Introduction to E-Commerce

When people talk about electronic commerce (e-commerce or EC), most will think of it as using the Internet to help the business market and sell its products and/or services. But in reality, e-commerce is much more than that. Generally, there are 2 kinds of e-commerce; business-to-business and business-to-consumer. Here, we shall look at how a business may fit into either one kind of e-commerce.

Business-to-Business E-Commerce
The business-to-business kind of e-commerce refers to a company selling or buying from other companies. In our context here, the company communicates with the other companies by electronic means. This is actually not new, as many businesses have already been doing it since the 80’s by means of Electronic Data Interchange (EDI).

EDI - The original method
Since the '80s, organisations have been using EDI to conduct business transactions electronically. Some of these transactions include sending/receiving of orders, invoices and shipping notices. EDI is a method of extending the organisation's computing power beyond its boundaries. But the high cost and maintenance of the networks made this method out-of-reach for small and medium sized businesses. In addition, the system is somewhat inflexible, as connecting a new vendor to the network would involve huge costs and restructuring.

The Internet - The new wave
With the introduction of the Internet, companies, regardless of size, can communicate with each other electronically and cheaply. Companies that do so use it in several ways, depending on whether they are a manufacturer or supplier, although this can be confusing sometimes, as a manufacturer can also be a supplier.