Defined broadly e-commerce describes how businesses are using information gathered electronically to improve their business processes and relationships with suppliers and consumers. This potentially covers all business areas, such as design, production, operations, customer service, as well as buying and selling. E-commerce can be used for communicating to customers or communicating with other businesses. What is e-commerce used for? E-commerce is being used a lot these days by people, and it is why so many companies have started up websites where the customers can purchase goods.
Companies start up the websites so that they can do business with other businesses (B2B) and with customers (B2C) Business to Business When using e-commerce it is possible for businesses to communicate to each other. The other business could be a competitor, another chain store or a supplier. Some companies that sell their product to other companies are Apache and BT Internet. This is beneficial as other businesses do not have to phone or go the retail outlet to make an order or pass on a comment.
They can do this by going to the website and e-mailing the business what products they want or any other comments they have. This is very beneficial as then it will speed up the communication process making both businesses more efficient. But the major reason for e-commerce is so that companies can communicate with their customers and allow them to purchase products from the comfort of their own home. A lot of companies these days have set-up websites allowing customers to purchase goods form home, the most successful website to do this in the U. K is Tescos.
As you can see from the table in appendix 1 they have i?? 11. 2 million from internet sales alone. Some companies have failed when it has come to making a successful website, the most famous being boo. com. So much was expected of boo. com but because of poor planning it failed. Due to this new method, websites such as smoothannice. com have to think of how they can forecast the demand. It will be extremely hard for smoothannice. com to predict the demand levels at each stage of the year, as they do not have any past sales records over the Internet as this is their first year.
Although the method they can use to find out the demand levels, is to look at other cosmetic companies that sell their products on the internet, and see when the highest and demand level is throughout the year. Another factor that the websites have to take into account is the size of their warehouses. It is essential that they have appropriate sized warehouse so that they can store a lot of the products their. If they only have a small warehouse that means they only store a little bit of stock, this would mean if there is a high demand during the year then smoothannice.com will have to take longer times to deliver the products as they would then have to order some new stock, then put it into the warehouse then deliver it.
If they had a larger warehouse then they would have sufficient amount stock to deal with the high amount of demand, and will not have to order more stock and will take less time distributing the products. Following on from the previous factor it will be essential for smoothannice. com to come up with a plan on how they are going to distribute all their products to the consumers. This is essential, it will be no good for smoothannice.
com to have ten vans distributing their products. As these ten vans will have to try getting customers their products within the limit set on the website. Also customers can be from anywhere such as one customer could be in London then the next one could be in Newcastle followed by Birmingham. It will be no good if one van has to deliver these products as it would take to long. Also what if a person from America has ordered a product how will the company get their product to them. It would be appropriate for smoothannice. com to open up warehouses in every region of the U. K.
So they have one warehouse covering the Lancashire are and another covering the Yorkshire area. This way it would be easier and more efficient to deliver the products to consumers. I also suggest that that the company sign a deal with one of the delivery companies such as DHL, FedEx or any other courier. This way if someone from abroad did order a product then their would be a good chance the product would arrive to them quickly and safely. This would give the company a very good image. Benefits and costs of e-commerce Below is a table showing the costs and benefits for any organisation to start up a website.
Benefits Costs Businesses can communicate with customers easily. The business can receive and send e-mails from/to customers. This allows customers to quickly get in contact with the business. This can also be done to suppliers is well. This means that the business will forge closer relationships with customers and suppliers. Customers feel unsafe about giving their details over the Internet. This is a big constraint as many people do feel unsafe about giving their credit card number and therefore do not bother to buy any products. E-commerce allows customers to look at the businesses products from their home.
This means that customers will be able to look or buy the product at any time rather than only when they go shopping. Also with the business being on the internet it will mean that that the business will be able to aim their will be easy to access and that more people can see their product. Some customers may not be able to access the Internet, therefore not seeing your product. It is said that trading on the Internet promises greater market penetration, increased customer response, more flexibility and lower costs. Another reason customers may not buy the product over the internet is that they wont be able to see or test out the product.
Some customers will want to see the product before they buy it, such as in other cosmetic shops such as Boots, the customers are allowed to try on the product by using testers. On the Internet this is not possible and therefore could repel customers. E-commerce is also considerably fast and means that the business will be more efficient. Saves costs, as the business does not have the costs associated with running the business. They do not have to pay for such things as lighting, electricity, and fittings. As you can see the benefits of starting up a website do outweigh the costs so this can persuade some organisations to start up websites.