E - COMMERCE OVERVIEW Flashcards
What is e-commerce
E-commerce: The use of electronic networks such as the internet to conduct commercial transactions, including the buying and selling of goods and services and the transmission of funds.
What does e-commerce include
Online purchases through an electronic shop front
M - commerce - commercial transactions conducted electronically by mobile phone.
S - commerce - The use of social media to sell goods and services
The transfer of funds (Electronic points of sale (EPOS)/ PayPal systems)
Electronic stock management systems
What are the benefits of E-commerce
It can increase revenues:
Increase the size of the geographical market
Easier to access to niche markets
Data collections on customers (such as purchase history) improves the effectiveness of marketing
Products can be more easily customised
24/ 7 shopfront
It can cut costs:
Better targeted advertising (i.e. through email/ pop up ads)
Lower running costs (rent/ wages)
Access to more suppliers
Economies of scale from more sales
Less waste as just in time easier to operate
Some products are ‘digitisable’ - has cut storage and distribution costs
What are the costs of e-commerce
Investment in technology
Investment in staff training - shop staff to warehousing etc
Investment in distribution (vans, or maybe postal services)
Security costs
Increased levels of competition in markets
What is the evalution of E-commerce
Overall, it reduces the barriers to entry in many markets as start - up and running costs are cheaper, making it easier for small businesses to gain a foothold in some market
However, does it lead to long - run monopolies (i.e. Amazon)
In the retail market, many online businesses selling smaller, easily transportable goods have benefited
In the service sector, there maybe less impact (hairdressers/ restaurants etc)
It has improve supply chains through stock management systems
