E-Commerce E-commerce (electronic commerce) can be defined as commercial transactions of goods and services over the internet and other computer networks (Chaudhury & Kuilboer, 2002). It consists of online shopping, online banking and e-learning (Tkacz & Kapczynski, 2009). E-commerce is becoming increasingly popular since the spread of the internet.
The e-commerce users are businesses, consumers and government departments (Kessler, 2009). E-commerce is controversial but the advantages of it greatly outweigh the disadvantages.To begin with, e-commerce offers consumers speed and convenience.
E-shopping involves a web site that sells goods and/or services without the direct, face to face, contact between the vendor and the customer. This process is easy and only takes a few clicks before the client/customer has bought themself something. Compared to the traditional way of shopping, online shopping is far more convenient.
The traditional way of shopping involves driving the car to shopping centers and if the desired item is not there, then driving to further shops. After getting to the desired destination, the customer has to “fight” for parking space, walk from store to store and aisle to aisle looking for the items desired. After that process, there is a chance the queue for the checkouts are long. Then there is the issue of carrying out the merchandise. This whole shopping process can take hours (Kessler, 2009)! Many people avoid all this hassle nowadays by shopping online in the comfort of their own home. According to a study (Entrepreneur, 2003) 72% of online shoppers chose convenience over privacy.
In addition, consumers can shop without time limitation with 24 hour access at because the World Wide Web never closes. Another advantage of e-commerce is the ability to comparison shop. Comparison shopping is the act of comparing prices of something in advance before shopping for the best bargain. E-commerce allows consumers to compare prices and brands and conduct research quicker and with less effort. It also lets everyone access the global market to purchase goods and services. The internet has no geographical boundaries and allows people to browse through countless stores and compare as many products as they want (Tkacz & Kapczynski, 2009) .
E-commerce allows shoppers to obtain information about the particular product online. The World Wide Web has reviews and detailed information on almost anything (GlobalSchoolnet, 2011). There are websites such as EBay that have feedback from buyers that lets other buyers know how the product really is. These reviews and feedback are another great advantage of e-commerce because it helps protect consumers from undesirable scams and businesses online. Although e-commerce is becoming more popular, many people are still concerned with the security and privacy of it. These are a few perceived disadvantages of e-commerce. Privacy is the number one reason that non-online shoppers do not shop online (Bilstad & Enright, n.d).
Many people, especially the middle-age or elderly do not trust the privacy of the Internet and are concerned with their credit card frauds, unwanted solicitation and spam, and the use of their personal information for other purposes (Ackerman, Cranor & Reagle, 1999). Credit card fraud is one of the most common types of fraud in online shopping. Every time a credit card is used for an online purchase, there is the risk of credit card fraud. However this can be reduced by transacting on a site that is secure (Chaudhury & Kuilboer, 2002).
The other safety issue is whether a site is a legitimate and safe site to shop. To identify a secure site, look out for a small padlock icon in the lower right hand side of the page. Many online vendors use SSL Technology which is ‘Secure Sockets Layer’ and protects personal data transmissions by encrypting your private details before they are sent over the internet (Chaudhury & Kuilboer, 2002). Another disadvantage of e-commerce is the inability to physically check out the items being purchased. Therefore, the consumer has to know exactly what they are purchasing by extra research and physically going to the store and examining it first before buying online unless they are like most people who buy products without knowing exactly what it includes.
Shipping costs for the product sometimes exceed the value of the item itself and is not worth purchasing. Furthermore, many online vendors charge customers shipping costs that far exceed the true shipping rate. When purchasing internationally, currency exchange rates may leave the product you’re buying way expensive than the actual real value (Entrepreneur, 2011). E-commerce does provide consumers with redress and protection, especially major online vendors such as B2C sites like EBay for unsatisfied customers. When shopping online, less time is spent in resolving invoice and other conflict if the consumer is unhappy or displeased with the products or services There are many forms of redress available to consumers. EBay has many protection programs and software to protect buyers such as PayPal Buyer Protection, Dispute Resolution Service and the Feedback System. This portion of the paper will discuss how e-commerce impacts modern supply chains. It will explore and discuss elements of integration, collaboration, synchronization and key B2B entities described in the 2004 article, “The Strategic Importance of E-Commerce in Modern Supply Chains”, by Gibson and Edwards, from UOP EResource.
As described in the article by Gibson and Edwards, supply chain encompasses all activities associated with the flow of materials, information and services from raw materials through the product or service processing facilities and warehousing, and then to the end user. This process includes the sourcing and procuring of raw materials for assembly and production, to inventory management, order fulfillment, distribution, transportation, and finally delivery (Gibson, Edwards, 2004). Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption (Handfield, 2011). E-commerce is essential in respect to supply chains. Strategic opportunities for internet-based technology in establishing partnering relationships and collective decision making amongst supply chain personnel is extremely important.
Internet-based technology can provide mutual strategic benefits to all with enhanced customer service, reduced work in progress, faster response times and enhanced customization (Gibson, Edwards, 2004). According to this article, there can be little doubt that the most significant enabler of improved supply chain management efficiency is business-to-business (B2B) e-commerce. Of course, this is dependent on the use of the internet to integrate and synchronize supply chain activities. Internet e-commerce can remove gaps in communication and maintain a focused view on the service given and received by the final customer. The unpredictability of supply and demand and the need to stay connected with supply chain partners has made internet tools vital for competitive organizations (Gibson, Edwards, 2004). B2B tools facilitate integration and synchronization of the supply chain functions. This is accomplished through “part physical and part Internet” or by fully automating the supply chain to enable internal and external trading partners to electronically conduct business (Gibson, Edwards, 2004).
The internet revolution enabled organizations to perform more B2B supply chain processes such as a faster and more accurate flow of information to assist in better decision making, easier and faster negotiations of contracts and trade with partners and suppliers, easier order placement and fulfillment, better logistics and warehouse management, and easier financial transactions between trading partners in the supply chains (Gibson, Edwards, 2004). B2B e-commerce tools improve upon efficiencies and assists in driving supply chain to real time. As stated in the Gibson, Edwards (2004) article, B2B e-commerce has two main types of impact on supply chains. One is aggregation of suppliers and buyers and the other is the facilitation of information exchanges in businesses and relationships. Access to information through B2B applications affect the entire business of supply chain activities such as products, customers, suppliers, transportation, inventory, and processes. Key entities in B2B e-commerce are the buying and selling, trading platforms, logistic providers, network platforms, protocols of communication and back-end integration (Gibson, Edwards, 2004).
Two obvious areas of cost savings due to e-commerce are the procurement of direct or indirect materials that go into the product or service and the order to delivery. Demand can be increased due to “build to order” rather than “buying off the shelf”. Reductions in lead times due to e-commerce make this much more viable (Gibson, Edwards, 2004). Collaborative commerce is used for communication, design, planning, and basically information sharing. This can be achieved through e-commerce platforms such as email, chat rooms and online corporate data access systems. Efficient communication and integration is used to synchronize manufacturers and their supply chains (Gibson, Edwards, 2004).
Many questions still arise in relation to e-commerce and the buying and selling online. Tariffs, trade barriers and customs must be considered (Malawer, 2001). Other issues that need to be resolved are security standards and communication protocols, vendor selection and coordination, telecommunications and outsourcing issues (Gibson, Edwards, 2004). In conclusion, E-commerce has already spread through most of the supply chain world. These days a business would find it extremely hard if not impossible to survive without e-commerce.
Companies that are not interested in e-commerce can basically be forced into it because of their need to do business with the more thriving companies that utilize e-commerce business. E-commerce is very convenient and the advantages clearly outweigh the traditional way of transacting and shopping. Electronic commerce has given shopping and trading a fresh perspective because it offers consumers greater convenience, ability for consumers to comparison shop and find out more information on various products with ease.
E-commerce also protects users’ personal financial information and in most cases offers redress to consumers. E-commerce is here to stay and will continue to become more powerful and stable as users begin to explore its full potential. The tough part for a company may be the tools to integrate to e-commerce and not the actual use of this integrated way of business. ReferencesAckerman, M., Cranor, L. F., Reagle, J. (1999).
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