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E commerce it’s pros and cons

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E commerce it’s pros and cons

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Commerce is a division of trade or production which deals with the exchange of goods and services from producer to final consumer
It comprises the trading of something of economic value such as goods, services, information, or money between two or more entities.
Commonly known as Electronic Marketing.
“It consist of buying and selling goods and services over an electronic systems Such as the internet and other computer networks.”
“E-commerce is the purchasing, selling and exchanging goods and services over computer networks (internet) through which transaction or terms of sale are performed Electronically.
As more and more business activates are carried out by the electronic means, it has become more and more important that evidence of these activities should available to demonstrate legal rights and obligations that flow from them.
Cyber crimes have started to create a fear in the minds of many people linked to the networks mostly worried to ecommerce technology as its success lies in the internet. The various mechanisms used for securing internet based transactions or communication can be grouped into
Authorization, Authentication and Integrity
Privacy
Availability by controlling access

Commerce is a division of trade or production which deals with the exchange of goods and services from producer to final consumer
It comprises the trading of something of economic value such as goods, services, information, or money between two or more entities.
Commonly known as Electronic Marketing.
“It consist of buying and selling goods and services over an electronic systems Such as the internet and other computer networks.”
“E-commerce is the purchasing, selling and exchanging goods and services over computer networks (internet) through which transaction or terms of sale are performed Electronically.
As more and more business activates are carried out by the electronic means, it has become more and more important that evidence of these activities should available to demonstrate legal rights and obligations that flow from them.
Cyber crimes have started to create a fear in the minds of many people linked to the networks mostly worried to ecommerce technology as its success lies in the internet. The various mechanisms used for securing internet based transactions or communication can be grouped into
Authorization, Authentication and Integrity
Privacy
Availability by controlling access

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E commerce it’s pros and cons

  1. 1. Prepared By: BIPLAP BHATTARAI
  2. 2. WHAT IS COMMERCE ?? According to Dictionary.com  Commerce is a division of trade or production which deals with the exchange of goods and services from producer to final consumer  It comprises the trading of something of economic value such as goods, services, information, or money between two or more entities.
  3. 3. WHAT IS E-COMMERCE ?? Commonly known as Electronic Marketing.  “It consist of buying and selling goods and services over an electronic systems Such as the internet and other computer networks.”  “E-commerce is the purchasing, selling and exchanging goods and services over computer networks (internet) through which transaction or terms of sale are performed Electronically.
  4. 4. BASIS FOR COMPARISON E-COMMERCE E-BUSINESS Meaning Trading of merchandise, over the internet is known as E-commerce. Running business using the internet is known as E-business. What is it? Subset Superset Is it limited to monetary transactions? Yes No What they carry out? Commercial transactions Business transactions Approach Extroverted Ambiverted Requires Website Website, CRM, ERP, etc. Which network is used? Internet Internet, Intranet and Extranet. Source: https://keydifferences.com/difference-between-e-commerce-and-e-business.html Difference Between e-commerce and e-business
  5. 5. ONLINE SHOPPING STATS Canadians used internet purchase goods and services valued at $15.1 billion in 2009 from $12.8 billion in 2007.
  6. 6. The benefits of e-commerce The global/local marketplace 24/7 trading Start-up and running costs Search facilities Pricing opportunities Gathering customer information Alternative income sources
  7. 7. a) The global marketplace E-commerce has allowed a global marketplace to develop Online businesses now have access to customers worldwide This means customers now have the opportunity to purchase products from all over the world from the comfort of their own homes
  8. 8. b) The local marketplace In contrast, traditional stores can only realistically target a local customer base, which is limited to the location of the business premises To attract customers from further afield, it needs to set up another store in that region
  9. 9. c) 24/7 trading Worldwide trading online means that there is no store needing to be staffed Trading can be carried out day or night and in different time zones around the world Unlike a traditional business, there are no closing times Because websites can be automated, no staff are required to make sales All orders and money transactions can be taken (and acknowledged) automatically
  10. 10. d) Search facilities In a traditional store, if you want to find a product, you might need to search the aisles or ask a shop assistant. Most e-commerce stores provide a search facility which: • Allows products to be found in just seconds • Is convenient no matter how many products are stored • Benefits the customer by allowing them timely retrieval of information
  11. 11. e) Pricing opportunities For ‘bricks and click’ businesses, generally there is a price difference between the traditional stores and the online store. There may be online discounts to encourage shoppers to move to that method of purchasing Online stores can also take advantage of fluid pricing which is much more difficult in traditional stores For example…
  12. 12. Fluid pricing examples For example: When selling airline tickets, as more are sold and fewer are available, the tickets could become more expensive as demand rises – this could make more profit for the business. Alternatively, when selling holidays, as the time draws closer, the prices can be reduced to ensure that all places are sold – this can benefit the business as, although they may not earn as much as desired, they are only losing a proportion of the costs. E-commerce businesses generally have more freedom with pricing as they have lower overheads than traditional businesses.
  13. 13. f) Gathering customer information Information is the cornerstone of all businesses and learning about the customers can be key to increasing profit. It is difficult to gather information about customers shopping in a traditional stores – one method is to use loyalty cards that allow the business to track purchases Online customers need to register as members to purchase products or services, This allows the business to find out a lot about their customers and tailor their services to suit As an example, when someone wants to purchase from Amazon, as soon as he/she logs in, he/she is greeted with a personalised message and a list of products he/she might like to buy based on previous purchases
  14. 14. g) Alternative income sources Once a business has an e-commerce facility, additional sources of income become available to it. For example: Pay-per-click advertising – this may navigate the customer away from the site but each click on the advert would still gain money for the business
  15. 15. Start-up and running costs (Traditional store) Setting up and maintaining a traditional store involves: • Buying or renting a location • Purchasing stock • Hiring staff • Paying utility costs (electricity, gas and water etc) • For a brand new business, these costs have to paid upfront before any profit has been made and this means that the start-up costs are high.
  16. 16. Start-up and running costs (Online store) An online store does not have such high initial costs: • Possibly no premises to purchase • Fewer staff (sometimes only one person running the whole business) • A growing e-commerce business may choose to move to larger premises and employ more staff, but usually not to the extent of a traditional business
  17. 17.  Sources: www.amazon.com and www.waterstones.com – all figures based on financial year 2005 - 2006  If there are two businesses, equal in all aspects except that one trades online and the other does not, the online business may be more successful, as it has the competitive edge by giving customers more flexibility to purchase. Amazon (online)/ Waterstones(offline) Comparison: Amazon Waterstones Purely online store More than 300 stores 12,000 full and part-time staff 4.500 booksellers Net annual sales: £4.3 billion Net annual sales: £414 million
  18. 18. Pros For Consumer Lower prices Wider selection of product Products are easy to find in categories and easy to be compared International customer access No inventory needed Shop in the comfort of your own home 24/7 business hours (12)
  19. 19. The drawbacks of e-commerce Although e-commerce is a tremendous opportunity for businesses, there are also downsides which need to be explored: • Lack of human contact • Delivery issues • International legislation • Product description problems • Security issues
  20. 20. a) Lack of human contact Some customers are deterred from purchasing online because: • they can not speak to anyone from the business • Customers find this impersonal and makes them feel unconfident • Customers also wary of buying clothes online as they cant try them on before they buy.
  21. 21. b) Delivery issues In a traditional shop, customers have the option to take purchases home immediately. When shopping online, customers have to wait until the purchases are delivered
  22. 22. c) International legislation When selling online, businesses are not just subject to legislation in the country of origin, but also to the laws in the countries where the customers live. Legislation for e-commerce is a very complex area and is still being defined. For example, in the UK you have to be 18 to buy alcohol, but in the United States you must be over 21 in all states. However, it would be quite possible for a business based in the UK to sell a case of wine over the Internet to a customer aged 18 in the United States.
  23. 23. d) Product description problems Customers worry that what is described on the e- commerce site might not accurately reflect the real product This is especially difficult for colours, as different computer systems display colours slightly differently The quality of the original picture of the product shown on their website is another factor E-commerce sites can exaggerate their descriptions of products which can actually put people off from buying online!
  24. 24. e) Security Issues Security is perhaps the biggest worry for customers Customers worry that their financial details will not be safe That the company will use them in an unauthorized way That the level of security is insufficient That their Identity could be stolen by criminals
  25. 25. Cons for Consumer Cannot feel, touch, or try on items. Shipping Costs Required credit card for security purposes Distribution of private information. (Name, Address, ect.) (13)
  26. 26. Risks Associated with E-Commerce Credit Card Theft Damaged Brand Interruption of business
  27. 27. Credit Card Theft/Fraud Sophisticated cyber criminals use bot nets to launch coordinated attacks against unsuspecting web sites that are vulnerable to attack in order to steal credit card information –credit card security is one of the most important components of e-commerce security. Some of the most common exploits used in financial data theft include: • SQL Injection • Cross-Site Scripting • Path Traversal • Session Hijacking • Malware (Drive-by downloads) Unfortunately, most sites that are vulnerable to these types of attacks don’t know it until it is too late.
  28. 28. Damaged Brand When credit cards are stolen from ecommerce sites, it usually makes the news. When a theft reaches the headlines, both existing and potential customers tend to avoid using that merchant. Even the most loyal customers think twice and may turn to a competitor if they are concerned about the security of their financial data. Theft is not the only way an attack can hurt an established brand name either. With many Internet users relying on browser add-ons that seek out and report on potentially harmful sites, if your web site is thought to be spreading malware or loaded with spam as a result of a link injection you could quite rapidly see a loss of traffic.
  29. 29. Interruption of Business It could be that a competitor is trying to hurt your business, or maybe just an attacker learning how to exploit known vulnerabilities.  Quite possibly, it could be that someone has compromised your web server so that they can use its resources: hard drive space, processing power, and bandwidth. Whatever the reason, a Denial of Service attack can hurt any business because customers cannot get to your site while you are under attack. Not only is revenue lost because your customers cannot get to your online store, but they may think twice before ever shopping their again if they know that your site is vulnerable to attack.
  30. 30. PROTECTING ECOMMERCE SITES In 2004 five different credit card security programs merged to form the Payment Card Industry Security Standards Council (PCI DSS) with the purpose of creating an extra level of protection for card issuers making sure that merchants (both online and brick and mortar) meet basic levels of security when storing, processing, and transmitting cardholder data. To set a minimum level of security, the Payment Card Industry set 12 requirements for compliance that fall into one of six groups called control objectives. The control objectives consist of: • Build and maintain a secure network • Protect cardholder data • Maintain a vulnerability management program • Implement strong access control measures • Regularly monitor and test networks • Maintain an information security policy Companies that fail to comply with the PCI DSS standards risk losing the ability to process credit card payments and may be subjected to audits and fines.
  31. 31. SUMMARY & CONCLUSION  As more and more business activates are carried out by the electronic means, it has become more and more important that evidence of these activities should available to demonstrate legal rights and obligations that flow from them.  Cyber crimes have started to create a fear in the minds of many people linked to the networks mostly worried to ecommerce technology as its success lies in the internet. The various mechanisms used for securing internet based transactions or communication can be grouped into • Authorization, Authentication and Integrity • Privacy • Availability by controlling access

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