E-commerce, or electronic commerce, is the buzzword in today's business world. A recent study by an international consulting group reveals that online sales are growing at 230 percent per year. What is e-commerce? How can your company benefit? Should you too jump into it?

What is E-Commerce?
E-commerce can be defined as conducting business transactions through electronic means over either exclusively-owned or open networks, such as the Internet. E-commerce has been around for quite sometime in Singapore, an example of which is TradeNet, which was launched in 1989. The explosion of the Internet and its associated technologies in the 1990s has fuelled the rapid adoption of e-commerce. The success of Amazon.com and Dell.com in the States prove that e-commerce is the way of doing business today.

Broadly speaking, e-commerce can be classified in two categories. Business-to-Consumer (B-to-C) is the case where the company directly sells goods to the customer, who then pays over the network (usually the internet) using a credit or cash card. Business-to-Business (B-to-B) e-commerce involves the conduct of electronic transactions between two organisations, which may not necessarily involve the transfer of funds.

How to benefit from e-commerce?
One of the main issues that small businesses face today is the high level of competition, especially from the big players. Large corporations, with its vast amount of resources, talents and knowledge, can pose a real threat to any small business. The Internet presents a viable platform for the small business to at least compete on a similar level.

There are many benefits for a small business to adopt an Internet strategy and to maximise the use of the Web to its best advantage.

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Savings in printing, publication and distribution costs Hardcopy collaterals that require frequent updates generally incur volume-related, high printing costs. Publishing such materials on the Web can result in substantial cost-savings.

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Better use of employee time Putting information on the Web where visitors can serve themselves helps to reduce employee time spent dealing with information requests. Customer service levels are also enhanced as staff need only respond to exceptional customer requirements, thus freeing them for other productive purposes.

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Physical presence vs virtual presence Until the expansion of the Internet, access to new markets often involved setting up retail outlets, a branch network or a direct sales force. The cost of building an effective interactive Web site is good value for money when compared to physical market entry strategies. A Web site can be a small business' best salesman. A good Web site can be selling twenty-four hours a day, seven days a week, or whenever it is convenient to the customers.

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Electronic Mail Email is one of the important components of an Internet strategy that will certainly benefit small businesses. Like the phone and fax, customers and suppliers expect to be within reach any time of the day. Email encourages communication and collaboration between people, regardless of geographical boundaries. Email addresses can also be left on Web sites to invite visitors to post queries.

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Enhanced marketing, customer service and support For small businesses running on a small headcount, having a Web site for customers to access useful product or service information can reduce the need for a large marketing, customer service and support team.

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Teleworking The Internet provides the opportunity for employees to work remotely, on client site or from home. Teleworking can be implemented easily through new Web and WAN technologies. This helps a small business plan and use limited office space more effectively.

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Presenting information to customers on the complete range of product and service offerings.

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Allowing customers to request for quotations, place orders, track shipments and process payments.

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Allowing suppliers to access inventory levels of the company, and hence automatically invoking purchase orders once stock levels run low.

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Promoting the use of electronic payment and funds transfer.