In its simplest form ecommerce is the buying and selling of products and services by businesses or consumers over the World Wide Web.
People use the term "ecommerce" or "online shopping" to describe the process of searching for and selecting products in online catalogues and then "checking out" using a credit card and encrypted payment processing. Internet sales are increasing rapidly as consumers take advantage of
lower prices offered by vendors operating with less margin than a bricks and mortar store
greater convenience of having a product delivered rather than the cost of time and transport and parking of going to a store
sourcing product more cheaply from overseas vendors
great variety and inventory offered by online stores
comparison engines that compare and recommend product
auction sites, where they did for goods
Benefits of E-Commerce
E-commerce can provide the following benefits over non-electronic commerce:
Reduced costs by reducing labour, reduced paper work, reduced errors in keying in data, reduce post costs
Reduced time. Shorter lead times for payment and return on investment in advertising, faster delivery of product
Flexibility with efficiency. The ability to handle complex situations, product ranges and customer profiles without the situation becoming unmanageable.
Improve relationships with trading partners. Improved communication between trading partners leads to enhanced long-term relationships.
Lock in Customers. The closer you are to your customer and the more you work with them to change from normal business practices to best practice e-commerce the harder it is for a competitor to upset your customer relationship.
New Markets. The Internet has the potential to expand your business into wider geographical locations.
Payment Gateways
Both PayPal and Paymate offer credit card to bank account payments. Using one of these services you can invoice a customer, they can pay on Paymate and the funds will be deposited in your bank account ... less a transaction fee.
Unlike a credit card merchant facility you will not have ongoing, minimum monthly fees... and the transaction fee is better than what most card companies offer small merchants. Additional these service are being backed into other ecommerce sites and shopping carts. Ebay for example uses Paypal to process some payments.
Security
On the Internet, security is handled by passing "keys" between Internet server and client browser. When entering a secure site your browser is passed a public key by which transactions between you and the web server are encrypted. The servers key is always kept private.
On your web site security can be handled two ways - depending on your budget. You can "piggyback" on someone else's "key" or you can register and pay for your own key or SSL certificate at Thwate or Verisign.
Generally today businesses who host web sites offer access to a secure server and you can use their server and secure certificate for less than if you registered and paid for your own key.
However the person browsing your site will notice the URL change to one they do not recognise - or trust. This may put your customers off (although there is no evidence of this). Therefore one of the advantages of buying your own key would be to have a URL for your secure pages that is consistent with the rest of your site.
Presently, in Australia, Verisign may sell you a key for over $800 while foreign ecommerce providers like Instant SSL can sell it for $150. Although Verisign will argue that their key comes with a range of value add benefits, the bottom line is the product, i.e. the key, is the same.
Credit Card Security
The credit card companies are constantly evolving more secure credit card purchasing on the Internet.
Often you will be asked to give a three digit verification code on the reverse of your card. This is to prove you have the card in your hand at the time you made the purchase.
Card companies also monitor your card activity to check for suspicious or out of ordinary purchases. They will contact you to verify it is you creating the usually break in the purchasing pattern.
A range of biometric security measure have been proposed for credit cards. None are in widespread use at this time.
Smartcards house a chip that has extra data in it about the card holder or carry an public key.
To give customers confidence in purchasing on the Internet however card companies generally stand by customers who have had their card or card number stolen. This is not exactly the case for merchants though. The card company will alert the merchant to stolen cards and fraudulent transaction but do not indemnify the merchant from losses.
Finding an ecommerce Provider/Partner
Generally your web developer will advise you on the various security options. Their recommendation will consider things like
volume of sales
amount of data that needs to be captured per sale
number of products in your store
how often you need to change the product prices or other details
your special freight requirements
whether ordering has to interface with your banking/accounting system and so on
Smaller businesses generally only required a secure form that returns results to the business owner, while a larger company with multiple products and locations will require a solution that takes the order, banks the money and sends a message to outwards goods to dispatch the goods. Who you choose as an ecommerce provider is therefore very much dependent on the size of your business and the range of your products.
Banks
Banks were slow at first to embrace Internet technologies citing security fears. More recently though in the drive for higher profits and greater shareholder return they have been moving more and more of their business online.
Mostly this transition has gone smoothly. The only real difficulty is phishing scams where people are tricked into logging into a web site designed to look like their bank, but instead traps their login details. Banks have warned people not to click links in their email to login into the bank's web site, but to type the URL into their browser window every time.
Imagine a web site that would allow your customers to place an order for your goods and when they sent their order to you, your stock or inventory database was updated immediately, outwards goods were notified and the customer was sent an advice from packing staff when the goods were shipped.
Many businesses do each of these things but few join them together or "integrate" them. As businesses become familiar with the Internet, it won't take long for business people to see that their order-taking, stock control and delivery systems should be merged into one seamless function.
Indeed Microsoft Retail Manager offers precisely this function. Maintain one database in your store and synchronise it in real time with your online database... meaning your web site is constantly up to date.
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