16479 e commerce

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E-Commerece

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What is Commerce?

Commerce is a division of trade or production whichdeals with the exchange of goods and services from

producer to final consumer.

It comprises the trading of something of economic value

such as goods, services, information or money betweentwo or more entities.

Commerce primarily express the fairly abstract notions

of buying and selling.

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What is E-Commerce?

E-commerce is the use of electronic communications and digitalinformation processing technology in business transactions to

create, transform, and redefine relationships for value creation

between or among organizations, and between organizations and

individuals. E-commerce refers to aspects of online business involving

exchanges among customers, business partners and vendors. For

example, suppliers interact with manufacturers, customers interact

with sales representatives and shipment providers interact with

distributors.

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Advantages of E-Commerce? Increased Access: Now, consumers can buy and get access to

goods all around the country even the world. Consumers can sit athome and get all their products and services without even leavingthe house. Businesses can not have to worry about pickup and theuse of e-commerce has made it easier for businesses to run theiroperation without the hassle of going to their supplier.

Cost of doing business is reduced is minimized by e-commerce. Convenience: Businesses and consumers now don't have to go out

of their way to buy products and services. Businesses who buyoverseas are unable to physically go to buy theirservices. Businesses can go to their supplier's website and order theproducts they need.

Expansion: Before e-commerce, businesses were restricted toeither their states or to certain areas because it was too costly to setup offices in different areas. With the coming of e-commerce,businesses have access to consumers and other business in all 50states and even the entire world!

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Disadvantages of E-commerce? Security: Biggest problem of ecommerce, is the issue on

security. As cash is exchanged on the web across borders

and continents, many unscrupulous individuals are

enticed to target this activity to perform illegal means to

earn money. Identity theft and hacking of personalinformation have become one of the serious problems in

the internet today.

Tax to the government: As business can be done in the

internet just as easily as clicking a button, paying theappropriate tax can be easily is evaded.

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Comparison between E-commerce and Traditional Commerce

Traditional Face to Face

Printed & written documents

Telephone communication

Postal mail

Payment by Cash, check or CC

Ads: print med, radio, tv Merchandize deliver immediately.

Customer takes merchandise home.

E-Commerce

No personal contact

Documents on the web.

Web pages personalized for a particular customer.

E-mail or webmail communication.

Ads on web, radio, tv

Payment: credit card, direct withdrawal, fund transfer (paypal).

Merchandise deliver home 2-5 days.

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Business Models

Brick-and-Mortar Businesses: Businesses thathave only a physical presence.

Click-and-Mortar Businesses: Businesses that

have both an online and an offline presence.

Combined Businesses: Businesses that have both

physical presence and online presence.

Store Front Model Businesses: Enhance brick-and

mortar business through web presence.

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Types of E-commerce

The major different types of e-commerce are:

Business-to-Business(B2B)

Business-to-Consumer (B2C)

Business-to-Government (B2G)

Consumer-to-Consumer (C2C)

Mobile commerce (m-commerce)

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What is B2B e-commerce?

B2B e-commerce is simply defined ase-commerce between companies.

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B2B E-commerce

Logistics - transportation, warehousing and distribution (e.g.,Procter and Gamble).

Application service providers - deployment, hosting andmanagement of packaged software from a central facility(e.g., Oracle and Linkshare).

Outsourcing of functions in the process of e-commerce, such

as Web-hosting, security and customer care solutions (e.g.,outsourcing providers such as eShare, NetSales, iXLEnterprises and Universal Access).

Auction solutions software for the operation and maintenanceof real-time auctions in the Internet (e.g., Moai Technologiesand OpenSite Technologies).

Content management software for the facilitation of Web sitecontent management and delivery (e.g., Interwoven andProcureNet)

Web-based commerce enablers (e.g., Commerce One, abrowser-based, XMLenabled purchasing automationsoftware).

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Examples of B2B E-Commerce Importers.com Alibaba.com EC21.com ECplaza.com GlobalSources.com TradeKey.com Made-in-China.com Busytrade.com DIYtrade.com TradeIndia.com India-Mart.com

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What is B2C e-commerce?

Business-to-consumer e-commerce, or commercebetween companies and consumers, involves customers

gathering information; purchasing physical goods (i.e.,

tangibles such as books or consumer products) or

information goods (or goods of electronic material ordigitized content, such as software, or e-books); and, for

information goods, receiving products over an electronic

network.

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B2C e-commerce

B2C e-commerce reduces transactions costs

model the cost of the product is reduced as we can

eliminate the middle men

major thing in B2c model is customer care

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Pre-Cautions of B2C E-commerce Check for digital certificates of the site

and it hacker free.

Check for shipping price.

See the previous service goingthrough the reviews of the oldcustomers

Purchasing with the appropriate cards.

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Some of the examples of the B2C model are:

www.llbean.com

www.landsend.com

www.bestbuy.com

www.sony.com

www.dell.com

www.amazon.com

www.store.microsoft.com

http://www.llbean.com/

http://www.landsend.com/

http://www.bestbuy.com/

http://www.sony.com/

http://www.dell.com/

http://www.amazon.com/

http://www.store.microsoft.com/

http://www.store.microsoft.com/

http://www.amazon.com/

http://www.dell.com/

http://www.sony.com/

http://www.bestbuy.com/

http://www.landsend.com/

http://www.llbean.com/

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What is B2G e-commerce?

Business-to-government e-commerce or B2G isgenerally defined as commerce between companies and

the public sector.

It refers to the use of the Internet for public

procurement, licensing procedures, and othergovernment-related operations.

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Examples of B2G E-commerce are:

www.fcw.com

www.washingtontechnology.com

www.Gcn.com

www.signalmag.com

www.governmnmentexecutive.com

http://www.fcw.com/

http://www.washingtontechnology.com/

http://www.gcn.com/

http://www.signalmag.com/

http://www.governmnmentexecutive.com/

http://www.governmnmentexecutive.com/

http://www.signalmag.com/

http://www.gcn.com/

http://www.washingtontechnology.com/

http://www.fcw.com/

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What is C2C e-commerce?

Consumer-to-consumer e-commerce or C2C is simplycommerce between private individuals or consumers.

This type of e-commerce is characterized by the growth

of electronic marketplaces and online auctions,

particularly in vertical industries where firms/businessescan bid for what they want from among multiple

suppliers.

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C2C e-commerce

This type of e-commerce comes in at least three forms:

auctions facilitated at a portal, such as eBay, which

allows online real-time bidding on items being sold in

the Web.

peer-to-peer systems, such as the Napster model (aprotocol for sharing files between users used by chat

forums similar to IRC) and other file exchange and later

money exchange models.

classified ads at portal sites such as Excite Classifiedsand eWanted (an interactive, online marketplace where

buyers and sellers can negotiate and which features

“Buyer Leads & Want Ads”).

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Examples of C2C E-commerce are:

www.ebay.com

www.napster.com

http://www.ebay.com/

http://www.napster.com/

http://www.napster.com/

http://www.ebay.com/

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What is m-commerce?

M-commerce (mobile commerce) is the buying andselling of goods and services through wireless

technology-i.e., handheld devices such as cellular

telephones and personal digital assistants (PDAs).

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Applications of M-commerce are:

Mobile Ticketing

Information Services

Mobile Banking

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Internet Advertising:

Advertising is a form of communication whose purposeis to inform potential customers about products and

services and how to obtain and use them.

Advertising in the web pages

Advertising before playing any videos

Advertising in between the videos

Advertising while the pages loads

Advertising by search engines

Advertising as a scroll bar while playing videos

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Security:

Most ecommerce merchants leave the mechanics to theirhosting company or IT staff, but it helps to understand

the basic principles. Any system has to meet four

requirements:

privacy: information must be kept from unauthorizedparties.

integrity: message must not be altered or tampered with.

authentication: sender and recipient must prove their

identities to each other. non-repudiation: proof is needed that the message was

indeed received.

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Management

Business Plan

Starting a business

Requirements to start a Business

Taxes

Insurances

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Business Plan

Is a formal statement of a set of business goals, thereasons why they are believed attainable, and the planfor reaching those goals? It may also containbackground information about the organization or teamattempting to reach those goals.

Though business plans have many different

presentation formats, business plans typically cover fivemajor content areas:

Background information A marketing plan An operation plan A financial plan A discussing of the decision making criteria that should

be used to approve the plan.

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Starting a business

Time commitment Commitment to education

Capital

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Requirements to start abusiness Step 1: Determine the legal structure of the business and

properly file the business name with the state and/or

county.

Step 2: Determine the potential tax responsibilities of the

new business on the federal, state, and local levels. Step 3: Determine necessary licenses, permits,

certifications, registrations, and/or authorizations for a

specific business on the federal, state, and local levels.

Step 4: Determine federal and state employerrequirements. There are various laws relating to

employment of personnel.

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Taxes

Methods of Accounting

Accounting Period

Type of Taxes

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Methods of Accounting

Each taxpayer must also use a consistent accountingmethod, which is a set of rules for determining

when to report income and expenses.

There are two types of accounting methods, which

dictate how the company’s transactions are recordedin the company’s financial books: Cash-basis

accounting and Accrual accounting. The key

difference between the two types is how the

company records cash coming into and going out of the business.

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Accounting Period

A “tax year” is an annual accountingperiod for keeping records and reportingincome and expenses. An annualaccounting period does not include a

short tax year. The tax years you canuse are: Calendar year Fiscal year

◦

A fiscal year is 12 consecutive months endingon the last day of any month exceptDecember.

52 – 53 – Week Tax Year you can electto use a 52 – 53 – week tax year

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Types of taxes

W-4 (Employee’s withholding allowancecertificate)

SS – 6.2% employer and employee

◦ Base limit is $102,000 (for 2008)

Medicare – 1.45% for employer and employee

File 941 (forms)

Federal Unemployment Tax Act (FUTA)

authorizes the IRS to collect a federal employertax used to fund state workforce agencies.

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Insurances

Building◦ Fire, wind, etc. replacement cost

Liability◦ Comprehensive liablity: personal and advertising

injury, fire legal liability, medical expenses,customer falling, etc.

Workers Compensation:◦ Employees’ injury related to work

Life Insurance for partner, employees, etc. –

owned by who..beneficiary?◦ Whole life◦ Term

Umbrella: coverage over comprehensive.

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Maintain a business:

Cash Flow Statement Balance Sheet:

Income Statement:

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Cash Flow Statement

Company’s incoming and outgoingmoney for one year.

Visibility of company depends upon

cash flow Reconcile bank statements

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Balance Sheet:

List all of your assets All of your liabilities

The difference is Owner’s Equity

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Income Statement:

An Income Statement, also called aProfit and Loss Statement (P&L), is afinancial statement for companies thatindicates how Revenue (money received

from the sale of products and servicesbefore expenses are taken out, alsoknown as the “top line”) is transformedinto net income .

The purpose of the income statement isto show mangers and investors whetherthe company made or lost money during

the period being reported.

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Employee benefits:

Holidays Sick leave (8 hours per month)

Vacation

Medical insurance

Retirement plan

Profit sharing

Bonus

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Business Entities

Sole proprietorship General partnership

Corporation

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Sole proprietorship:

An Individual – also known as the owneror self-employed person.

Performs all functions required tooperate a business starting withacquiring capital.

Accepts all profits and losses and paysall taxes.

Fully responsible for all debts andobligations

Unlimited liability: a creditor can claimagainst all of the owners assets whether

business or personal.

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The advantages of a Sole proprietorship :

It is easy to form and to dissolve All decision making power resides with

the sole proprietor.

The profits of the proprietorship aretaxed only once.

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The disadvantages of Soleproprietorship:

sole proprietorship faces unlimitedliability expansion.

It has limited ability to raise funds for

business expansion. It usually ends with the death of the

proprietor.

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General partnership:

A partnership is a form of businessthat is owned by two or more co-owners (partners) who share any

profits the business earns and wholegally responsible for nay debtsincurred by the firm.

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The advantages of a Generalpartnership :

It is easy to organize It is an effective form of business

organization in situations where team

production involves skills that aredifficult to monitor

The benefits of specializations can be

realized. The profits of the partnership are

taxed only once.

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The disadvantages of General partnershipare:

The partners have unlimited liability Decision making can be complicated

and frustrating.

The voluntary withdrawal of a partnerfrom the firm or the death of a partnercan cause that partnership to be

dissolved or restructured.

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Limited partnership:

For the purpose of combining capital, notto manage the business.

General partners and limited partners.

Limited partners not involved inmanaging the business. Limited partnersare not liable for the actions of thegeneral partners. They are liable to the

extent of their investment. They can losethe capital they invested.

General partners are fully liable; maytake more profits.

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Corporation:

A corporation is a legal entity that canconduct business in its own name. Corporations account for the vast

majority of total business revenues.

The Corporation may become a publiccorporation, with its shares being boughtand sold either through a stock market or"over the counter".

There is no limit on the number ofshareholders and shares may be held bypeople who are neither citizens norresidents of the United States.

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Disadvantages of Corporation:

The profits of the corporation aretaxed twice.

There are problems associated with

separation of ownership from control

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Advantages of Corporation:

The owners (stock holders) of thecorporations are not personally liablefor the debts of the corporation; thereis limited (not unlimited) liability.

The corporation continues to existeven when an owner sells his or hershares of stock or dies.

Corporations are usually able to raiselarge sums of financial capital forinvestment purposes.

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Thank You

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Clarifications?