Introduction
News flash: you can sell things over the Internet!
Ok, maybe that's not news, but companies that are not on the Internet could find their profits decreasing and customer base dwindling if they don't change their business outlook. There are thousands of businesses already doing business on the Web, and your company might be pushed aside if it doesn't take advantage of the new opportunities.
Before discussing the creation of electronic storefronts, it would be wise to have a basic understanding of E-Commerce. After all, you would never open a new office in a town that you know nothing about. Therefore, this web page presents a general overview of what Electronic Commerce is and why a business should use it.
Table of Contents
What is E-Commerce?
Whether you call it Ecom, Internet commerce, or electronic commerce, it basically means the same thing - selling or buying something electronically over the Internet. As time and technology has progressed, it has evolved into a broader meaning of using online resources and tools to do business better, more efficiently, and productively.
The Internet has spawned its own vocabulary. Emerchants. Etailing. Cybercash. Electronic Wallet. But the vocabulary of doing business is very much the same as in any business. You must understand the medium of the Internet and the diversity of the environment.
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What is a Virtual Store?
The virtual store is a storefront in cyberspace; a place where customers can shop from their home computers and where businesses can advertise and sell their products and services for a fraction of the overhead required in a physical storefront. You enter a virtual store through your web browser. You'll often see information about the company, its products on display, and colorful graphic images to give you a better idea how the product looks. When you want to purchase a product, you can usually fill out a form and transmit your financial information online. If you've ordered a product to be shipped to your house, it arrives in a matter of days. If you've chosen some information-based product, such as a news article or software application, it arrives within seconds.
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Who is the Virtual Customer?
Anyone who has access to the Web is a potential customer. The profile of the typical e-commerce customer is a 30-something white male earning $78,000 per year and living in the U.S. according to Binary Compass Enterprises. However, these demographics are evolving, and online shoppers are increasingly representative of the general population.
Business-to-business transactions are growing. For most businesses, e-commerce is not about online catalogs, ordering books, or credit cards. It's about improving relationships among suppliers, distributors, and customers.
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Different Types of Virtual Stores.
Not all stores are like Amazon.com that sell you books. Virtual stores can be divided into three different categories based on their offering: hard goods, soft goods, and services. Selling hard goods, or physical products online is similar to operating a catalog sales business. The difference is that you'll receive orders and payments over the Internet. Selling soft goods, or information-based goods are well suited for the Internet, because the entire transaction can be completed on the Web. The goods can be ordered, payments can be collected, and goods can be delivered all by computer. Selling services online is an area that could use your imagination. This could be airline reservations, stock recommendations, or your connection to the Internet by your ISP.
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Is the Virtual Store for you?
Not every company is able to generate significant profit by selling online. Some companies use their online presence to reduce costs through marketing and customer support. Others use it to generate new sales.
Firms that are most likely to profit are those offering unique products or services that are not readily available locally. For example, Only Gourmet is a web-based business that sells premium coffee, chocolate, and specialty foods. It might find new customers in small towns around the country where people can’t find Swiss bitter chocolate at the corner store.
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Benefits for your company.
As compared to opening a traditional store, opening an electronic storefront has many advantages. A company can enhance communication with customers, extend sales and marketing, enhance customer service, reduce the cost of transactions, address expectations of the customers, etc… If you’re teetering on the fence and need to be convinced to put a business on the Web, then browse the references below for added encouragement.
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Pitfalls to the seller.
Before you rush out and develop your electronic storefront, there are some warnings and words of wisdom for you. The following references describe some of the issues and provide needed advice.
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Statistics.
Total web users in 1998: 90 million
Total consumer purchases in 1998: $4.8 billion
Total business purchases in 1998: $27 billion
Anyone can manipulate statistics to prove their point, so it’s best to cut the middleman and led you to the source.
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Closing Thoughts.
With as many as 90 million users on the Web, the Internet is a fantastic place to do business. All kinds of companies in many varieties of businesses are doing business on the Web. Size does not matter. It's all about commitment to the customer.
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