E-commerce is the most important concepts of the Internet to emerge in recent years. Not only does it allow people to exchange goods and services immediately, but there are no barriers of time or distance involved in the process.



There are primarily three types of e-commerce. These include:

? Business-to-Consumer (B2C): In this process, companies focus on selling selected consumer products to an Internet-literate audience that is willing to buy online.

? Business-to-Business (B2B): This process involves interaction between businesses, either in an established supply chain or with new trading partners.

? Business-to-Administration (B2A): This category is still in the nascent stages of development, and it involves electronic interaction of the business community with public sector organizations.

E-commerce has exploded in recent years, with no end in sight to its growth rate due to several factors, such as:

? Providing value and convenience to customers by offering a product or product-line that attracts potential customers at a competitive price.

? Providing service and performance by offering a responsive, user-friendly purchasing experience.

? Providing an attractive website with a professional image.

? Providing incentives for customers to buy and to return to make additional purchases at a later date.

? Addressing concerns about reliability and security of online transactions in general.

? Streamlining business processes through re-engineering and the usage of information technology (IT).

? Allowing customers to shop at their own convenience.

However, in spite of the tremendous growth of e-commerce, there are still problems which arise from time to time that you need to be aware of, as all could impact your profit margins

Some of the most common concerns and issues are:

? Failure to understand your customers needs and why they are buying from you and not somewhere else.

? Failure to consider the complete competitive situation in your market.

? Under-estimation of time requirements for shipping and or manufacturing.

? Customer concerns about the security of their personal information.

In order to eliminate such problems, it is important for both the customer and the vendor to understand how e-commerce works. In the typical e-commerce transaction, the consumer moves through vendor's web site selecting the product/service that he/she wants to purchase.

The individual is then transferred to a secure online transaction server, where all of the customer information provided by the buyer is encrypted. Once the order is placed, the information provided moves through a private secure gateway to a processing network, where the issuing and acquiring banks complete or deny the transaction.

However, it is important to note that in order to be able to accept credit cards over the Internet, one has to apply to their respective bank for an Internet Merchant Bank Account. The entire process, starting from the customer selecting the product/service to the payment getting accepted, usually takes place in about five to seven seconds.

There are several payment systems available to accommodate the different processing needs of vendors, from those who have a few orders in a day to those who process thousands of transactions daily. Some of the common suppliers offering services to e-commerce vendors include 1AutomationWiz.com, PayPal, Yahoo!, NetSuite, Inc., etc.

The arrival of the Internet has forever changed the way people purchase goods and services and of doing business as well.

Companies are finding that in order to keep ahead of competition, they need to adapt the effectiveness of e-commerce and move their businesses forward.