De-Mystifying Ecommerce
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By
Kalena Jordan You’ve
heard the term bandied around, discussed on the TV news and current affairs
programs, currently splashed across all the newspapers and used in connection
with some of Australia’s largest businesses. But what exactly IS e-commerce? e-commerce,
e-business, i-business, e-tailing, on-line business, they are all buzzwords
that basically mean the same thing - utilising Internet technology in the
operation/promotion of your business. This can be as simple as having a basic
corporate web site or as complex as running your entire business operations
via the Internet.
For those companies that rely on paper-based
factory orders and customer deliveries, it makes good business sense to
develop a streamlined order/ship/invoice system utilising Internet technology
between Head Office, their factories and their retail outlets. Even if their
current distribution system is effective, cost savings can usually be achieved
by transferring part of their supply chain (such as factory orders) on-line. Businesses worldwide are finding that
integrating internal systems between remote locations provides significant
cost savings by streamlining previously time-consuming procedures.
The Internet also offers the bonus of new markets and the opportunity
to form partnerships to reach those markets. For
example, freight and road haulage companies have always lived with the
knowledge that while trucks carry a full load one way, the company wears the
cost of empty trucks on return journeys. This significant waste of space
utilisation prompted a former McDonalds Manager in the U.S. to form the
National Transportation Exchange (NTE). The NTE now uses the Internet to
connect persons with loads needing transportation with shipping and freight
companies that have excess space. Transaction
costs are also much cheaper via the web. Consider this - the average bank
transaction cost is $1.07 via a teller and only $0.01 via the Internet.
Another example is air tickets - in the U.S. the average cost of processing an
air ticket is $23.00 via an agency versus $6.00 via the Internet. This is due
to the Internet’s ability to link customers directly to the airline’s
ticketing system, eliminating the need for a “middle agent” or ticketing
clerk. So to
take advantage of all these benefits and implement e-commerce, where do you
start? Firstly, think of technology as an enabler
to business strategy and not the other way around. Work out where you really
want your business to go in the next 5 years and then set yearly goals you
want to achieve. Find a reliable web development/e-commerce partner and ask
them how Internet technology can be utilised to help reach these goals. Just
how far you take e-commerce will depend on your business strategy, your
markets and your vision. Don’t let the bright lights of technology blind you
to your original business aims. Follow this advice and you will be well on
your way to successfully embracing e-commerce. Despite the advantages, setting up e-Commerce is not cheap, it’s not easy and it’s not fast. But it IS likely to have the biggest impact on business this century and its adoption will be critical for companies wanting to survive. The above article may be
re-published as long as the content remains unchanged and the following
paragraph is included at the end of the article, including the URL link. Article by Kalena
Jordan, CEO of Web Rank.
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