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What is E-commerce?
Electronic commerce is the ability to present, sell and collect payment for a potential product, all by using the Internet.
This kind of commerce, in its full scope, including the delivery of the product to the customer and collecting the proceeds via the network, is not appropriate for all products. If the product is of a complex nature, especially expensive and requiring personal review and examination prior to reaching the purchasing decision, or if it cannot be delivered - then the use of the Internet will be limited to its presentation and the provision of details only. In this case, the selling process will be performed in the traditional manner, through an encounter between the seller and the buyer.
However, electronic commerce offers a perfect solution for a nearly endless line of products. Millions of businesses, which operated in the traditional manner, have significantly increased their turnover simply by opening a virtual store on the Internet and selling their products concurrently with the traditional selling system that they continue to operate.
The cost of obtaining an increase in sales in this manner is usually very small.
For comparative purposes: to achieve a similar growth rate in the traditional manner, these businesses would have been required to invest high amounts in greater advertising budgets, more showroom space, additional branches, enhanced sales teams and greater inventories.
Supported by e-commerce, all that is necessary, is a minimal investment in a sales site and its storage on hosting servers. From this point on, the Internet shop is exposed and accessible to all potential buyers in Israel and around the world. There is no doubt, similarly to a conventional business, that advertising e-commerce will increase its exposure to the public and thus the number of site visitors and actual buyers.
A minimal staff of employees can handle a significant increase in orders, their referral to inventory and delivery, and the collection of the proceeds.
Existing businesses, operating in the popular manner, will use the inventory existing in the business for the Internet sales. Businesses operating on the Internet alone will store a minimal inventory in a location with inexpensive storage space or, as is the case in many instances, will sign delivery and distribution agreements with the manufacturers to directly send the products from their own inventory! This arrangement significantly reduces the costs relating to the operation of an electronic store and thus increases the profits and/or competitive capacity of the business operating on the net. Indeed, such a supply arrangement requires highly complex logistic capabilities in order to ensure accuracy, speed and reliability in supplying the products to the buyers and upholding and maintaining the seller's reputation on the net.
The collection of payment against the ordered products is performed almost exclusively by credit cars. After the buyer completed shopping for the desired products with the dedicated tools for shopping in an electronic store, the system enables payment by entering buyer data and credit card information. The security systems, currently offered over the Internet and serving the credit card users, provide a high level of security that, in most cases, exceeds the level of security the buyer can expect when using his credit card as a payment method in purchases that are not effected via the Internet.
Regarding the store operator - the method of e-commerce enables greater security in receiving payment for the sold products. The nearly exclusive use of credit cards guarantees a payment confirmation prior to performing the delivery, saving the need to cope with customers evading payment or bouncing checks. This also frees the stores from the risk of carrying cash on site and taking the cash to be deposited in the bank.
Increasing the customer base is a natural derivative of using the Internet. A regular store may enjoy regular buyers located in an area limited to the location of the store. On the other hand, a store operating on the Internet provides greater exposure and enables the population of an entire country, or even the entire world, to shop over the net.
However, there is no doubt that the field of e-commerce is also subject to competition. Opening such a "store" online is not necessarily an unconditional recipe for success. The operation of an electronic store requires imagination, creativity, efficient management and financial investments, all in order to increase the exposure, sales, product variety and quality. And above all - the financial investment is not enough: without the highest level of customer service, no business -Internet or not - will be able to last. Here, the rules of economics and commerce are similar to those applying to any other business, in any other field.
Interested in e-commerce? Want to sell over the Internet? Click here for details on the kenyon On-Line System.
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