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e-commerce: Roles, Advantages, Forms, e-Payments

A website following the B2B business model sells its products to an intermediate buyer who then sells the products to the final customer. As an example, a wholesaler places an order from a company’s website and after receiving the consignment, it sells the endproduct to the final customer who comes to buy the product at the wholesaler’s retail outlet.

B2B identifies both the seller as well as the buyer as business entities. B2B covers a large number of applications, which enables business to form relationships with their distributors, re-sellers, suppliers, etc. Following are the leading items in B2B eCommerce.

  • Electronics
  • Shipping and Warehousing
  • Motor Vehicles
  • Petrochemicals
  • Paper
  • Office products
  • Food
  • Agriculture

Key Technologies

Following are the key technologies used in B2B e-commerce −

  • Electronic Data Interchange (EDI)− EDI is an inter-organizational exchange of business documents in a structured and machine processable format.
  • Internet− Internet represents the World Wide Web or the network of networks connecting computers across the world.
  • Intranet− Intranet represents a dedicated network of computers within a single organization.
  • Extranet− Extranet represents a network where the outside business partners, suppliers, or customers can have a limited access to a portion of enterprise intranet/network.
  • Back-End Information System Integration− Back-end information systems are database management systems used to manage the business data.

Architectural Models

Following are the architectural models in B2B e-commerce −

  • Supplier Oriented marketplace− In this type of model, a common marketplace provided by supplier is used by both individual customers as well as business users. A supplier offers an e-stores for sales promotion.
  • Buyer Oriented marketplace− In this type of model, buyer has his/her own market place or e-market. He invites suppliers to bid on product’s catalog. A Buyer company opens a bidding site.
  • Intermediary Oriented marketplace− In this type of model, an intermediary company runs a market place where business buyers and sellers can transact with each other.

Advantages to Organizations

  • Using e-commerce, organizations can expand their market to national and international markets with minimum capital investment. An organization can easily locate more customers, best suppliers, and suitable business partners across the globe.
  • E-commerce helps organizations to reduce the cost to create process, distribute, retrieve and manage the paper based information by digitizing the information.
  • E-commerce improves the brand image of the company.
  • E-commerce helps organization to provide better customer services.
  • E-commerce helps to simplify the business processes and makes them faster and efficient.
  • E-commerce reduces the paper work.
  • E-commerce increases the productivity of organizations. It supports “pull” type supply management. In “pull” type supply management, a business process starts when a request comes from a customer and it uses just-in-time manufacturing way.

Advantages to Customers

  • It provides 24×7 support. Customers can enquire about a product or service and place orders anytime, anywhere from any location.
  • E-commerce application provides users with more options and quicker delivery of products.
  • E-commerce application provides users with more options to compare and select the cheaper and better options.
  • A customer can put review comments about a product and can see what others are buying, or see the review comments of other customers before making a final purchase.
  • E-commerce provides options of virtual auctions.
  • It provides readily available information. A customer can see the relevant detailed information within seconds, rather than waiting for days or weeks.
  • E-Commerce increases the competition among organizations and as a result, organizations provides substantial discounts to customers.

Advantages to Society

  • Customers need not travel to shop a product, thus less traffic on road and low air pollution.
  • E-commerce helps in reducing the cost of products, so less affluent people can also afford the products.
  • E-commerce has enabled rural areas to access services and products, which are otherwise not available to them.
  • E-commerce helps the government to deliver public services such as healthcare, education, social services at a reduced cost and in an improved manner.

E-Payments

An electronic payment (e-payment), in short, can be simply defined as paying for goods or services on the internet. It includes all financial operations using electronic devices, such as computers, smartphones or tablets.

E-payments come with various methods, like credit or debit card payments or bank transfers. Note that one of the most popular and common online payment methods nowadays are credit cards.

How e-payment works?

Online payments are made instantly, so it’s convenient and saves lots of time. It is important, especially today when every aspect of our lives happens at a fast pace. The entire process behind the payment button is complicated, so here’s the basics to make you understand it better.

  1. Customer action– The process begins when a customer visits the merchant’s site and adds to the cart items (products or services) they want to buy. They, then need to fill out the payment form with certain information (e.g. card number, expiration date, CVV code, address). Depending on the payment method, the customer is either redirected to external service or bank’s website or continues the payment on the website or in an app.
  2. Payment authentication by the operator– The payment gateway (with other parties involved) checks whether the payment information is valid. If everything’s OK, the process continues and the payment gateway reports back the successful transaction. After that, the customer receives a payment confirmation — the notification is usually displayed in real-time.
  3. Payment to the seller’s account– An online payment provider receives a payment from a customer’s bank and transfers it to the merchant’s account.

In general, e-payments are considered a fast and secure alternative to traditional payment methods, such as bank transfers, checks, etc. Accepting electronic payments comes with lots of benefits for both merchants (of any size) and consumers.

Moreover, electronic payments are highly effective for international transactions. It is generally cheaper, easier and faster than other payment methods. As a merchant, you don’t have to worry about currency conversion or high commission.

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