Electronic commerce is the selling of either products or information on the Web. For products (or equivalently services) the two basic types of storefronts are individual stores and networks or malls. Individual stores like Macy's, Staples or Internet retailer Bluefly.com have the challenge of getting people to visit their site. The marketing connected with that is currently quite traditional. A few companies spend a lot on media advertising to bring their sites to the attention of their target market. In the "early" days of e-commerce, many companies used media advertising to drive traffic to their sites, but at a very high cost: either the traffic didn't materialize or the visitors didn't buy!

 

STORES

 

It was thought that Internet malls would be the cyberspace analog of shopping centers where the mall is a destination that can be marketed itself. But destinations on the Web and "travel" times between them are just instantaneous clicks, so malls have not really caught on. However, a new Internet mall-equivalent, the portal or network, has provided a gathering point for consumers to start their shopping. Each of the major portal sites from AOL.com to Yahoo! has featured stores in their shopping areas. This is very much like a mall because, once at the portal, the thinking is that a consumer would be more likely to buy from a portal merchant rather than go to another portal to shop a very similar merchant.

 

Unlike products, only some of which are perishable, most content is perishable and thus must be sold on a timely basis. Whether it is sports news or financial information, content is only as useful as its current relevance. For this reason, content sites often use a membership subscription business model so that they do not have to make a sale every time someone visits.

 

SHOPPING CARTS

A shopping cart on the Web combines the physical attributes of products on shelves, physical shopping carts and checkout lanes. Of course, not all stores use shopping carts, but the idea is the same: products (or services), choices and payment transactions. The difference is that with e-commerce this is all accomplished with one system.

 

Almost every electronic shopping cart works the same, which will be a very important factor in choosing which one to use for your business. There is a product page that shows your products for sale, a view page that shows what has been selected for the cart, an order page that summarizes the products selected and covers shipping and billing information and an "ordertemplate" page that connects with a database. This is also basically what the consumer sees. What is different is how shopping carts are set up.

 

If you know HTML (Hyper Text Markup Language) you could create your own cart. Many hosting companies provide do-it-yourself carts for free. The advantage of this approach is that you have great flexibility and you control all aspects of the system. The disadvantage, of course, is that you have to do it yourself.

 

Most sites use commercial shopping cart software and often hosting companies support a few major brands of carts. Some carts can only be used on Unix/Linux or Windows platforms so there is a three-level coordination needed: software, hosting company and platform.

 

Large site typically use e-commerce solutions developed by a computer company such as IBM or big full-service Web developers.

 

Finally, many merchants use packaged solutions that combine hosting, store creation and payment. Yahoo! Store and Microsoft's MSN Business both offer end-to-end e-commerce solutions that are complete products that can be purchased by anyone. Both of these vendors have large and small clients using their services.

 

In addition, complete stores can be set up in either a few clicks (e.g., CafePress.com) or by hosting your store on commerce sites like BigStep.com. Finally, Amazon's zShops are something in-between: a store that is easy to set up but a part of a high-traffic community.

 

From the consumer's point of view all shopping carts look virtually identical. This is the reason that your business idea, business model and marketing plan (including how you present your products in the selling environment) are what really matters. Shopping carts are one of the ways that the Internet levels the playing field. The small stores and the big stores can have vastly different scales and different levels of sophistication in Web site design, but at checkout time, you could be almost anywhere.

 

PAYMENT SYSTEMS

Making the sale is good for your ego; collecting money is good for your wallet. In an e-commerce transaction cash cannot be used, but credit cards can be accepted in real time and checks can be accepted through the mail. Business-to-business accounts can be based on purchase orders or procurement cards that result in direct billing. In addition, there are several electronic payment methods:

• Electronic cash
• Electronic check
• Electronic wallet (storing credit, charge card and debit card information)
• Electronic credit (advancing credit)
• Electronic script/gift certificates/prepaid credit cards (purchasing credit)