E-Commerce

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What is E-commerce? Electronic commerce (e-commerce)

– A business transaction that occurs over a computer network.

– Sometimes called e-business.

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E-commerce Basics Bricks-and-Mortars Business

– A company or business with a physical location.

Clicks-and-Mortars Business– A company or business with a physical location and an

online presence.

Online Presence Only Business– A company or business that exists online only without a

physical location.– Theoretically lower cost.– Examples: Amazon.com, E-Trade, and eBay

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E-commerce Business-to-Consumer (B2C)

– Sale of products or services from a business to the general public.

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E-commerce Consumer-to-Consumer (C2C)

– Individuals using the Internet to sell products to other individuals.

– Online auction, such as eBay

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E-commerce Business-to-Business (B2B)

– Sale and exchange of products and services between businesses.

– Many businesses engage in both B2B and B2C.

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Advantages of E-commerce• Global market 24/7• Businesses have access to 500 million people with Internet access• Customers can conduct price comparisons easily• Feedback can be immediate• Changing information can be available quickly• FAQ (frequently asked questions) pages can provide easy access

to customer support• Ability to gather customer information, analyze it, and react• New and traditional approaches to generating revenue• Manufacturers can buy and sell directly, avoiding the cost of the

middleman• Distribution costs for information reduced or eliminated• Options to create a paperless environment

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What is an electronic storefront? A Web site where an

e-retailer displays its products.

A shopping cart allows a customer to collect and purchase products.

Also called an online catalog.

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Making Money There are many different ways

to generate money online.– Sale of products and/or services– Subscriptions– Advertising

• Banners• Pop-ups

– Web Searches• Paid listings• Paid inclusion

Electronic Payment Systems Electronic Cash (e-cash or digital cash)

– Provides a private and secure method of transferring funds.• Privacy is maintained because it hides account information from the vendor.• Convenient alternative to credit cards.

– Electronic wallets (e-wallets) is software that stores billing and shipping information.

• Can transfer billing and shipping information to participating Web sites at checkout time.

• Examples: Microsoft’s Passport & eWalletXpress

– PayPal • Best known e-cash provider

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E-commerce Limitations Privacy Security Comfort Factor Technology Driven

– Cannot reach users that do not have access to computers and Internet.

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E-commerce Security Digital Certificates

– A type of electronic business card that is attached to Internet transaction data.

– Verifies the sender of the data and Web site.– Provided by Certificate Authorities

• VeriSign & eTrust

Encryption– Uses high-level mathematical functions and computer algorithms to

encode data and make it unreadable to snoopers.– Secure Sockets Layer (SSL) is a secure link between you and the

Web server that ensures all data transmitted is encrypted.• URLs that begin with https:// are using SSL.

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E-commerce Security

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Secure Sockets Layer (SSL)– Security protocol that encrypts all communications sent between your

computer and the Web server.

E-commerce Security

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Secure HTTP (S-HTTP)– An alternative to the popularly used security protocol SSL.– Not the same as HTTPS.

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