CHAPTER - 1

INTRODUCTION

e - COMMERCE

In its simplest sense,”commerce”is an act of trade between two

parties:

1) where the exchange is negotiated under a set of mutually

acceptable conditions, so that both parties emerge satisfied
with the result

2) where the exchange may depend in whether the two parties are
prepared to trust one another

More complex transactions such as share dealings need to be

supported by rules, procedures and fail-safe mechanisms, which
provide trading partners with assurance and recovery methods when
trust breaks down.

Adding an “e” to commerce introduce another layer of complexity by

transferring all the interactions , rules, procedures and fail-safes
into a virtual word. On the internet the provision of trust becomes
the keystones of any successful trading model because without trust,
no-one will trade.

TYPES OF e - COMMERCE

The e-commerce (electronic commerce) is way to carry out business

or financial transactions or deals over internet. Internet is a fast
way to communicate with consumers or other business parties. This
trend of online transactions is becoming popular now days. This is
used to make deals and even payments online. Different web sites
are there, where any body can make order and buy the products.

There are different types of e-commerce which are mostly used.

These types can be described as:

1. Business-to-consumer

2. Consumer-to-consumer

3.Business-to-business
The business-to-consumer (B2C) e-commerce is used by business
entities to sell the products and services to the general people or
end users. The user can visit the website to see different products
available and can make orders.

The consumer-to-consumer or C2C e-commerce is also a common

type.
The type of commerce is mostly used in online auctions , where
someone (not any business entity) display his/her items to sell and
some one who want to purchase these item offers bids online. In the
third type of e-commerce that is business-to-business or B2B, two
business parties deals with each other.

CHANGES BROUGHT BY e - COMMERCE

No doubt, e-commerce is changing our daily lives. These changes

occur along 3 different directions as illustrated by the afore
mentioned scenarios. In the first scenario, e-commerce provides an
alternative solution. Even if we do not have cyber shops, we can
still make the purchase from physical shops. That means, cyber
shops are alternatives to physical shops. While cybercaffing can be
more convenient, some people may still want to at physical stores
because of physical shopping experience. In the second scenario,
e-commerce provides a better solution. For instance, the benefits
brought by on-line auctions cannot be realized by the traditional
classified advertisement and the on-line auction is therefore a better
way to solve the same problem. In the third scenario, e- commerce is
bringing in a new form of an already existing services. In the
traditional newspaper business, obviously it is not cost effective to
print a different newspaper for every one, so mass production is
inevitable. However, with e-commerce, mass customization becomes
possible at almost no extra cost. The final scenario illustrates that
e-commerce is changing our business logic from a supply-driven
model to a demand-driven model.

ADVANTAGES OF e - COMMERCE

e-commerce provides many new ways for businesses and consumers

to communicate and conduct business. There are a number of
advantages and disadvantages of conducting business in this manner.

Some advantages that can be achieved from e-commerce include:

1) Being able to conduct business 24 x 7 x 365 - e-commerce

systems can operate all day every day. Your physical
 storefront does not need to be open in order for customers and
suppliers to be doing business with you electronically.

2) Access the global marketplace -The Internet spans the world,

and it is possible to do business with any business or person
who is connected to the Internet. Simple local businesses such
as specialist record stores are able to market and sell their
offerings internationally using e-commerce. This global
opportunity is assisted by the fact that, unlike traditional
communications methods, users are not charged according to
the distance over which they are communicating.

3) Speed - Electronic communications allow messages to traverse

the world almost instantaneously. There is no need to wait
weeks for a catalogue to arrive by post: that communications
delay is not a part of the Internet / e-commerce world.
4) Market space - The market in which web-based businesses
operate is the global market. It may not be evident to them,
but many businesses are already facing international
competition from web-enabled businesses.

5) Opportunity to reduce costs - The Internet makes it very easy

to 'shop around' for products and services that may be cheaper
or more effective than we might otherwise settle for. It is
sometimes possible to, through some online research, identify
original manufacturers for some goods - thereby bypassing
wholesalers and achieving a cheaper price.

6) Computer platform-independent-'Many, if not most,

computers have the ability to communicate via the Internet
independent of operating systems and hardware.Customers are
not limited by existing hardware systems (Gascoyne &
Ozcubukcu, 1997-87).

7) Efficient applications development environment-In many

respects, applications can be more efficiently developed and
distributed because the can be built without regard to the
customer's or the business partner's technology platform.
Application updates do not have to be manually installed on
computers. Rather, Internet-related technologies provide this
capability inherently through automatic deployment of
software updates(Gascoyne & Ozcubukcu, 1997-87).

8) Allowing customer self service and customer outsourcing-

People can interact with businesses at any hour of the day that
it is convenient to them, and because these interactions are
 initiated by customers, the customers also provide a lot of the
data for the transaction that may otherwise need to be entered
by business staff. This means that some of the work and costs
are effectively shifted to customers; this is referred to as
'customer outsourcing'.

9) Stepping beyond borders to a global view-Using aspects of e-

commerce technology can mean your business can source and
use products and services provided by other businesses in
other countries. This seems obvious enough to say, but people
do not always consider the implications of e-commerce. For
example, in many ways it can be easier and cheaper to host and
operate some e-commerce activities outside Australia. Further,
because many e-commerce transactions involve credit cards,
many businesses in Australia need to make arrangements for
accepting online payments. However a number of major
Australian banks have tended to be unhelpful laggards on this
front, charging a lot of money and making it difficult to
establish these arrangements - particularly for smaller
businesses and/or businesses that don't fit into a traditional-
economy understanding of business. In some cases, therefore,
it can be easier and cheaper to set up arrangements which
bypass this aspect of the Australian banking system.
Admittedly, this can create some grey areas for legal and
taxation purposes, but these can be dealt with. And yes these
circumstances do have implications for Australia's national
competitiveness and the competitiveness of our industries and
businesses.

DISADVANTAGES OF e - COMMERCE AND CONSTRAINTS

Some disadvantages and constraints of e-commerce include the

following:

1) Time for delivery of physical products -It is possible to visit

a local music store and walk out with a compact disc, or a
bookstore and leave with a book. e-commerce is often used to
buy goods that are not available locally from businesses all
over the world, meaning that physical goods need to be
delivered, which takes time and costs money. In some cases
there are ways around this, for example, with electronic files
of the music or books being accessed across the Internet, but
then these are not physical goods.
2) Physical product, supplier & delivery uncertainty- When
you walk out of a shop with an item, it's yours. You have it;
you know what it is, where it is and how it looks. In some
respects e-commerce purchases are made on trust. This is
because, firstly, not having had physical access to the product,
a purchase is made on an expectation of what that product is
and its condition. Secondly, because supplying businesses can
be conducted across the world, it can be uncertain whether or
not they are legitimate businesses and are not just going to
take your money. It's pretty hard to knock on their door to
complain or seek legal recourse! Thirdly, even if the item is
sent, it is easy to start wondering whether or not it will ever
arrive.

3) Perishable goods -Forget about ordering a single gelato ice

cream from a shop in Rome! Though specialised or refrigerated
transport can be used, goods bought and sold via the Internet
tend to be durable and non-perishable: they need to survive the
trip from the supplier to the purchasing business or consumer.
This shifts the bias for perishable and/or non-durable goods
back towards traditional supply chain arrangements, or
towards relatively more local e-commerce-based purchases,
sales and distribution. In contrast, durable goods can be traded
from almost anyone to almost anyone else, sparking
competition for lower prices. In some cases this leads to
disintermediation in which intermediary people and businesses
are bypassed by consumers and by other businesses that are
seeking to purchase more directly from manufacturers.

4) Limited and selected sensory information-The Internet is an

effective conduit for visual and auditory information: seeing
pictures, hearing sounds and reading text. However it does not
allow full scope for our senses: we can see pictures of the
flowers, but not smell their fragrance; we can see pictures of a
hammer, but not feel its weight or balance. Further, when we pick
up and inspect something, we choose what we look at and how we
look at it. This is not the case on the Internet. If we were looking
at buying a car on the Internet, we would see the pictures the
seller had chosen for us to see but not the things we might look
for if we were able to see it in person. And, taking into account
our other senses, we can't test the car to hear the sound of the
engine as it changes gears or sense the smell and feel of the
leather seats. There are many ways in which the Internet does not
convey the richness of experiences of the world. This lack of
sensory information means that people are often much more
comfortable buying via the Internet generic goods - things that
they have seen or experienced before and about which there is
little ambiguity, rather than unique or complex things.

5) Returning goods- Returning goods online can be an area of

difficulty. The uncertainties surrounding the initial payment
and delivery of goods can be exacerbated in this process. Will
the goods get back to their source? Who pays for the return
postage? Will the refund be paid? Will I be left with nothing?
How long will it take? Contrast this with the offline
experience of returning goods to a shop.

6) Privacy, security, payment, identity, contract-Many issues

arise - privacy of information, security of that information and
payment details, whether or not payment details (eg credit card
details) will be misused, identity theft, contract, and, whether
we have one or not, what laws and legal jurisdiction apply.

7) Defined services & the unexpected -e-commerce is an

effective means for managing the transaction of known and
established services, that is, things that are everyday. It is not
suitable for dealing with the new or unexpected. For example,
a transport company used to dealing with simple packages
being asked if it can transport a hippopotamus, or a customer
asking for a book order to be wrapped in blue and white polka
dot paper with a bow. Such requests need human intervention
to investigate and resolve.

8) Personal service- Although some human interaction can be

facilitated via the web, e-commerce can not provide the
richness of interaction provided by personal service. For most
businesses, e-commerce methods provide the equivalent of an
information-rich counter attendant rather than a salesperson.
This also means that feedback about how people react to
product and service offerings also tends to be more granular or
perhaps lost using e-commerce approaches. If your only
feedback is that people are (or are not) buying your products
or services online, this is inadequate for evaluating how to
change or improve your e-commerce strategies and/or product
and service offerings. Successful business use of e-commerce
typically involves strategies for gaining and applying customer
feedback. This helps businesses to understand, anticipate and
meet changing online customer needs and preferences, which is
critical because of the comparatively rapid rate of ongoing
Internet-based change.
 9) S i z e a n d n u m b e r o f t r a n s a c t i o n s - e - c o m m e r c e i s m o s t o f t e n
conducted using credit card facilities for payments, and as a
result very small and very large transactions tend not to be
conducted online. The size of transactions is also impacted by
the economics of transporting physical goods. For example,
any benefits or conveniences of buying a box of pens online
from a US-based business tend to be eclipsed by the cost of
having to pay for them to be delivered to you in Australia. The
delivery costs also mean that buying individual items from a
range of different overseas businesses is significantly more
expensive than buying all of the goods from one overseas
business because the goods can be packaged and shipped
together.

Reflecting some of the comments above, the following chart (Figure

1.1) shows some of the complaints made by Australian e-consumers.

Figure 1. 1: Reasons for consumer complaints (Australia 2002)

(EGEC, November)
Source: www.google.com
 CHAPTER - 2

TECHNICAL ASPECTS

HOW e- COMMERCE WORKS

Figure 2.1: Working of e-commerce

Source: www.online-commerce.com/tutorial.html

The consumer moves through the internet to the merchant's web site.
From there, he decides that he wants to purchase something, so he is
moved to the online transaction server, where all of the information
he gives is encrypted. Once he has placed his order, the information
moves through a private gateway to a Processing Network, where the
issuing and acquiring banks complete or deny the transaction. This
generally takes place in no more than 5-7 seconds. There are many
different payment systems available to accommodate the varied
processing needs of merchants, from those who have a few orders a
day to those who process thousands of transactions daily. With the
addition of Secure Socket Layer technology, e-commerce is also a
very safe way to complete transactions.

Steps to build elements of e-commerce:-

1. Register domain name

 2. Hire space on a web-hosting company
3. Create website pages
4. Shopping Cart Software
5. Add a payment system
6. Use various promotion services to get your site noticed

Register Domain Name

Before building your website, you should register a domain name. A

domain name is the thing that looks like : "yourdomain.com". Your
domain name represents the URL (or permanent web address) of your
website. Therefore, when anyone types in "yourdomain.com" or
"www.yourdomain.com", they will see your website.

You register your domain name through a domain name registrar or

hosting provider. You simply check that your preferred domain name
is available, then register it (online). Domain names are registered
on an annual basis.

Get a Webhost

A web host (or hosting provider), is a company that makes your

website available for the world to see. They have the equipment and
technical skills to make sure your website is available to the world,
24 hours a day, 7 days a week. Choose your hosting provider
carefully - a good host will have excellent support

Create Website

Websites are collections of HMTL. There are various softwares

(like Photoshop, dream viewer, Adobe Photoshop,Jasc.com, Paint
shop Microsoft Front page ,Dream Weaver, Netscape Communicator-
Free) available on internet of free cost to create. Websites can be
very ambitious, with stunning graphics, animation, sound, database
search systems, customer recognition and a good many other
features. Many successful ecommerce sites are half a dozen pages
extolling the virtues of the product. More can be less, and 'wow'
sites will only hinder customers getting to your products, and make
promotion more difficult.

Shopping Cart Software

Shopping cart software is an operating system that can be used to

allow people to purchase your items, keep track of your accounts,
and tie together all of the aspects of your e-Commerce site into one
cohesive whole. While there are many other types of software that
you can use in it's place, such as catalog software or a flat order
form, shopping cart software is the most popular and the most
widely known.

Many Online Transaction Providers will have shopping cart software

that comes with their service, but it can often be very expensive, so
be warned. If you cannot afford to spend at least a couple of
hundred dollars on this software, you should be looking for a
package that offers it as a rental included in the monthly service
charge, or one that offers a simple flat order form.

Payment system
In selling something you'll want to be paid as quickly, safely and
painlessly as possible. Ecommerce has an option payment gateway to
pay amount.
A payment gateway is an ecommerce application service provider
that authorizes payments for e-business,online retailers.It is the
equivalent of a physical point of sale terminal located in most retail
outlets. Payment gateway protects credit cards details encrypting
sensitive information, such as credit cards numbers, to ensure that
information passes securely between the customer and the merchant
and also between merchant and payment processor.

PAYMENT GATEWAY WORKS:

Figure 2.2: Working of payment gateway

Source: www.onlinebusinesswiki.com

A payment gateway facilitates the transfer of information between a

payment portal and the Front End Processor or acquiring bank. When
a customer orders a product from a payment gateway enabled
merchant, the payment gateway performs a variety of tasks to
process the transaction:

• A customer places order on website by pressing the 'Submit

Order' or equivalent button, or perhaps enters their card
details using an automatic phone answering service.
• If the order is via a website, the customer's web browser
encrypts the information to be sent between the browser and
the merchant's web server. This is done via SSL (Secure
Socket Layer) encryption.
• The merchant then forwards the transaction details to their
payment gateway. This is another SSL encrypted connection to
the payment server hosted by the payment gateway.
• The payment gateway forwards the transaction information to
the processor used by the merchant's acquiring bank.
• The processor forwards the transaction information to the card
association (i.e., Visa/MasterCard).
• If an American Express or Discover Card was used, then the
processor acts as the issuing bank and directly provides a
response of approved or declined to the payment gateway.
• Otherwise, the card association routes the transaction to the
correct card issuing bank.
• The credit card issuing bank receives the authorization request
and sends a response back to the processor (via the same
process as the request for authorization) with a response code.
In addition to determining the fate of the payment, (i.e.
approved or declined) the response code is used to define the
reason why the transaction failed (such as insufficient funds,
or bank link not available).
• The processor forwards the response to the payment gateway.
• The payment gateway receives the response, and forwards it on
to the website (or whatever interface was used to process the
payment) where it is interpreted and a relevant response then
relayed back to the cardholder and the merchant.
• The entire process typically takes 2–3 seconds.
• The merchant must then ship the product prior to being
allowed to request to settle the transaction.
• The merchant submits all their approved authorizations, in a
"batch", to their acquiring bank for settlement.
• The acquiring bank deposits the total of the approved funds in
to the merchant's nominated account. This could be an account
with the acquiring bank if the merchant does their banking
with the same bank, or an account with another bank.
• The entire process from authorization to settlement to funding
typically takes 3 days.
Many payment gateways also provide tools to automatically screen
orders for fraud and calculate tax in real time prior to the
authorization request being sent to the processor. Tools to detect
fraud include geolocation, velocity pattern analysis, delivery
address verification, computer finger printing technology, identity
morphing detection, and basic AVS checks.

Promoting Your Site

With hundreds of new ecommerce sites appearing every day on the

Internet, it's getting mighty crowded out there. How is your site
going to be noticed? By:
• Getting out a press release.
• Featuring in business directories, in online and off-line
versions.
• Submitting to the search engines, perhaps employing a site
optimization company to get a high ranking.
• Using the pay-per-click search engines, which charge a few
cents to a few dollars for each visitor that clicks through to
your site with a particular search phrase.
• Signing up other sites as affiliates, paying them a commission
on the sales they achieve for you.
• Using search engine ads.
• Persuading other sites to link to yours, possibly through a
reciprocal links directory.
• Winning awards for your site.
• Offering online competitions, introductory deals and
promotions.
• Providing free and helpful information on your site.
• Advertising off-line in newspapers and specialist magazines.

HARD DRIVES

The primary computer storage device, which spins, reads and writes
one or more fixed disk platters. In practice, the terms "hard drive"
and "hard disk" are used synonymously. Hard drives are the storage
medium in desktop and laptop computers as well as all servers and
mainframes throughout the world. For e-commerce website we can
use one of the hard drives detailed below.

Single hard drive

It is a regular hard disk drive use to store data. It is a non-volatile

storage device that stores digitally encoded data on rapidly rotating
platters with magnetic surfaces. Strictly speaking, "drive" refers to
a device distinct from its medium, such as a tape drive and its tape,
or a floppy disk drive and its floppy disk. Early HDDs had
removable media; however, an HDD today is typically a sealed unit
with fixed media.

Mirrored hard drive

Mirrored disk drive is the best option in terms of cost and memory
requirements. Hardware disk mirroring uses two physical hard disk
drives and a disk controller. The disk controller handles the creation
and regeneration of data.

When disk mirroring is implemented, every time data is written to

one disk, the disk controller ensures that the second disk is an
identical copy of the first. This is why disk mirroring is great for
protecting against hard drive failure but is not a replacement for
backing up your systems – corrupted data on disk one is also
simultaneously corrupted on disk two. Disk mirroring works in the
background and does not require maintenance. In the event of a hard
drive `failure, the system will display information about the failed
drive on screen and some drives have lights to
indicate whether the disk is functional too.

Drive Array

Disk array refers to a linked group of one or more physical

independent hard disk drives generally used to replace larger, single
disk drive systems. The most common disk arrays are RAID
(Redundant Array of Independent Disks) technology of arranging the
devices into arrays for redundancy. A disk array may contain several
disk drive trays, and is structured to improve speed and increase
protection against loss of data.
Disk arrays organize their data storage into Logical Units (LUs),
which appear as linear block paces to their clients. A small disk
array, with a few disks, might support up to 8 LUs; a large one, with
hundreds of disk drives, can support thousands. Disk arrays are an
integral part of high-performance storage systems , and their
importance and scale are growing as continuous access to
information becomes critical to the day-to-day operation of modern
business. This is a Fault-Tolerant drive, have Slower speed but
cheaper than Mirror.
BACKUP SYSTEMS

1. Tape Technology

Tape backup technologies have to keep up with the ever increasing

capacity of disk drives which is an alternative and attractive way to
backup and secure data with.
High capacity solution for e-commerce. By using tape drives you
have an easy and convenient way to backup server data for small and
medium sized company websites. We have different types of tape
back up listed below.

• DAT (Digital Audio Tape)

Digital audio tape (DAT) is the tape technology of choice for

backup memory because of its superior storage capacity,
compactness and high reliability. A DAT cassette can store
1.3Gbytes of data, can record for two hours and retrieves a large file
in an average of 20 seconds; DAT storage technology has an error
rate of one in 10(superscript 15) bits.

Sony and HP defined the DDS (Digital Data Storage) standard which
is a standard for data backup device using the DAT technology. The
latest DDS-4 standard provides 20 GB of storage capacity.

• DLT (Digital Linear Tape)

DLT is a linear tape technology which uses several tracks for

storage. Between 128 and 208 tracks per tape using a half-inch tape
width. DLT is a popular technology for backup tape drives and it is
being favored by Compact. The DLT 8000 have a storage capacity of
40GB and data transfer rate of 6 Mbps. Super DLT is the most
technical advanced tape system.

• Tape Library

A tape library is a storage device which contains one or more tape

drives, a number of slots to hold tape cartridges. These devices can
store immense amounts of data, currently ranging from 20 terabytes
up to more than 50 peta bytes of data, or about one hundred
thousand times the capacity of a typical hard.

2. Online data backup

One another solution for data backup system is Internet data storage
from one of the many online backup service providers available on
the Internet. By using an online backup solution provider you get a
backup system for your computer's data that is secure and at the
same time stored safely at a remote location. You can store your
data as an online data backup by using an ftp transfer program to
transfer data to an ftp server or on to space on your web host. Your
computer can crash and you risk lose your stored information. If you
are lucky you may be able to recover your data by paying a large
bill, but what if your computer gets stolen or you lose your
computer completely in a fire. So, we can use online data backup.

SECURITY

Everybody who opens an E-commerce store should be concerned

about their web site security. E-commerce usually involves the
processing of credit cards and sensitive customer information so
security is very important. There has been an increase as well in
stolen credit card numbers being used to buy merchandise. You as
the store owner are responsible for screening these credit card
numbers because it is your loss for both the amount charged and the
merchandise that you ship for a fraudulent transaction. Here are
some precautions by which risk can be reduced:

• Use a SSL Secure Socket Layer encryption on your web site to

encrypt sensitive customer data. Pages that are encrypted with
SSL layers will show a "padlock" at the bottom right of the
web browser if you are using Internet Explorer.
• Do not store customer's credit card information on the server.
Process transactions immediately through your payment
gateway (such as Authorize.net or Verisign) and have them be
responsible for the credit card security. You may also store
half of the customer's credit card number on the server and
have half of the number emailed to you if you wish to
manually process the order.
• Collect the Card Verification Value of the credit card (3 digit
number located on the back of the card) for further card
verification
• Use your credit card processor's Address Verification System
to verify the correct billing address (street and zip) of the
credit card. If the address does not match it may be best to
cancel the order. Using this method along with #5 will prevent
99% of your fraudulent orders.
• Do not ship to an address other than the billing address of the
credit card.
• You may wish to collect the issuing bank name and issuing
bank phone # of the credit card. If the transaction looks
suspicious you can call the bank to make sure it is not a stolen
credit card.
• Use common sense, if the order looks suspicious do not
process it, or wait until the next day. Often if the card is
stolen the card will be reported as stolen the next day and you
will avoid the fraudulent transaction.
• For foreign country orders you may want to only take money
orders or cashiers checks. Foreign banks sometimes to not
have address verification systems and the transactions are
riskier.
 CHAPTER - 3

BUSINESS ASPECTS

Core Aspects of an Internet Business

An internet business is a trade mechanism, which is exclusively

being carried out by online means. All the transactions, selling and
purchasing are carried out online. e-commerce has facilitated
internet business by providing the online means with more
authenticity and capability to carry out business and trade
transactions.
To successfully launch an internet business can be a complicated
process for newcomers, especially if the business initiator has no
concepts and idea about the core aspects of internet business. The
online business trend is very competitive and making an impact in
the online community is a relatively difficult task. Any negligence
in implementing the core aspects of the internet business will not
only hinder the progress of the internet business but could also
result in the internet business downfall.

The following are the core aspect of internet business:

Internet Law

The internet business is accountable to the law if it does not follow

the criteria which are being setup by the administration. Most
people initiating the business fail to realize the legal accountability
of running an internet business. The internet laws are the core
aspect to internet business and it's very necessary that an individual
starts an internet business which is according to the law to avoid
complications in the later stage of the business. The internet law
clearly states the rule for commencing internet business, secure cash
transactions, rules to avoid spamming etc.

Internet Marketing and Advertising

The success of an internet business is solely dependent upon the

advertising and marketing campaign the internet business. This
phase is consider to be a core aspect of the internet business as
without marketing no internet business can survive on the cyber
space. There are several marketing mechanisms which are used on
the internet. Some popular mechanism includes banner
advertisements, affiliation with search engines, promotion through
referral system etc. Internet is a huge business with a target market
of millions of people therefore it is very necessary that an internet
business initiator fully comprehend the importance of marketing and
advertising for the survival of the internet business and to enable it
to make profits in a timely manner.

Internet Security

Security is also a core aspect of an internet business. Since the

business is exclusively conducted online therefore to gain the trust
of clients it is required by the business owners to implement
security and ensure safe transaction of money over the internet.
There are many security protocols that can be implemented in the
internet business website to make it more secure.

Customer Feedback

To get proper customer and client feedback is also very necessary as

it enables the business to fully realize its potential and the impact it
is making in the market. There are several ways customer feedback
can be taken online. This include using online forums, chat servers
and testimonial pages to directly interact with the customers and
check how the business is being conceived online.

Five Important Aspects of Online Business

Filed under:

 Entrepreneurship
 Self-help
 Business
 Online Business
 Marketing

Internet is the opportunity. Any one can create new business in

Internet if you have ideas and passion. To make your business
visible and heard, your website is the first recommendable tool. If
you sell products and services, you need to have an e-commerce site.

e-commerce web site design is nothing different than a traditional

web design, but requires a few more extra functionalities and
components to handle financial transactions. For those additional
services, you will have to rely on third parties. Many startups are
intimidated by the process and they do not build web sites that are
capable of e-commerce transactions. I am trying to give you just a
brief idea of what it takes to design e-commerce sites. I will write
different aspects of online business in my future posts.
This will help you understand how e-commerce site development
differs from regular web site development, and will also help you to
build web sites that accomplish desired purpose.

Transaction Security

One of the most important aspects of e-commerce web site design is

security that creates confidence in consumers doing online
transactions. You need to make sure that your visitors can safely and
securely input their personal details, credit card information and
shipping information into your online payment system. To build web
sites that are secure, you will need to protect pages with the
encryption of Secure Socket Layer (SSL). SSL encrypts the
information transferred from your page to the web server and other
servers like payment processing server and merchant bank servers.
You can get installed SSL certificate for your e-commerce websites
through your website host. There are many digital certificate
providers. Most popular and trusted providers are Verisign and
Thawte.

Payment Gateway

To build web sites that accept online payments, you will need to
incorporate payment gateway services for processing credit/debit
cards into your ecommerce web site design. Payment Gateways are
connected with your bank through your merchant accounts in those
banks. All financial transactions should go through payment gateway
for validation and authentication of the cards and secured
transactions before payment is deposited to your merchant account.
Payment Gateways charge a small percentage of transaction fees
and fee for fund transfer. You can choose to accept various credit
cards, and other online payment methods like Pay Pal, Verisign,
Authorize net, to checkout, World Pay etc. This is something that
should be arranged early in the site development process so that you
can begin doing business immediately once your site has launched.
Acquiring payment gateway account, integrating the feature into
your e-commerce site and testing the transactions may some time,
even sometime frustrating in coordination and communication with
different providers. So plan ahead for this.

Look and feel

Aesthetics is another important aspect of e-commerce web site
success. It helps to make your visitors spend their time in your site.
Competition is so fierce on the Internet. If you want to build web
sites that stand out from the crowd, they must be aesthetically
appealing. A beautiful site with clean and crisp layout will be more
likely to draw customers, and is much more likely to encourage
repeat customers than a site that has been poorly developed. To get
an idea of what looks good and what doesn’t, you should visit
competing and non-competing e-commerce sites around the web.

Software and Applications

There are many different software products and e-commerce

applications that can be purchased and even available in the for of
free and open source software to help you with your e-commerce
web site design and run your online business. Some of these tools
and frameworks will be helpful when you build web sites, and others
will be helpful when you have launched the site and want to track
orders, monitor your inventory, or enable features like payment
processing and email auto-alerts.

Hire the professionals

If you want to build websites that are e-commerce ready, but don’t
have the e-commerce web site design experience needed to
accomplish the task, you can hire an e-commerce web site design
professional to help you with the trickier portions of site
development. With a minimal amount of help from you, a
professional designer can build web sites that are visually appealing
and then incorporate the features you need to complete e-commerce
transactions.

CHAPTER - 4
 SWOT ANALYSIS

SWOT ANALYSIS OF e-COMMERCE

SWOT analysis is an important tool for auditing the overall strategic

position of a business and its environment.
Strengths and weaknesses are Internal factors. For example, a
strength could be your specialist marketing expertise. A weakness
could be the lack of a new product.
Opportunities and threats are external factors. For example, an
opportunity could be a developing distribution channel such as the
Internet, or changing consumer lifestyles that potentially increase
demand for a company's products. A threat could be a new
competitor in an important existing market or a technological
change that makes existing products potentially obsolete.

STRENTHS

1. 24 hrs a day, 7 days in a week your business in operation.

2. You can do your business globally by sitting at your office,
home or in bedroom.
3. The products reach to customers directly from the producers at
a lower price than the market value.
4. It is fast and effective.
5. By visiting different websites one can within a short time can
compare the price and buy on the best deal.
6. Advertising your product is cost effective in compare with
conventional offline system.
7. Low staff cost.
8. Financial transaction through electronic fund transfer is very
fast and can be done from any part of the world.
9. Can be started with very low investment.

WEAKNESS

1. There is no direct interaction between the customer and the

seller. Therefore, the scope of convincing the customer does
not exist.
2. Many times, we prefer to buy the product by reaching
personally to the market rather than purchasing through
Internet.
3. Sometimes, transportation cost increases the product cost.
4. No. of potential customers who can buy through Internet is
still not enough.
OPPORTUNITIES

1. Everyday number of Internet users is increasing in a rapid

way.
2. People of tomorrow will feel more comfortable to buy products
through Internet only.
3. Big companies are already entering in this field so; they are
making people habitual and confident about marketing through
Internet at the cost of the companies.

THREATS

Dishonest persons entering in this field which damage the

confidence and faith of common people on marketing through
Internet.

Figure 4.1: SWOT Analysis

Source: www.google.com
CHAPTER - 5
 BIBLIOGRAPHY

1. w w w . g o o g l e . c o m
2. h t t p : / / w w w . f a q s . o r g / a b s t r a c t s / E n g i n e e r i n g - a n d - m a n u f a c t u r i n g -
industries/Digital-audio-tape-for-data-storage-Magnetic-
megabits.html
3. h t t p : / / w w w . d a t a - b a c k u p - a n d - s t o r a g e . c o m / t a p e - b a c k u p -
drives.html
4. http://www.itwebexperts.com/fraud_prevention.php
5. web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTINFOR
MATIONANDCOMMUNICATIONANDTECHNOLOGIES/0,,con
tentMDK:21035032~menuPK:2888320~pagePK:210058~piPK:2
10062~theSitePK:282823,00.html
6. w w w . g s p a y . c o m / g e n e r a l - t e r m i n o l o g y - a s s o c i a t e d - w i t h - e -
commerce-merchant-accounts.php
7. w w w . m o b j a c k w e b d e s i g n . c o m / g l o s s a r y . h t m l
8. w w w . i f s - d e . c o m / p a g e s / g l o s s a r y _ f i l e s / E g l o s s . h t m
9. www.SmallBusinessBible.org
10. www.wikipedia.com
 CHAPTER - 6

APPENDIX

How much you use e-commerce website? Rate yourself on the given
scale. If you think, you use it 5-6 times in a month rate yourself as 5
or if you do not use it rate yourself as 1.

1. How many hours you use computer in a week?

(a) 1 0 h r s / w e e k ( b ) 2 0 h r s / w e e k (c) greater than 20 but
less than 27 hrs/week (d) Do not know

2. Which e-commerce website you like most?

3. How many products you buy from online shopping in a year?

(a)10 (b) Less than 10 (c) More than 10 (d) Do not know

4. Which type of product you like to buy from online shopping?

(a)Clothes (b) Devices (c) Books (d) Gifts

5. How much you like the services provided by online retailer.

Rate it on scale of 1-5.

6. W h a t t y p e o f p a y m e n t y o u g i v e ( P O , c r e d i t c a r d , o n l i n e o r
offline payment)? Which cards? (Visa/MC? American
Express?)

7. H a v e y o u f e e l a n y c h a n g e i n p r i c e o f o n l i n e s h o p p i n g a n d
retail shopping. Is there much difference in price. Rate it on
scale of 1-5. Rate 5 for high difference.

8. H o w c o n c e r n e d a r e y o u a b o u t t h e f o l l o w i n g i s s u e s ?
Very Fairly Not
concerned concerned concerned
Security /
fraud
Unsolicited
email (spam)
Inappropriate
material
Expensive
Invasion of
privacy
 No concerns /
fears

9. How much you like quality of product purchased by you? Rate

it on scale of 1-5. Rate 5 for high quality.