De-Mystifying Ecommerce
| Category: E-commerce | Date: 2002-09-03 |
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.
Thanks to the World Wide Web, even Joe Neighbour’s humble one-man business can boast a global shopfront with millions of potential customers, enabling him to compete in markets previously reserved for the big players.
Many Australian businesses understand the potential of the Internet as an additional sales/marketing channel and have embraced this aspect of it, but many have yet to recognise the technology as an facilitator to drive distribution or operating costs down. This is where the real power of e-commerce lies.
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.
About the Author
Article by Kalena Jordan, CEO of Web Rank. Kalena was one of the first search engine optimization experts in Australasia and is well known and respected in her field. For more of her articles on search engine ranking and online marketing, please visit high-search-engine-ranking.com
kalena@high-search-engine-ranking.com
http://www.high-search-engine-ranking.com
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.
Thanks to the World Wide Web, even Joe Neighbour’s humble one-man business can boast a global shopfront with millions of potential customers, enabling him to compete in markets previously reserved for the big players.
Many Australian businesses understand the potential of the Internet as an additional sales/marketing channel and have embraced this aspect of it, but many have yet to recognise the technology as an facilitator to drive distribution or operating costs down. This is where the real power of e-commerce lies.
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.
About the Author
Article by Kalena Jordan, CEO of Web Rank. Kalena was one of the first search engine optimization experts in Australasia and is well known and respected in her field. For more of her articles on search engine ranking and online marketing, please visit high-search-engine-ranking.com
kalena@high-search-engine-ranking.com
http://www.high-search-engine-ranking.com
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