• Describe E-Commerce
• Identify benefits and risks of E-Commerce
• Describe E-Commerce business models
• Describe E-Commerce Security and Encryption
• Describe EDI (Electronic Data Interchange)
• Describe trends and projections for E-Commerce
• Describe issues related to E-Commerce
• Describe order and payment processing
• Describe E-Commerce solution options
The integration of communications,
data management, and security
technologies to allow individuals
and organizations to exchange
information related to the sale of
goods and services.
Major functions of E-Commerce
• the buying of goods,
• the selling of goods, and
• performance of financial transactions
on the Internet. 3
ERP, CRM, Database Customers
Internet / WWW
More Effective Data
Potentially Higher Sales
Easier Comparison Shopping
Wider Selection of Goods
Need for a robust, reliable web
Customer reluctance to
Possible Security Issues
Possible Privacy Issues
Purchasing from photos &
Possible difficulty with returns
B2C – Business-to-Consumer
B2B – Business-to-Business
C2C – Consumer-to-Consumer
B2G – Business-to-Government
EDI is the transfer of data between
different companies using networks.
This facilitates the exchange of standard
business documents including purchase
orders and invoices.
EDI is not new; it has been in existence
since the 1960s.
Organizations that exchange EDI
transmissions are called trading partners.
Newer technologies such as XML and Web
Services are replacing traditional EDI by
allowing trading partners virtually
unlimited opportunities to customize their
information exchange over the Internet.
1. Describe three advantages of e-
commerce for an entrepreneur just
starting a business.
2. Describe three risks that
businesses face when engaging in
E-Commerce Payment Models:
• Smart Card
Credit Card Order
Instant Online Storefront
• Yahoo!, Bigstep, Earthstores, FreeMerchant
Off-The-Shelf Shopping Cart Software
• Miva Merchant, Mercantec
Custom Built Solution
• IBM's WebSphere Commerce Suite, Microsoft's
• Visual Studio.NET, Macromedia Dreamweaver MX,
IBM’s WebSphere Commerce Studio
Semi-Custom Built Solutions on a Budget
E-Commerce add-ons for FrontPage and Dreamweaver
Paypal order processing 16
Free shopping cart scripts
1. List three payment models commonly used
on the Web. Which one is the most
2. Have you purchased online? If so, think of
the last item that you purchased.
1. Why did you purchase it online instead of at a
2. Did you check to see if the transaction was
secure? Why or why not?
3. How will your shopping habits be different in
3. Describe three types of e-commerce
solutions available. Which provides the
easiest entry to e-commerce? Explain.
Application Service Provider
What is ASP?
• Application Service Provider
• (not the ASP from microsoft)
• A company offers individuals or enterprises to
host their applications or services on this ASP
company. (low budgets for small companies,
outsourcing for large companies)
Mid-High Volume: Amazon
• Servelink.com, CyberSharks.net,
Dedicated line – A point-to-point, hard
wire connection between two service
Leased line – A telecommunications line
dedicated to a particular customer along
Outsourcing – The transfer of components
or large segments of an internal IT
infrastructure, staff, processes or
applications to an external resource such
as Application service provider (ASP).
Dynamic Pricing Models
B2B Service Providers
The storefront model combines transaction
processing, security, online payment
which allows merchants to sell their
products to the customers on the Web.
Many famous storefront model companies
are Business-to-Consumer (B2C)
Allow companies to conduct business 24-
by-7 (all-day, everyday).
One of the most commonly used model is
• An order-processing technology that allows
user to accumulate the shopping list and
• Supported by product catalog, merchant
server and database technology.
• www.icare.com.hk (international)
Templates for shopping carts in dreamweaver at
ecommercetemplates.com (you host solution)
Many other providers (http://www.fortune3.com)
Make your own 25
Shopping Cart SW
Sometimes will also include Product
pages –that are created from
statically entered in product
information (not stored in databases)
Comparisons of Shopping Cart SW
Search online to see what is popular
Check out wiki page
Free Shopping Cart SW
Do a search
Check out www.free-carts.com
• This does cart + product pages
• Install on a Web Server
• As part of install of SW must specify a MySQL database
and give the admin name and a password to it.
• Finish install of OpenCart SW – will include creation the
database tables to support OpenCart
• Using Interface of opencart: Setup categories of
products, product info with images, etc.
Shopping Cart Payment
Others: (search yourself)- 2checkout.com,
authorize.net, itransact, cyberbit, and more
Direct Credit Card
Another model is “online shopping
mall” which provides a wide selection
of products and services.
Customers can purchase items from
many stores in a single transaction.
• Offer speed and add convenience
Shopping Mall Example
Internet User can login to the online
auction sites, either bidder or seller.
Sellers post their items and wait for the
buyers to bid.
Auction sites get commission on every
• E.g. most profitable: www.ebay.com
• International: auction.timway.com
Reverse Auction model
• Allow buyer to set the price, www.epurchasingagent.com
Auction Model Example
Allow visitors to find everything
within the website.
• Horizontal Portal
Wide-ranged of topics
• Vertical Portal
Offer specific information on a single area of
E.g. www.webmd.com (medical information) 34
Dynamic Pricing Model
Name-your-price Business Model
• Customers choose their price for the
products or services (www.priceline.com).
Comparison Pricing Model
• Customers poll some merchants and find
the lowest prices (www.bottomdollar.com)
Demand-Sensitive Pricing Model
• Enables customers to get better services
and prices. (www.mobshop.com)
• Exchange items (www.ubarter.com)
Pricing model example
Group Pricing Model
Customers get group pricing if
enough purchase the offer
Define as buying, selling, partnering, bartering or
trading conducted between two or more business
Allow Business to buy, sell, auction, barter and
distribute products and services.
• www.ework.com (Exchange employee)
• www.itoi.com (Industry to Industry)
• www.biz2biz.com (Business to Business)
• www.icgcommerce.com, www.tradeaccess.com
B2B Service Providers
B2B service providers make the B2B
These e-Businesses help other businesses
improve their policies, procedures,
services and general operations.
Solutions include supply chain
management, logistics, procurement.
Why? To solve your E-business
problem via the Internet.
A growing segment of E-commerce.
Loan online at a lower rate than
other traditional channels.
E-loan – www.eloan.com
E-credit – www.ecredit.com
• Clients – HP, Intel, other businesses
Loan direct – www.loansdirect.com
Recruitment on the Web
Effectively job searching on the Web.
Improve the recruitment for both
employer and seeker.
Search International Jobs
Focus on computer industry
Online News Services
Web is playing an important role in the
publishing and news industries.
The Wall Street Journal (www.wsj.com)
Articles by leading investment analysts
Latest sports news (www.espn.com)
Comprehensive news site
Recruitment / News
Online Travel Services
Customers can bypass the travel
Allow discount and low fare rate
air-tickets, hostel, and car-rentals.
“Last minutes” tickets offer low price.
Multimedia rich websites provide
Audio and Video, popular music and
videos are available online for free.
Internet Movie Database
e-Learning is growing rapidly as the
number of Internet users increases.
Universities and other training
companies offer HQ distance education
over the Web.
E-books – www.xlibris.com
What is Mobile Commerce?
Mobile commerce is the term applied
to online financial transactions -
shopping or the electronic transfer of
funds - using a mobile device.
Mobile commerce transactions are
being enhanced by developments in
the world of mobile communication.
MasterCard & M-Commerce
Build an e-Commerce site
Register a Domain name
• Search for domain names (InterNIC)
• What is the criteria of selecting a good name?
Find a Web Host
• Select the suitable ISP
• Hire a web designer
• Cut cost and work with the designer
• If your site is easy to use, the customers will
stay longer and come more frequent.
It is a very important step in e-
• Good uptime?
• Good technical support?
• Fast connection to the Net?
• Staffs are knowledgeable about e-
• Compatibility with other e-Commerce
Attract and keep customers
• Banner Advertising
Recently, losing their effectiveness
• Buying and Selling advertising
You can become a host, or an advertiser
• Webcasting and Interactive Advertising
Use streaming media to broadcast
information on the web.
Enterprise Resources Planning
An industrial term defines as the activities
supported by application software that
helps company to manage the important
parts of the business.
• Product planning, parts purchasing,
maintaining inventories, contacting suppliers,
Integrated with database (such as Oracle)
to provide other features, business
process analysis, employee training, …
I have questions about billing,
product availability, shipping Finance:
and customer service. How can I help you
We’re ready to hel
All the customer services provided by the
company form the CRM.
• Call handling (in/out calls from customers and
• Sales tracking (tracing and recording the sales
• Transaction support (the technology used for
• Improve customer satisfaction and maximize
Electronic Data Interchange
Standard format to exchange
EDI message is a string of data that
represents “price”, “product number”,
“product name”, etc.
EDI message can be encrypted.
EDI is one form of E-commerce, also
include email, fax.
Electronic Data Interchange
How to you pay on the website?
• Credit card transactions
• Cybercash: www.cybercash.com
• PayPal: www.paypal.com
• Google Checkout
• E-Wallets allows you to keep track your
• Digital Cash: store your money
• More complex: B2B Transactions.
Manage the E-commerce
Have a good communication between the
business production line (including the
customer services team), and the IT
“Online transaction history log” and
“Historical investment performance
reports” also helps to decide and plan for
the product and service trend.
Migration of the traditional trading client
to the new e-business.
Secure the site
Customers fear for their online privacy.
Make sure all transactions on your e-
commerce site are protected.
Security is provided by different kind of
cryptography (encryption, digital
signatures, digital certificates)
Sometimes, you may provide your
personal information for: member-only
discounts, giveaway, sweepstakes,
Online shopping risks
A list of safeguards to keep in mind.
• Shop with trusted merchants.
• Read the site’s delivery, return, and privacy
• Only enter your details with the URL that
begins with https:// and either a locked
padlock or an unbroken key icon.
• Be careful not to hit the ORDER NOW button
more than once.
• Never send credit card information via e-mail.
• Keep a record of your transactions until
Application Service Provider
What is an Application Service
• Deliver and manage applications or
computer services via the Internet.
• Provide a cost-effective solution from an
outside supplier. (maintenance,
upgrades and customization)
• It can be a commercial entity, a not-for-
profit organization or government
ASP other names
On-demand software or software
as a service (SaaS).
A specialist or functional ASP delivers a single
application, such as credit card payment processing or
A vertical market ASP makes software for a particular
(vertical) market –i.e. medical transcriptions/records;
An enterprise ASP delivers wide set of solutions;
A local ASP delivers small business services within a
Using ASP Benefits
Speed to market
• ASP has the latest equipment, applications, ready to
provide market access.
• The customer can focus on their core business.
• ASP provides vast experience on different issues.
• Reduced fixed cost and overall expenditures.
• Customers can test a new technology with minimal
impact to their existing system.
What kind of application can be
Citrix, GraphOn and SCO
• The applications run on a central server
managed by the ASP, but not the
applications on the end-user desktop or
• Portal means a gateway (starting point),
for a WWW site, it is the starting site for
user to browse.
Shared Shared Server with Server Farm (Each
Server Application Isolation company with its
Systems own server)
Customer Cost Low Low High
Initial Low Low High
Maintainance Low Moderate Moderate
Server Compl Moderate Simple
Security Risk High Low Moderate
e-Commerce is defined as a
company has an online presence.
We have discussed different types of
Discuss the important issues on
ASP provides very good supports to
the e-Commerce development.