E-Commerce Particularities

Developing a business over the Internet requires many of the same major activities as starting any other business. You should do some basic business planning. After all, you need a product. You may need funding to get your business going. You need customers. You need to market products to your customers. You need strong customer service. You need to manage purchases by customers, finances, staff and other resources.

But there are three main features unique to e-commerce and they offer the prospective customers a number of advantages as follows:

Convenience. E-shoppers are free to buy from on-line stores 24 hours a day. They do not even have to go anywhere ’ but simply push the button on their PC. For example, Lands’ End customers (www.landsend.com) do not have to type in the numbers of their accounts every time that they want to buy something. They do it once and from then on, the data will be securely saved in the system.

Information. Any shopper can easily get comparative information about each company, its products and services, competitors present in the market, learn the prices. Thus, Consumer World (www.consumerworld.org) offers dozens of useful links helping people make the right choice.

A lower impact. Buyers do not have to communicate with sellers face to face. Since there is no contact, they are not exposed to rational and emotional convincing. Many on-line traders emphasize this fact. For instance, Autobytel (www.autobytel.com) offers to buy a car over the Internet.

In fact, many producers experience several advantages of the Internet sale too. They can adapt to the changing market very quickly, correct the prices and improve their services in no time. Moreover, on-line marketing helps to reduce the cost of storage and insurance. Designing and supporting e-catalogues is much cheaper then printing and sending them the traditional way. What is more, suppliers have a chance to stay in touch with their consumers and get very reliable information as for the quantity of their target audience. It is also important to note that on-line marketing is available for all companies regardless of their size. The e-space is boundless, but it will take you just a couple of seconds to find and receive the information you need.

Business marketing is the moving power for the E-Commerce. The largest American corporations including Chevron, Ford Motor Company, General Electric, Merck, have spent millions of dollars on making automated corporate selling systems. As a result, the cost of money transfers fell from $100 to $20. General Electric has offered all its partners to join this system as a requirement for further cooperation. According to GE marketing specialists’ calculations this innovation is likely to save about $200 million each year.

To sell over the Internet the company needs a site ’ that is obvious. Many manufacturing enterprises design not only their main sites, but also ’micro-sites’ ’ smaller specialized Web-sites, usually used for various events and announcements. For example in order not to overload its main site, a large film studio can make a number of separate small sites with information about the new films. Many companies use micro-sites for the new products promotional campaigns, holding competitions, public relations, etc.

On the other hand, the E-Commerce faces a big number of problems: special ways of motivating for buying, informational congestion, e-security, and so on.

Today the biggest part of all e-buyers consists not of separate persons, but industrial enterprises. To attract more customers many companies, for example Priceline.com, (www.priceline.com), offer special prices. Consumers often come back on e-Bay (www.ebay.com), because they like the opportunity to take part in the auction and strike a favorable bargain.

The Internet offers users millions of Web-sites and an unimaginable space of information. Many of the new sites stay unnoticed. There is a general rule that opening the site must not take over 8 seconds. Otherwise the Internet-cruiser leaves for another Web-node.

Many Internet users fear that certain technically advanced frauders can find a way to use their credit card numbers. On the other hand, the e-traders are worried about the fact that some users get into their computer systems for electronic diversion. The Internet takes measures to counteract unauthorized break-in, but this process resembles an eternal struggle between the new protective systems and the new methods to hack them. The Lending Tree site (www.lendingtree.com) offers financial service to its customers: obtaining marketable investments, paper holdings, credit cards, etc. To make people trust that its transactions are totally secured placed Verisign name flag on the screen thus saying that this company is in charge for the security.

E-Commerce introduces fundamental changes into all the spheres of the Economy every single day. The opportunity to place a direct customer order represents a serous threat to many companies including travel agencies, commission houses, insurance agents, car dealers, bookstores and many others. Most of their functions will soon be substituted by on-line services. At the same time business, intermediary model will be reorganized. The number of on-line brokers is likely to grow rapidly in the nearest future.

Many market researchers believe that the Internet contributes to a wide emergence of small business and medium-size companies in the market. They predict that the large companies’ advantages will go on reducing in the future, while the world advertising expenses are predicted to fall. All these factors will provide the best circumstances for smaller businesses that specialize in a thin segment of the market. Due to this, they will get a perfect chance to enter the international market.