2. The Business
Changes
An e-marketplace is not
just a bazaar for parts and products
E-marketplaces allow
for instant communications throughout the supply
chain giving the partners a clear real-time
picture of supply and demand. Suppliers can now
organise their production according to the needs
of the customer. Producers can check on-line the
availability of raw materials or where in the
world an expected delivery is. In short,
e-commerce uses information to cut down the need
for inventory. Producers build each computer
only when a customer has ordered it.
E-commerce creates revenue
streams, saves costs, and enables businesses to
better manage their inventory. Traditional
business is governed by complex processes, and
constrained by informational inefficiencies,
geography and market hours. The Internet
simplifies traditional business, facilitating a
single destination for commerce, content, and
community. The benefits of e-commerce for SMEs
can include cutting costs, saving time, reducing
inventory and making electronic repetitive
processes that used to be handled manually and
individually (such as writing up invoices,
checking inventory, entering customer names on
to mailing lists, etc).
Moreover, e-commerce can put
customer information directly into a database,
allowing businesses to better monitor customer
behaviour, market to each customer individually
based on their buying habits and react more
quickly to trends. And much of this can be done
entirely automatically using data-mining
software.
In terms of purchasing,
companies can tap into a global supply base and
find the best value for their needs. They can
bid at electronic auctions, invite offers on
their own web sites and search the web for new
suppliers. On-line discussion forums allow
businesses to share information with other
businesses around the globe and thus to develop
relationships that would not have been possible
a decade ago.
Doing E-commerce
Launching an e-commerce
venture can range from putting a catalogue
on-line in an established electronic shopping
mall to developing an individual on-line
presence with custom built tools to meet the
vendor’s specific needs as well as his
customers’. On-line shopping malls are the least
expensive and most painless, there are many of
them and most of them provide “wizards”
(electronic helpers) and simple tools that allow
even the completely inexperienced to put
together their e-shop in a matter of hours. Many
of these services also provide payment services,
tips and marketing support and generally costs
are quite low – often less than €100 per month.
Such businesses can be considered the high
street shops of the Internet.
For the entrepreneur who
thinks big, only an individual web presence will
do. This requires hiring professionals to
develop an e-commerce web site, the purchase,
customisation and integration of sophisticated
software, and substantial marketing budgets. The
investments can be substantial – but so too can
be the rewards. Fortunately, for the
entrepreneur with a better idea than bank
balance, venture capital can provide financial
support and partnering can reduce costs.
Regardless of which path the
entrepreneur chooses, once he is on-line there
is a legal and regulatory framework that must be
dealt with. Fortunately, it sounds more
frightening than it actually is and, in many
respects, following the law results in better
treatment of customers. This is a good thing.
Many potential e-commerce customers still lack
trust and confidence in e-businesses, and
existing e-commerce customers are regularly
frustrated by on-line shops where they cannot
find information
or which do not make
processes clear. Hence, following the law can
result in improved sales and improved customer
relations. And that is not a bad thing. |
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