What is e-commerce?

There exists no exact definition of e-commerce. Generally it is described as any kind of business transaction where information is exchanged electronically.

E-commerce is the buying and selling of products and services by both businesses and consumers over the Internet. Such practices have exploded over the last year as security has improved with more and more consumers now buying goods and services online. This coupled with the computer revolution of the late twentieth century has lead to e-commerce now becoming the buzzword of trade and industry as hundreds of companies are now moving online in an attempt to broaden their product range and direct contact with customers. To some people it means shopping at a website and buying products online, to other people it means just designing a web page in a way to increase the customers' interest. It does not necessarily describe a process of ordering and paying online.

Firstly we must understand why companies are being drawn towards selling their products online. An e-commerce site that is implemented well can significantly lower both order taking costs up front and also customer service after the sale has been made. For example being located on the Internet means that place does not enter into the marketing mix of an e-commerce company. As its customers will not visit the business, it means having a prominent high street location is no longer of importance; in fact a business can be set up in someone's home (if space for storage allows!). Also when considering mail order companies there is no longer the need to endure the costs of designing, printing and sending out catalogues. These factors contribute to e-commerce companies being able to offer products at greatly reduced prices as overheads have been minimised.

A company now has the ability to provide customers with a catalogue that has a far more extensive range than that of which any mail-order catalogue could provide. Recently Amazon have advertised that they currently offer more than 3 million books, to further their service they also give the customer the opportunity to read a description of every book supplied and also other titles buyers of the book have purchased. It is inconceivable to imagine all this information being provided in any catalogue that comes through the letterbox.

E-commerce is concerned with attracting new customers and therefore it involves advertising, public relations and collecting information for and about customers.

It's not enough to get an online order for a product, it's also necessary to have this product and to deliver it to the customer. So e-commerce includes, besides of interacting with customers electronically, all the things a "normal" business would also need.

Brief history of e-commerce

The history of e-commerce has continued up to the present day but is generally considered to also predate the period in which the Internet was available. Before personal computers had been introduced which could be used practically and relatively inexpensively by a wide range of consumers for Internet commerce, the history of e-commerce turned on technology which was used between different businesses which had the funds to use them, rather than between consumers and businesses. The history of e-commerce includes the aspect of OS commerce, or open source commerce, as can be used freely by an array of people. In this regard, the late 1970s saw the development, prior to anything resembling Internet commerce, of methods for businesses to process their transactions with each other using electronic means. Strictly speaking, a range of the technologically-driven innovations of the 1980s, such as ATMs, can also be considered as parts of the history of e-commerce, albeit one without the same access to computing on the part of consumers as was enjoyed by the large businesses serving them. The modern phase of e-commerce was marked by a shift to a more open source, os commerce approach, as began with the 1990 creation of a web browser for searching the World Wide Web, though Internet commerce as such only became allowable in 1991. Moreover, OS commerce of this kind only became somewhat feasible with the Internet’s burst of popularity in 1994, and Internet commerce had become fairly widespread as a business model as of 2000.