WHAT ARE THE COMPONENTS OF A TYPICAL E-COMMERCE TRANSACTION?
E-commerce does not refer just to a firm putting up a Web site for the reason of selling goods to buyers over the Internet. For e-commerce to be a viable substitute to conventional commercial transactions and for a firm to take full advantage of the profit of e-commerce, a number of technical as well as enabling issues have to be considered. Unusual e-commerce transaction loop involves the following key players and corresponding requisites:
The Seller should have the following mechanism:
- A corporate intranet so that orders are processed in an efficient manner; and
- IT-literate employees to handle the information flows and keep the e-commerce system.
- A commercial Web site with e-commerce capabilities (e.g., a secure transaction server);
- Transaction partners include:
- Authentication authority that serves as a trusted third party to ensure the security integrity of transactions; and
- International and National freight companies to make possible the movement of physical goods within, around and out of the country. For business-to-consumer (B2C) transactions, the system must suggest a means for cost-efficient transport of small packages (such that purchasing books over the Internet, for instance, is not prohibitively more costly than buying from a local store).
- Consumers (in a business-to-consumer transaction) who:
- Possess a mindset for purchasing goods over the Internet rather than by physically inspecting items; and
- Form a vital mass of the population with access to the Internet and disposable income enabling widespread use of credit cards.
Business/Firms (in a business-to-business transaction) that jointly form a significant group of companies (especially within supply chains) with Internet access and the ability to place and take orders over the Internet.
Government, to establish:
- A official structure governing e-commerce dealings (including electronic documents, signatures, and the like); and
- Official institutions that would put in force the official structure (i.e., laws and regulations) and keep businesses and consumers from fraud, among others.
- And lastly the Internet, the successful use of which depends on the following:
- A reliable and robust Internet infrastructure; and
- A pricing organization that doesn't punish consumers for spending time on and exchange goods over the Internet (e.g., a flat monthly charge for both ISP access and local phone calls).
For e-commerce to rise, the above factors and requisites have to be in place. The smallest amount developed factor is an obstacle to the increased uptake of e-commerce as an entire. For example, a country with an excellent Internet infrastructure will not have high e- commerce figures if banks do not recommend fulfillment and support services to e-commerce transactions. In countries that have significant e-commerce figures, a positive feedback loop reinforces each of these factors.