve security. Companies that
establish an operation today, still in the early stages of Internet based E-
Commerce, will have a fuller understanding of the issues and be better
prepared to capitalize on emerging technologies when E-Commerce
markets open up in the next few years.

The benefits of E-Commerce to a small business may include

capabilities to:

Extend the range of sales territory

Streamline communication to suppliers and clients

Expand reach to new clients

 Improve service to existing clients

Reduce paperwork and time spent on correspondence

Track customer satisfaction

Expedite billing

Improve collaboration on work projects

Expand markets beyond geographical, national boundaries

Leverage legacy data

Improve inventory control, order processing

Establish position in emerging E-Commerce marketplace

Lower costs of overhead

Realize economies of scale by increasing sales volume to new

markets

Monitor competition and industry trends

Improve or expand product lines - locate new suppliers, products that

could be included in catalogue.

The benefits to organizations are as follows:

1- Electronic commerce expands the marketplace to national

and international markets. With minimal capital outlay, a
company can easily and quickly locate more customers, the
best suppliers, and the most suitable business partners
worldwide. For example, in 1997, Boeing Corporation
reported a savings of 20 percent after a request for a proposal
to manufacture a subsystem was posted on the Internet. A
small vendor in Hungary answered the request and won the
electronic bid. Not only was the subsystem cheaper, but it
was delivered quickly.

2- Electronic commerce decreases the cost of creating,

processing, distributing, storing, and retrieving paper-based
information.

3- Ability for creating highly specialized businesses.

4- Electronic commerce allows reduced inventories and

overhead by facilitating “pull”-type supply chain
management. In a pull-type system the process starts from
customer orders and uses just-in-time manufacturing.

5- The pull-type processing enables expensive customization

of products and services, which provides competitive
advantage to its implementers.

6- Electronic commerce reduces the time between the outlay of

capital and the receipt of products and services.

7- Electronic commerce initiates business processes

reengineering projects. By changing processes, productivity
of salespeople, knowledge workers, and administrators can
increase by 100 percent or more.

8- Electronic commerce lowers telecommunications cost-the

Internet is much cheaper than VANs.

9- Other benefits include improved image, improved customer

service, newfound business partners, simplified processes,
compressed cycle and delivery time, increased productivity,
eliminating paper, expediting access to information, reduced
transportation costs, and increased flexibility.

The benefits of EC to consumers are as follows:

1- Electronic commerce enables customers to shop or do other

transactions 24 hours a day, all year round, from almost any
location.

2- Electronic commerce provides customers with more choices;

they can select Electronic commerce frequently provides
customers with less expensive products and services by
allowing them to shop in many places and conduct quick
comparisons.

3- In some cases, especially with digitized products, EC allows

quick delivery.
4- Customers can receive relevant and detailed information in
seconds, rather than days or weeks.

5- Electronic commerce makes it possible to participate in

virtual auctions.

6- Electronic commerce allows customers to interact with other

customers in electronic communities and exchange ideas as
well as compare experiences.

7- Electronic commerce facilitates competition, which results in

substantial discounts.

The benefits of EC to society are as follows:

1- Electronic commerce enables more individuals to work at

home and to do less traveling for shopping, resulting in less
traffic on the roads and lower air pollution.

2- Electronic commerce allows some merchandise to be sold at

lower prices, so less affluent people can buy more and
increase their standard of living.

3- Electronic commerce enables people in Third World

countries and rural areas to enjoy products and services that
otherwise are not available to them.

4- This includes opportunities to learn professions and earn

college degrees.

5- Electronic commerce facilitates delivery of public services,

such as health care, education, and distribution of
government social services at a reduced cost and/or improved quality.
Health-care services, for example, can reach patients in rural areas.

6- Expands markets from local to global

7-Reduces costs with telecommunications and physical maintenance

8-Minimizes resources used for storing physical receipts

9- Instant product updates, including descriptions and pricing

10- 24-hour store visibility to anyone with an Internet connection
11- Large portals enable large product bases, manufacturers and prices
12- Search utilities far surpasses the speed used to find products through
catalogs
13- Encourages competition between small and large online retailers

4.2 limitations of E-commerce

The limitations of EC can be grouped into technical and

nontechnical categories.

Technical Limitations of EC

1- There is a lack of system security, reliability, standards, and

some communication protocols.

2- There is insufficient telecommunication bandwidth.

3- The software development tools are still evolving and

changing rapidly.

4- It is difficult to integrate the Internet and EC software with

some existing applications and databases.

5- Vendors may need special Web servers and other

infrastructures, in addition to the network servers.

6- Some EC software might not fit with some hardware, or

may be incompatible with some operating systems or other
components.
As time passes, these limitations will lessen or be overcome;
appropriate planning can minimize their impact.

NonTechnical Limitations

1- Cost and justification The cost of developing EC in-house

can be very high, and mistakes due to lack of experience may
result in delays. There are many opportunities for
outsourcing, but where and how to do it is not a simple
issue. Furthermore, to justify the system one must deal with
some intangible benefits (such as improved customer service
and the value of advertisement), which are difficult to
quantify.

2- Security and privacy These issues are especially important in

the B2C area, especially security issues which are perceived to
be more serious than they really are when appropriate
encryption is used. Privacy measures are constantly improved.
Yet, the customers perceive these issues as very important,
and, the EC industry has a very long and difficult task of
convincing customers that online transactions and privacy
are, in fact, very secure.

3- Lack of trust and user resistance Customers do not trust an

unknown faceless seller (sometimes they do not trust even
known ones), paperless transactions, and electronic money.
So switching from physical to virtual stores may be difficult.

4- Other limiting factors. Lack of touch and feel online. Some

customers like to touch items such as clothes and like to
know exactly what they are buying.

5- Many legal issues are as yet unresolved, and government

regulations and standards are not refined enough for many
circumstances.

6- Electronic commerce, as a discipline, is still evolving and

changing rapidly. Many people are looking for a stable area
before they enter into it.

7- There are not enough support services. For example,

copyright clearance centers for EC transactions do not exist,
and high-quality evaluators, or qualified EC tax experts, are
rare.

8- In most applications there are not yet enough sellers and buyers for
profitable EC operations.

9- Electronic commerce could result in a breakdown of human

relationships.

10- Accessibility to the Internet is still expensive and/or

inconvenient for many potential customers. (With Web TV,
cell telephone access, kiosks, and constant media attention,
the critical mass will eventually develop.)

11-Credit Card security is a serious issue if vulnerable

12-Costs involved with bandwidth and other computer and server costs

13-Extensive database and technical knowledge and experience required

14-Customer apprehension about online Credit Card orders

15-Constantly changing technology may leave slow businesses behind

16-Some customers need instant gratification, and shipment times

interrupt that

17-Search utilities far surpasses the speed used to find products through
catalogs

18-Encourages competition between small and large online retailers

References

:websites

http://www.tamingthebeast.net/articles/ecommerce.htm
http://en.wikipedia.org

science direct database

& E-Commerce: Fundamentals and Applications England: John Wiley

Sons

Contact me : hany_hagr40@yahoo.com