Business Education: Basics of E-Commerce

B2B and B2C E-Commerce
Business-to-business (B2B) e-commerce is very different from business-to-consumer (B2C) e-commerce and must be handled differently. When selling to a customer, websites are often very flashy, relying on sparking the customers' emotions with great deals and features that stand out. They let the customer check out quickly and easily, often without even registering to make it feel easier and more secure. They usually offer a lot of different options to try to find something that will interest the consumer. A B2B website is often more streamlined, simpler, and focused. B2B customers are less likely to be moved by emotion, so companies focus on showing how they can meet customers' goals. The goal is to build a relationship with the consumer. There needs to be extensive contact information and there may be numerous ways for the business to get more personal help. They may have an account set up and may pay right away or receive an invoice at a later time.
Generally, B2B websites offer a lot more information to entice the customer to make the logical decision of choosing the product.

Internet Businesses
A virtual business is a business that operates on the internet instead of in a brick-and-mortar store. One of the best examples of this is Amazon.com. There may not be a lot of physical structure with a virtual business, lowering the startup, overhead costs, and required investment. Many conventional companies also have internet divisions. For instance, Target has many brick-and-mortar stores, but they also have a website where customers can purchase many of the items in stores as well as a wide variety of additional items. Most of the large companies offer online buying.
Market creators such as eBay bring together buyers and sellers and make money by taking a share of the transactions. Many entrepreneurs start online businesses right from their homes For instance, a seamstress may make clothing at home and sell it online. Many businesses are started this way because of the low startup costs.

Effects of Online Business on the Economy
Online business has a major effect on the economy. It has accounted for a great deal of the GDP growth and has become one of its largest influencers. Many states have enjoyed additional taxes from these sales, which have increased since new laws have passed making more items taxable. It has also given great opportunities for smaller businesses as well as entrepreneurs to start a business without a lot of overhead and capital. Entrepreneurs can now sell to people around the world, whereas before they had been severely limited by location and financial constraints. It has also empowered consumers by giving them more buying choices and the opportunity to easily and quickly comparison shop. Consumers can also write and read reviews to find out what products are really like. In many ways, the internet has had many positive economic effects.

Benefits and Drawbacks to Consumers of Buying on the Internet
There are a wide variety of advantages and disadvantages to buying on the internet. One advantage is increased selection. Consumers can buy a vast variety of products on the internet, far more than they can purchase at any single store. Many consumers like the convenience of buying from home. They can make purchases at any time, day or night. This is especially convenient for people who have difficulty going to stores such as a mother with young children. A lot of people find it easier to search for items online. It can take less time, and people can easily comparison shop to save money. Buying online also has drawbacks. Security issues like the theft of personal information are a common concern. It can also be difficult to evaluate an item without actually seeing it. For instance, a consumer cannot try on an outfit. The consumer may have to pay shipping costs and will have to wait for the item to be shipped.
Returns can be more of a hassle and involve the extra cost of return shipping.
Also, some consumers do not have internet access.

Methods Marketers Use to Collect Information Online
Marketers can find a wealth of information online. First, many companies put out online quizzes or surveys, which can explain a lot about consumers' preferences and behaviors. Marketers use cookies installed on web browsers to track users. They can see where users go, which helps them target people more effectively with advertising. They will also often get demographic and other personal information. Much of the information is then shared or sold to other companies, spreading it quickly in a big money business. Marketers can also attain a lot of information from social media websites such as Facebook.
With data mining, marketers look for patterns in collected data. They can use a simple database program to analyze the data. There are different techniques such as association (connecting two items), classification of customers, clustering, prediction, sequential patterns, decision trees, and combinations.
Many consumers do not realize how much information is collected.

Digital Marketing
There are various types of digital marketing, which can be effective in garnering customers and increasing sales. Many businesses possess websites where they share information about their company and advertise their products. Consumers can often purchase either directly from the website or follow a link to make a purchase. Email is another common form of internet marketing. Companies send out email blasts to potential and prior customers.
This is a relatively cheap way to reach many people, although a lot of people discard the emails. Viral marketing involves using social media to spread information about the company or products. For instance, companies send out pictures, videos, games, memes, or posts on Facebook and encourage people to spread them around so that they go 'viral.' Social media in general is an efficient and effective way to market, and companies use websites like Facebook, Twitter, Instagram, and more. Companies also send out web videos to give a dynamic view of their offerings. Many companies use a variety of internet marketing techniques.

Privacy and Security Issues Related to Online Business
The increase in online business has also increased privacy and security issues. When intellectual property is put online, some people will take it and use it illegally. In addition, hackers will steal and illegally use personal information. There is a great deal of identity theft as well. There have been certain measures to try to combat privacy and security issues.
Measures like firewalls and virus software can help. Passed in 1998, the Digital Millennium Copyright Act (DMCA) makes it illegal to produce and disseminate technology to try to get past processes that stop illegal viewing of protected information. It also increases copyright infringement penalties and lowers the liability of service providers from users' misdeeds in this area. The two parts of the DMCA are the WIPO Copyright and Performances and Phonograms Treaties Implementation Act and the Online Copyright Infringement Liability Limitation Act.

Branding and Product Placement Over the Internet
Companies can strengthen their brand over the internet. Many register domain names that are related to their brands and products so that people will instinctually know where to go. It can also help people remember websites. Companies can attract people to their website by using search engine optimization. This is the process of making a website in a way that will increase its rank on Google and other search engines. There are various strategies that can help achieve this such as using the right keywords, updating often, and getting others to link to the site. It is important for companies to pay careful attention to website design. The website should be easy to read and navigate and should match their branding. It should include easy contact information and a call to action. Many companies hire professional website designers to best promote their brand.

Distribution Channels and Strategies
Distribution for internet businesses may be different than traditional businesses. One reason is that, because the items are shown and advertised online, the party selling them does not actually have to have them in stock.
One popular method of Internet business is through drop shipping. With drop shipping, a seller does not physically have the products, but advertises and sells them. When a sale is made, the item goes from the wholesaler or retailer directly to the buyer. The seller will then get the difference in cost and price. This is commonly seen in auction websites like eBay. The company does not have to purchase the products in advance and risk losing the money if no one buys it. Internet companies may not need to keep as much in stock because they do not need to worry about 10 customers coming in at once and wanting the same product that they won't buy if it isn't physically there. If sellers can get more of the product easily, then they can keep none or very few on hand, reducing inventory costs.

Features of Traditional and Online Business
There are many differences between traditional and online businesses. One is the cost of entry. It can be very expensive to enter a traditional business. Entrepreneurs typically need a lot of capital to secure a physical building and get the products and labor and everything associated with a brick-and-mortar business. Alternatively, an online business can be started easily from someone's home with very little commitment and monetary output.
Many entrepreneurs start their business while working another job. There are far fewer costs to entry. The customer service will be different for an online business than a traditional business. With a traditional business, someone will be there for face-to-face contact, but with an online business, the customer service is done by phone or through avenues such as email, forums, and live chat. The number of potential customers is far higher for an online business than for a traditional one. Online businesses can reach people all over the world, whereas traditional businesses usually attract more local people.
Security can be an issue for both traditional and online businesses, but there are some additional issues for those online. They have to worry about identity theft, online fraud, and hacking.

Benefits and Drawbacks to Selling Online
There are both benefits and drawbacks to selling online. One advantage is businesses can reach a lot of people. A business might be able to sell to a person across the globe that they never would have otherwise been able to target. They can sell to people around the clock. Another advantage is cost. Someone can work from home and not have to incur the cost of a showroom or salesmen. This can open up entrepreneurship to someone who doesn't have the resources to start a traditional business. It can also allow people to test the market. For instance, a person can sell a few things online to see if there is a market before committing to a brick-and-mortat store. Businesses must consider the drawbacks of online selling. Some people do not have online access. With some products, online selling makes less sense. For instance, someone selling shoes who gets a lot of returns might find it easier to have a brick-and-mortar store. Also, there is fraud online. It can be easy for hackers to perform identity theft or access sensitive data. Companies have to spend the time, effort, and resources to create a website and web presence.

Conventional vs. Online Businesses

Differing Strategies
The processes of selling online and in person are very different, thus so are the strategies. For instance, in a conventional setting, the business is very limited in the product mix it can offer because there is only so much shelf space. It must choose the products for the limited amount of space. Online, it is easy to simply add another product to be offered. An online store has fewer costs, thus they may be able to offer the same products for less. Also, it is very easy to comparison shop online and go for the lowest price, thus sellers will fight to have the lowest price. Online businesses use a variety of promotion strategies. They might make a strong presence on a social media website. They could focus on excellent website design and search engine optimization content to drive people to their websites. They may use blogs and social media like Pinterest and Twitter to promote their products.

Differences in Behavior and Decisions of Consumers
There are large differences in the behavior and decisions of consumers shopping at a conventional business versus an online one. One difference is that consumers online generally have access to more information.
They can read reviews and comparison shop very quickly and easily. They can travel from store to store in an instant, which they obviously cannot do in a brick-and-mortar environment. They may make more informed decisions because of it. Someone in a store may be enjoying themselves and spend more time there as compared to someone online who is specifically looking for something. While at a store, a salesperson can pressure consumers into buying something more expensive or making an impulse buy.

Differences in Selling
People online are often more knowledgeable and need to be treated as such. They will often read reviews and do more research. People who go into a store may be looking for advice, so sellers need to be prepared to offer this. Consumers look at many different aspects of a product when they are in stores. They can actually see and feel it. Because they can only see pictures online, it is important to make sure the pictures are very flattering and show off the product in its best light. They need to provide information the consumer may not be able to perceive, such as dimensions. When selling online, customers have many choices and can easily leave. It's easier to switch to another website than go from one store to the next. Therefore, websites need to capture and keep customers' attention to make the sale.

Steps in Launching an Internet Business
First, the entrepreneur should decide on the business and write his or her business plan. He needs to make all the decisions about the product, such as pricing and how customer service will work. Next, he should consider how much and what type of funding to get. He might look for a loan or a capital investment, for instance. He should look at how he will generate revenue from the business and the expected profits. He needs to choose a domain name. A domain name is important because it can give consumers a preconceived notion of the business. He needs to make sure people will go to his website. He can formulate ways to promote it at places like Facebook and Twitter. He also needs to create a professional website. He can code it himself, use a template, or pay a designer. It needs to look professional and convey the right message. The entrepreneur also needs to consider how the product will be distributed. Once he launches the website, he should constantly evaluate the business and look for areas of improvement.

Strategies for Getting into Online Business
Offering goods and services at an online auction site or another marketplace site is a good way to try online business. It is very easy and inexpensive to list and sell products on these websites as much of the work is already done. In addition, the popular websites already garner many customers, and customers will see the product when they search for similar products. People may also use a social media website, such as Facebook, to promote their services. Once the entrepreneur is ready, he can create a website to sell his products. He may use blogs as well. There are many online tools that make creating a website easy, or one can hire a professional to set one up. It can be very inexpensive and easy to get into online business.

Obstacles That Internet Entrepreneurs Face
The internet business environment allows for many competitors. It can be difficult for a new company to establish itself and attract customers with all the different options available. It can be hard to gain credibility and customers' trust. There are many different legal and ethical issues that must be considered as well. Companies need to be careful about how they get data as well as how they use and share it. There are many steps in starting an online business, such as designing a website, which can be difficult. Entrepreneurs need to find a way to make their companies and websites are unique but also accessible and easy to use. There are many technological aspects to running an online business, and entrepreneurs need to make sure that everything runs smoothly. The more detailed and well-prepared the business is, the better its chances of success becomes.

Factors That Affect Success of Internet Businesses
Competition is a huge factor that determines whether an internet business will succeed. If the company has come up with something truly differentiated, it can help, but if there is a lot of competition from companies with similar offerings, it can be difficult to succeed, especially if they come from established companies. How well the business attracts investors makes a large difference. A business needs capital to start and needs to be able to attract investors. It also needs to attract customers and show that it has something special to offer above and beyond the competition. Sometimes this is a matter of being able to successfully promote the business. Even startups can do this successfully with inexpensive options such as promotions via social media. The company needs to have decent profit margins that allow for the continuation of the business. A solid business plan can help the business get off the ground.