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2. The Business Changes

An e-marketplace is not just a bazaar for parts and products

E-marketplaces allow for instant communications throughout the supply chain giving the partners a clear real-time picture of supply and demand. Suppliers can now organise their production according to the needs of the customer. Producers can check on-line the availability of raw materials or where in the world an expected delivery is. In short, e-commerce uses information to cut down the need for inventory. Producers build each computer only when a customer has ordered it.

E-commerce creates revenue streams, saves costs, and enables businesses to better manage their inventory. Traditional business is governed by complex processes, and constrained by informational inefficiencies, geography and market hours. The Internet simplifies traditional business, facilitating a single destination for commerce, content, and community. The benefits of e-commerce for SMEs can include cutting costs, saving time, reducing inventory and making electronic repetitive processes that used to be handled manually and individually (such as writing up invoices, checking inventory, entering customer names on to mailing lists, etc).

Moreover, e-commerce can put customer information directly into a database, allowing businesses to better monitor customer behaviour, market to each customer individually based on their buying habits and react more quickly to trends. And much of this can be done entirely automatically using data-mining software.

In terms of purchasing, companies can tap into a global supply base and find the best value for their needs. They can bid at electronic auctions, invite offers on their own web sites and search the web for new suppliers. On-line discussion forums allow businesses to share information with other businesses around the globe and thus to develop relationships that would not have been possible a decade ago.

Doing E-commerce

Launching an e-commerce venture can range from putting a catalogue on-line in an established electronic shopping mall to developing an individual on-line presence with custom built tools to meet the vendor’s specific needs as well as his customers’. On-line shopping malls are the least expensive and most painless, there are many of them and most of them provide “wizards” (electronic helpers) and simple tools that allow even the completely inexperienced to put together their e-shop in a matter of hours. Many of these services also provide payment services, tips and marketing support and generally costs are quite low – often less than €100 per month. Such businesses can be considered the high street shops of the Internet.

For the entrepreneur who thinks big, only an individual web presence will do. This requires hiring professionals to develop an e-commerce web site, the purchase, customisation and integration of sophisticated software, and substantial marketing budgets. The investments can be substantial – but so too can be the rewards. Fortunately, for the entrepreneur with a better idea than bank balance, venture capital can provide financial support and partnering can reduce costs.

Regardless of which path the entrepreneur chooses, once he is on-line there is a legal and regulatory framework that must be dealt with. Fortunately, it sounds more frightening than it actually is and, in many respects, following the law results in better treatment of customers. This is a good thing. Many potential e-commerce customers still lack trust and confidence in e-businesses, and existing e-commerce customers are regularly frustrated by on-line shops where they cannot find information

or which do not make processes clear. Hence, following the law can result in improved sales and improved customer relations. And that is not a bad thing.

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