Electronic Commerce

Chapter 11 – Computers: Understanding Technology, 3rd

edition

Electronic Commerce

• Electronic commerce, or e-commerce, is the buying and selling of products and services electronically over the Internet

• Some businesses, such as Amazon.com, solely do business over the web whereas many traditional retailers (bricks-and-mortar companies) sell both at their physical locations and over the web

Types of Business to Consumer E-Commerce

• Online shopping

• Online services

• Peer-to-peer transactions

Advantages of Online Shopping

• No travel and can do at any time of the day or day of week

• More selection

• More product information available, either through the site or other sites

• Ease of comparison shopping

Shopping Agents/Bots

• At the web site of the shopping agent, you enter the name of the product and it returns the price charged by various online stores for that product, complete with links to the exact pages in online stores offering that product

• Popular ones are BizRate, DealCatcher, MySimon, and Froogle

• Such tools facilitate comparison shopping

Online services

• Online banking – electronic funds transfer reducing use of checks

• Online loans – consumer has access to a national market rather than a local one

• Investing – stock trades, research, portfolio analysis

• Online travel – travel agencies (Expedia, Travelocity, Orbitz) which

are solely online– most airlines now charge extra for paper ticket– Seat assignment and checkin via internet

Peer-to-Peer Online Transactions

• Online auctions – eBay market value is 43.6B (General Motors 20.5B) (6/25/07) – Peer-to-peer because eBay is neither buyer nor seller– Rating system to build trust in the seller

• Person-to-Person payment systems – PayPal, Google Checkout – – Seller need not have this credit card processing capability, which

is expensive for small sellers due to monthly minimums– Seller need not provide secure web site (https) nor electronic

shopping cart; both are provided by PayPal/Google Checout– Buyer supplies financial information (bank account or credit

card) to PayPal or Google Checkout and this information is never transmitted to seller (thus buyer is more comfortable)

• Digital music distribution – post-Napster