E commerce it’s pros and cons

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

1. Prepared By:
BIPLAP BHATTARAI

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. 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. 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. ONLINE SHOPPING STATS
Canadians used internet purchase goods and services valued at $15.1
billion in 2009 from $12.8 billion in 2007.

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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Risks Associated with E-Commerce
Credit Card Theft
Damaged Brand
Interruption of business

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. 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. 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. 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. 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