E-commerce Study Guide

📖 Core Concepts Electronic commerce (e‑commerce) – Buying or selling goods/services over the Internet using digital platforms. Core technologies – Mobile commerce, electronic data interchange (EDI), online transaction processing, digital payment gateways. Business models – B2B, B2C, B2G, C2B, C2C, D2C (direct‑to‑consumer). Transaction categories – Online retailing (storefront), electronic markets (multi‑seller platforms), online auctions (real‑time bidding). Regulatory framework – FTC (U.S.), CAN‑SPAM, EU competition rules, UNCITRAL Model Law. Supply‑chain integration – E‑commerce links product, financial, and information flows; ERP systems (e.g., SAP, Xero) coordinate them. Dropshipping – Seller forwards order to supplier; no inventory held by the retailer. 📌 Must Remember U.S. e‑commerce sales 2020 → > $29 trillion (global). Mobile share projection – 25 % of all e‑commerce sales by 2017. CAN‑SPAM Act (2003) – Sets national standards for commercial email. Dropshipping advantage – Lower inventory cost, faster product range expansion. “Retail apocalypse” – Massive closures of brick‑and‑mortar stores driven by online competition. COVID‑19 boost – U.S. online sales +25 %; online grocery sales > 2×. 🔄 Key Processes Online purchase workflow Customer browses → adds items to cart → proceeds to checkout → payment authorization (online transaction processing) → order confirmation → fulfillment (warehouse → shipping) → delivery tracking. Dropshipping flow Retailer receives order → forwards order & payment details to supplier → supplier ships directly to customer → retailer handles after‑sale service. Electronic data interchange (EDI) Standardized document creation → secure transmission → automatic receipt → integration into ERP → updated inventory/financial records. 🔍 Key Comparisons B2B vs. B2C – B2B: larger order volumes, longer sales cycles, focus on relationship contracts; B2C: many small orders, emphasis on user experience & marketing. Online retailing vs. Electronic market – Retailing: single seller brand, fixed catalog; Market: multiple sellers compete, price discovery dynamic. Dropshipping vs. Traditional warehousing – Dropshipping: no inventory cost, slower control of shipping; Warehousing: higher inventory cost, faster fulfillment & returns handling. ⚠️ Common Misunderstandings “All e‑commerce is B2C.” – Ignoring B2B, B2G, C2B, C2C, D2C which together drive the majority of transaction volume. “Mobile sales are negligible.” – Mobile now accounts for 25 % of sales and is growing rapidly. “E‑commerce eliminates logistics.” – Fulfilment, warehousing, and last‑mile delivery remain critical; large firms outsource to third‑party logistics. 🧠 Mental Models / Intuition “Digital pipeline” – Think of e‑commerce as a three‑lane highway: product flow, payment flow, information flow all move together, coordinated by ERP/EDI. “Marketplace as a match‑maker” – An electronic market’s core job is to pair many buyers with many sellers, similar to a dating app algorithm. 🚩 Exceptions & Edge Cases Cross‑border e‑commerce – May face customs, taxes, and differing consumer‑protection laws (e.g., EU competition monitoring). Regulatory exemptions – Small‑scale sellers sometimes qualify for reduced reporting under certain national laws. COVID‑19 surge – Post‑pandemic, some “temporary” online habit changes may revert; expect a mixed‑channel future. 📍 When to Use Which Choose B2B platform when transaction values are high, repeat orders, and integration with ERP is needed. Use B2C storefront for brand‑centric sales to individual consumers with strong marketing focus. Adopt dropshipping if you lack capital for inventory but can manage supplier relationships and customer service. Deploy a marketplace when you want to aggregate many third‑party sellers and benefit from network effects. Implement mobile commerce for target audiences that primarily use smartphones (e.g., Gen Z, emerging markets). 👀 Patterns to Recognize Revenue spikes → major events (e.g., COVID‑19, holiday seasons) often correlate with increased online sales. High cart abandonment → checkout friction – look for multiple steps, lack of payment options, or security concerns. Rapid growth in a region → infrastructure investment – e.g., mobile‑first markets invest in 4G/5G to capture e‑commerce share. 🗂️ Exam Traps “Only B2C matters for e‑commerce.” – Exams often test knowledge of all six business models. Confusing “electronic market” with “online retailing.” – Markets match many sellers/buyers; retailing is a single‑seller storefront. Assuming dropshipping always lowers costs. – It can increase shipping times and reduce control over product quality, which may hurt margins. Over‑stating mobile’s share before 2017. – Data show mobile reached 25 % by 2017; earlier figures are lower. Mis‑attributing regulation – CAN‑SPAM governs email; FTC Act governs truthfulness of all ads, not just email. --- Review this guide a few minutes before the exam – the bullets are designed for rapid recall and confidence.