The term e-commerce refers to buying, selling or ordering goods and services on the Internet. E-commerce does not need to be an expensive or sophisticated function or process. It is simply a tool that makes it easier for customers and suppliers to do business with you, and you with them.
The transaction may simply involve a customer ordering an item from your online shop and paying for it when it is delivered. More sophisticated e-commerce systems allow users to pay immediately for items purchased online.
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E-commerce usesIssues to considerManaging riskE-commerce uses
Customers or clients can order or pay for things such as:
- products and services
- information in the form of papers, images, video or audio clips
- membership subscriptions
- rates, licences and taxes
- subscription to specialist services, newsletters etc, for which you normally charge
- bookings and tickets
- venue/facilities bookings.
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Issues to consider
If you want to sell products or services online you need to consider a range of issues before the website is built. The approach you adopt for each will affect the way the website is built and what e-commerce software is used.
Consider each of the following issues:
What products and services are to be sold online?
Not all products or services are suited to being sold online. For example, CDs and books sell very well online, but it is more difficult to sell life insurance over the Internet. Perhaps only a selection of your products or services should be offered for sale online.
Are there any business partners to consider?
Before making products or services available online, consider whether re-sellers or fellow franchisees would regard your e-commerce activity as treading on their territory or even taking business away from them.
What price to charge and what pricing model?
Should online customers pay the same as face-to-face customers? You may want to encourage online purchasers by offering a discount. Don't forget freight and handling costs.
How to present your products and services?
What will users see and how do they select products and services? Will you provide images, video clips, animations or samples of your products or services? If there is a range of products, how will these be presented? How will the prices be displayed? How will customers make their selections and will they be able to change their minds before paying - this is commonly referred to as a shopping cart solution.
How will the products or services to be delivered?
Options include directly online, by post or courier, or collected in person by the purchaser.
What payment method do you prefer?
Do you want to be paid by credit card, cheque, money-order, direct funds transfer or cash? Does this need to happen instantly, at the point of sale, or is it sufficient to take an order via the website or email and invoice the customer at the point of delivery or at the end of the month?
What level of security is needed?
How dependent will your business be on the security and reliability of the e-commerce system? If a significant amount of your turnover is to be put through the website then it needs to be secure and very reliable.
Fulfilment
Are the goods and services available for immediate delivery? If you require immediate payment but then cannot supply the goods, you may lose the goodwill of the customer.
Inventory/catalogue
Does the e-commerce solution need to be linked to your product catalogue and/or stock and inventory system? If you have only a handful of products and you don't expect to sell high volumes through the website this may not be an issue. But if you expect a high volume of sales, are offering a large number of products, or have to constantly update what's on offer, you may need to have a direct link between the website and the catalogue systems on your office computers.
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Managing risk
Providing an e-commerce solution carries some risks. To limit the risks and ensure you mange the expectations of your customers, you should develop a range of policies and explain them clearly on the website. These include:
- privacy - what you will and will not do with their details
- returns - under what circumstances you will accept returned items and how should this be done
- shipping policy - freight costs, insurance, import duties, where you will not deliver goods
- fulfilment policy - what you will do if an item/service is purchased but you cannot fulfil the order in reasonable time
- security - personal details, their payment records, credit card or account details.
Once you have developed the appropriate policies it is a good idea to have them examined by an appropriately experienced lawyer before placing them on the website.
There are numerous e-commerce solutions available from Internet Service Providers (ISPs), web developers and specialist third-party suppliers. The overriding considerations are the integrity and security of the solution, and the bona-fides of those selling and supporting it.
When choosing an e-commerce solution ensure it is supported by a reputable bank and is already being used on the websites of organisations you recognise and respect.
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More information
On this site
Why have a website?
Types of websites
Web accessibility
What to include on your website
Maintaining your website
Where to get help
Other websites
I want to get started in e-commerce - Department of Broadband, Commerce and the Digital Economy
Digital learning resources - ForwardIT, Department of Further Education, Employment, Science and Technology