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Doing Business Using Electronic Commerce

Essay by   •  January 6, 2011  •  Research Paper  •  1,119 Words (5 Pages)  •  1,561 Views

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Doing Business Using Electronic Commerce

With the astonishing growth of the Internet, many companies are finding new and exciting ways to expand their business opportunities. There are very few successful companies that do not use computers in their everyday business activities, which mean there are few companies that do not use E-Commerce. To emphasize the point that the effect of the Internet is widespread in today's business communities, one online article stated that more than 100,000 companies have Internet addresses, and 20,000 companies have Web-sites on the Internet as of February 1999 (Data Quest, 1999). These numbers have more than quadrupled since 1995, and the trend shows no signs of slowing.

E-commerce is the exchange of business information between two or more organizations. It became very popular soon after it proved to be an efficient mean to conduct long distance transactions. Electronic commerce has developed very rapidly in the last few years. It's the broad term describing the electronic exchange of business data between two or more organizations' computers. Some examples might be the electronic filing of income tax return.

The number one advantage that E-commerce possesses is its speed. The Internet and World Wide Web give businesses opportunities to exchange messages or complete transactions almost instantaneously. Even with the slowest connections, doing business electronically is much faster than traditional modes. With increased speeds of communication, the delivery time is reduced. It makes the whole transaction from start to finish more efficient.

The second advantage of the electronic commerce is the opportunity it offers to save on costs. By using the internet, marketing, distribution, personnel, phone, postage, and printing costs, among many others, can be reduced. For example, Federal Expresses website enables customers to track their own packages with a cost to the company of $0.10 per inquiry. When live operators handle these inquiries over toll-free telephone lines, each call costs Federal Express $7. One quickly sees that offloading any telephone traffic to the website results in substantial savings.

In addition, E-commerce knows no national boundaries. We can do business all over the world. Since the internet connects everyone in cyberspace, information is transmitted at the speed of sound or the speed of light, depending on your connection. The distance becomes meaningless, which makes us able to link to anyone on the globe. Because of differences in time zones, coordinating international business negotiations can be highly inconvenient. Providing support and service 24 hours per day, seven days per week is expensive. However, Websites, unlike salespeople, are always there if we need them. Users can find the answers to their questions any day of the year and can E-mail inquiries if the Website doesn't answer to their questions.

Allowing customers to transact business at their convenience can result in increased sales. Expro that supplies parts to oil companies set a Website enabling engineers from Shell Oil on a tanker in the North Sea to immediately place orders on the Web, rather than waiting to return onshore. The engineers admit that they do, in fact, place more orders because they can place orders when they are facing the need for the product on the oil rig. (Cameron, page 21, 1999)

A potential source of trouble is customer concerns with privacy and security. Anything sent over the Internet is sent through several different computers before it reaches its destination. The concern regarding Internet security and privacy is that unwelcome hackers can capture credit card or checking account data as it is transferred or break into computers that hold such information. Security on the Internet is much like security for your home. There is a point when the effort outweighs the advantages. "Even though no one can guarantee 100% security of transferring financial information over the Internet, E-commerce is still safer than using credit cards at an actual store or restaurant, or paying for something with the use of a 1-800 number" ( Unknown author, 1999) But how do we, as consumers, how this for sure? What precautions do E-commerce websites take to avoid such problems? The answer is

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