E Commerce is the keyword of today`s business. It is Electronic commerce. What it is?It is a very broad term covers all aspects of business done through electronic media. It is trading of products or services using computer networks such as internet. E commerce uses all technologies such as mobile commerce, electronic funds transfer, supply chain management, online transaction processing, electronic data interchange (EDI),inventory management systems and automated data collection systems.
Internet has revolutionized the E commerce business model. Just imagine life before computers. Everything was a manual task . Lot of people are engaged in keeping files, documents , carbon copies etc. Bank clerks used to write entries with pen. Whenever computer gets introduced all this task started being transferred to electronic media named computer. It has made life easy to some extent but limited to very few. With the passage of time computer reached every home . The real breakthrough took place when internet got invented and being applied to real life in 1995. This is just real start of e commerce which was just crawling at the time. Industry saw the rapid growth of computer engineering since then and now you cannot imagine life without e commerce. At the instant of just one click anything can happen within microseconds like money transfer, booking of tickets ,sending e mails ,sharing photos etc. You imagine any part of life ,you will find E commerce working there.
Now we will see what it means from the online business perspective. It is simply business through internet what common man understands. In simple terms for example you can buy a thing sitting in chair with clicking your fingers on key board. You do not have to go o store physically. Instead just open the computer, visit the owners website. Choose the product ,order it with payment processor like debit card /credit card . pay pal etc Your order is reached . Now it is the responsibility of store to deliver goods at your doorstep.
There are many mega successes like amazon.com, commission junction, e bay at global level. Flip cart , snap deal etc are success examples of Indian origin. Flip cart from India has opened its wing to rise high in sky . Recently they have raised funds from European markets with very high success. Generally e commerce business offer very good discounts s on MRPs which is not the case of traditional business of buying goods from physical stores. The reason is obvious. E commerce business has to keep just stocks with advanced software to make transactions etc. They act like super stockiest. There are no other elements like dealers, sub dealers, retailers etc. There is no need to rent or own costly premises. Substantial cost saving is making this model very perfect to make higher profits. These savings are passed to customers in the form of heavy discounts. Earlier e commerce was only for books or electronic items. Today virtual store exists anything you imagine. You can order anything like food. vegetables, pizzas and literally anything you can imagine. Now the time has already arrived to make fortunes buying and selling products online. It is a blessing for emerging online businesspersons.
I will brief you various possible versions of e commerce business model in brief. Please try to understand in holistic manner. It’s a birds eye view.
1.Make your own product and sell it yourself.
2.Make your own product and find a third party to sell it and you fulfill the orders.
3.Make your own product, find a third party to sell it and you fulfill the order.
4.Make your own products, sell it yourself and third party and you fulfill the orders.
5.Buy someone else’s product, then sell it to the end customer.
6.Buy someone else`s product, then sell it to reseller (third party) with lower profit margin per product so that they can resell it for a profit.
7.Sell someone else`s product without buying it, collect the money, then have the product manufacturer manage the fulfillment. Here you typically collect a commission for the sale that is less than you would make with other options. But it is stll worth because you benefit by not having to purchase or store inventory or maintain staff to manage fulfillment. It is like a marketing person purely working on commission basis.
8.The last option is mainly known as affiliate model. It is literally a God gift to internet marketers. You have invest only for computer and learn online marketing skills. Really you can make great fortunes much beyond your widest imagination. However it is test of patience. We will learn more about in next post. Please refer my article on affiliate marketing.
9.This is all about overview of e commerce business model. Generally a question is asked how payment is processed. I have explained these details in the article on Payment processors. It is now widely accepted and established the payments through various means like debit cards, credit cards , pay pal and many more. It is always safe provided you keep your password strictly with you and change often. Generally money is taken in advance all over the world. However in Asian countries where majority stays in rural area do not have access to credit cards etc, hence there is one more provision. You just order online without paying company. The company will dispatch goods to your doorstep and collect money. Here money and goods are exchanged just like stores. This is known as Cash On Delivery. This system also gives safety feelings to buyer. There is fear in mind when you pay in advance that whether company will deliver the goods as per specification etc. This overcomes the concern of being cheated by taking money in advance and not delivering the goods.
I think we have enough discussed about E commerce as a concept. Now we will learn details of Affiliate Marketing which is simply selling others product on commission basis. Please read the relevant article on this blog carefully.