An Example of an E-commerce Success and its Causes

E-commerce is a system used to conduct business transactions of buying and selling goods and services over a computer network. There are various strategies for the E-commerce to be success. The strategies reasons for success may focus on the marketing, promotional and product or service strategies of the company.

One of the companies’ successes in the E-commerce is Amazon.com. It was launched in 1999 which is an online auction house. There are other same kind of retailers emerged in electronic commerce but Amazon.com was success as best know of E-commerce despite the highly challenging and competitive environment faced by the E-commerce.

The cause of success for Amazon.com is because its informative environment is developing with a strong basic of market knowledge that is customer competition. Beside that, a strong communication and persuading relation with each customer is strongly emphasized in Amazon.com. Thus, Amazon.com able to handle the emerging challenges in market and used the advanced tools to overcome those challenges. At the same time, Amazon.com is able to maintain the balance between the relationship of the company and customer.

Other than that, Amazon.com governs the internet business with the best marketing techniques such as free shipping of product. It also able anticipates the market position, trends and fulfills the demand of its customers. Therefore, it is the favorite website to most of the users. In addition, it is the only website that contains the web books, business brands and retails on a single web-based business. Thus, Amazon.com does not only leads to sale books but also offer a variety of electronic items as well as gifts, video, music, wireless mobile phones, kitchen utensils, health and fitness, automobile, house holds, software, hardware and other. As the result, its items are suitable for all stage of people.

Beside that, Amazon.com continues to invest in the several areas of technology which including the seller platforms, web services and digital initiatives. It is because they want to improve their E-commerce process efficiency and support their infrastructure web service so that the server would not down when too much people visit the website.

In the nutshell, clarify the company key objectives as well as effective coordination in the operation is important for Amazon.com to sustain huge business benefits and success in E-commerce.

An Example of an E-commere Failure and its Causes

Many newly formed DotCom companies around the world failed in year 2000. This is because the market with similar products or services has created intense competition among themselves. The causes of failure can be separated into controllable and uncontrollable causes. The controllable causes can be further divided into strategic, operational and technical causes while uncontrollable can be divided into technical and behavioral causes.

Furniture.com is one of the example of an E-commerce failure. It was a company that sold furniture and other household amenities online. Under controllable causes, Furniture.com failed to make the optimum decision as the entrepreneurs lacked a clear understanding of business fundamental in the areas of finance, marketing, distribution, inventory and other. As a result, Furniture.com had insufficient back-end operations to support front-end demands.

Beside that, Furniture.com was wrongly focused on spending pattern to support or initiate high growth. Thus, they had overspent on marketing and IT infrastructure in an attempt to grow quickly. As the result, it did not pay proper attention to the product differentiation, product quality and back-end infrastructure to support front-end sales and after-sales services. Finally, it suffers a huge loss. For example, according to Securities and Exchange Commission documents filed by Furniture.com, the company generated revenue of $10.9 million in 1999 but loss $46 million because it spent $33.9 million on sales and marketing which was three times the cost of product development, general and administrative expenses combined.

Then, delivery system in Furniture.com is slow. This is under operational cause which the business mainly closed due to its logistics problems. In addition, it often sent the wrong products which resulted in paying extra cost for pick-ups, refunds and reordering. Furthermore, Furniture.com often do not turn up their promised. Hence, shoppers felt irritating and turning them away from the company’s business.

Other than that, server down is the technical cause that makes Furniture.com failed. The web servers often run with interruption. Long server down time in Furniture.com cause the customers quickly lose their interest when they visit the website.

As the result, an E-commerce company must be aware of their delivery and server services. Then, the entrepeneur should have the fundamental knowledge of business in order to manage the company well and sustain in the E-commerce.

The History and Evolution of E-commerce

Electronic commerce (E-commerce) is a process of buying and selling products or services or information over the computer networks. It is a technology mediated exchange between an individuals or organizations. Before the e-commerce being developed, it has been gone through several steps of development and evolution.

Initially, there are not much people having computer. Thus, only cash, check and credit card being used in the daily transaction. E-commerce was started in the early 1970s which allows organizations to transfer funds between one another electronically. Then, Electronic Data Interchange (EDI) has been developed to exchange the business information and do electronic transactions. However, most of the company still unable to interact with each other as there was several different EDI formats that a business could use. Beside that, it is costly and complex to administer for the small business. Thus, EDI not widely accepted. ASC X12 standard has been introduced in 1984. It is more stable and reliable in transferring large amounts of transactions.

In 1992, the Mosaic web-browser was made available. It was the first ‘point and click’ browser. After that, Mosaic browser was adapted into a downloadable browser, Netscape which allow access to E-commerce easily. It provides the users a simple browser to surf the Internet and a safe online transaction technology known as Secure Sockets Layer. Amazon.com and eBay were then launched.

Digital Subscriber Line (DSL) which was another development of E-commerce after that moment. It allowed quicker access and persistent connection to the internet. This has encouraged people to spend more time online. Then, another major step in E-commerce growth was the Red Hat Linux. It has given the users another choice in a platform other then Windows.

Other than that, AOL (known as online software suite) and Napster were also the major development of the E-commerce. In early 2000, AOL and Time Warner merge and they push for the E-commerce. At that time, many people start to make transaction through E-commerce. This is because people are educated and the living standard has been increase. Hence, more people own computer. Beside that, it is more convenient as the users’ only need to sit at home and all the transaction can be done.

Nowadays, the largest E-commerce is Business to Business (B2Ba). This form of E-commerce had around $700 billion transactions in 2001 by selling their goods to other businesses. It has increase from year to year. The other forms of E-commerce which are growing include Consumer to Consumer (C2C) and Peer to Peer (P2P). In future, there will be more and more people and organization using E-commerce as technology become more advance.