Background of E-commerce

What's E-Commerce?‍‍‍‍‍‍‍

xxxxxSimply put, E-Commerce is the buying and selling of goods and services over the internet with the use of a web browser. This process of buying and selling also includes the developing, marketing, selling, delivering, servicing and paying for products and services. The processes of electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems are all used when preforming transactions via E-Commerce (Electronic commerce, 2011).




xxxxxThe first online stores were basically built by slapping a client server on top of an existing business system. One exposed it to the World Wide Web and the user crossed their fingers. It was a big application running on servers, requiring big resources just to manage and maintain. However, one can say that they owned it.
xxxxxEver since the rapid emergence of E-commerce, transaction based activities such as gathering information on banking, marketing,scheduling, distributing, retailing, negotiating, auctioning, shopping, and trading are experiencing quick changes. Aside of that, Social media like Facebook or Myspace really hyped E-commerce itself. The odd style for advertising and promoting througout many websites like the two mentioned above really impacted many. According to many online business owners (Roggio, 2009), promoting a stores brand via social networking increases site traffic. Here are more stepping stones that made E-commerce so gigantic according to the Software & Information Industry Association (Koerwer, 2007):

  • Google (1998): A resourceful search engine.
  • Online Advertising
  • Wi-Fi 802.11 (1997): Connecting to the internet without cables/wires.
  • Youtube (2005): A website where many amateur videos are uploaded every day.
  • iTunes (2001): This software popularized sales for legal music downloads.

xxxxxCreating more exposure for the company and possibly gaining more insight on what customers really want. The great thing about E-commerce is that one may shop at his/her leisurely time, especially in pajamas. As for a brief history for E-commerce goes; It had all started with the old form of “Sell and buy”. One would have the possibility to go store hopping and find the most affordable price out of the bunch. However, this took a good amount of time out of the consumers’ time for shopping. A way E-commerce fixed that little problem is by became mainstream and hitting the public in 1991 when the internet had just opened for commercial use. Consumers were then given the ability to create electronic transactions with the help of leading technologies such as Electronic Funds Transfer (EFT) and Electronic Data Interchange (EDI)(James, 1999).


xxxxxE-commerce was launched publicly on March 4, 1984 and was recorded to go down in history as the first data upload. The man behind the plan was the founder of Boston Computer Exchange (Boston Computer Exchange, n.d.), Alex Randall. That was to be one of the first and ongoing examples of E-commerce. However, one big factor that accounted for the success of an electronic company was internet speed. E-commerce in 1994 started to accelerate with high speed internet. It first started with dial-up, follow by DSL, cable, T1, broadband, and now WAP (Wireless Application Protocol) for mobile devices. However, since E-commerce was relatively new, especially on the web, there were many things that had to be held accountable. Here are two topics in where importance was shown:

Government Regulations

xxxxxAccording to E-commerces history (E-commerce, 2008), there were many activities that E-commerce had to come accross with. The Federal Trade Commision (FTC) regulated the use of commercial e-mails, online advertising, and consumer privacy. Another government regulation that was sorted was the 'CAN SPAM Act of 2003' (The CAN-SPAM Act, n.d.) in where it establishes a set of rules for commercial email. This gives consumers the right to stop emailing them. Also, the FTC regulates all form of ads (even if they're online or not) in where the adversting can not be false. According the Michigan Legislature (Michigan Legislature - Section 750.33, n.d.), the penalty for false advertisement is imprisonment for not more than a year or a fine not more than $1,000.00.


xxxxxThe Internet Tax Freedom Act of 1998 (Nellen, 1999) claimed to impose transactions involving the internet. So this law did not affect sale taxes to online purchases, but taxing in varying ways. Some of those ways are by mail orders (i.e: Shipping and Handling) or by phone.

xxxxxThese certain laws on behalf of the U.S., creates a balance to the nations financial spending. This makes companies play fair with a consumer. However, there are companies that present themselves to be among the elite. One of those companies that set the pioneering stone for E-commerce was Amazon. reigns as one of the heavyweight websites in the world. Selling prominent books/e-books, music, computers, anything that is electronics based, sport material and such. There business model relied in warehousing and it took approximately nine years to launch the companys first annual profit in 2003. Fun Fact: Jeff Bezo (founder of was Time magainze's "Person of the Year" award. Commemorating Mr.Bezo as the most recognizable figure in the E-commerce community.

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Transition statement: The next page will talk about the impacts of E-Commerce.

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