Chapter1

What is E-Commerce

E-CommerceThe exchange of goods, services, information, or

other business through electronic meansOriginated in 1991, when the Internet was opened

to commercial use.

Used by: Individual consumersSmall businessesLarge corporationsGovernments

DistributionThe movement of products and services

from the producer to the consumer.The right amount of product needs to arrive

at the right time. If 50,000 Super Bowl t-shirts arrive in February,

they would be sold at a loss to everyone.

E-Commerce Allows:Direct Connection

Between the manufacturer and the consumer so that products are produced when ordered.

Examples Dell Computers

Michael Dell began assembling computers for people while he was in college in Austin, Texas.

Dell does not have a warehouse of computers waiting for you.

They make your computer when you place your order, just like fast food.

Ford Motor CompanyFormed new company with Trilogy Software to

offer all products online.The website allows customers to buy build-to-

order vehicles online.

DisintermediationWhen a traditional channel of distribution is

no longer needed, it disappears. Example: Travel Agents and airline

tickets/vacations

ReintermediationThe addition of a level of the distribution

systemWeb sites that assist people in comparison

shopping online Example: Auto Insurance, Sears

ProductivityThe amount of output for each hour of work

How does technology affect productivity? It helps improve productivity because we

are able to get more done in a given time period.