E-commerce Basics

• E-commerce or electronic commerce works like conventional commerce with the same process of selling and purchasing goods or services for a price. The difference is that goods and services in e-commerce are bought and sold over the Internet using a credit card. Transactions can be done globally 24 hours a day and 7 days a week, unlike conventional commerce. There are no weekly holidays or closing time as with conventional stores.
  
  

The Process

• The merchant showcases the products intended to be sold on a website and specifies the price of each product. The customer logs on to the website, chooses products and adds them to a shopping cart. The customer connects to the transaction server and gives credit card details to purchase the goods. The merchant's transaction server then connects to the credit card processing server to check if the customer has the required funds to pay for the goods and services purchased.
  
  Once the processing server approves of the transaction and reports that the customer has funds, it authorizes the transfer of funds from the customer's bank to the bank of the merchant. On receipt of the money, the merchant's server confirms the sale to the customer and the products are delivered to the customer by the merchant.
  
  

E-commerce Popularity

• E-commerce became popular as a method of commerce because it is inexpensive and merchants can avoid overhead costs like commercial space, staff and security systems. The customer avoids the commute to the store and has the convenience of shopping for a variety of products at the click of a mouse. E-commerce transactions are automated and accurate, unlike conventional transactions which suffer the risk of human error. The customer can easily find products using the search option on e-commerce websites.
  
  

Choice

• Comparing prices of different brands of similar products is easy when a customer can access the prices online. The customer can shop online for services as diverse as a car wash to insurance and loans online. The Internet has many quote engines that make it easy for a customer to get a good deal on the services provided by different companies or brands. E- Commerce gives the customer a vast online catalog and the choices of available products and services available are almost infinite.
  
  

The Problems with E-commerce

• E-commerce may look easy because all it takes to set up shop is building a website and listing the products and services on sale. However, the difficult part of e-commerce is attracting customers to the website. The competition on the Internet is fiercer than in conventional commerce.
  
  

Conclusion

• E-commerce replaces conventional physical shopping with a medium that lets users view goods and services from the comfort of home with the convenience of the click of a mouse button.