Class 5 - Introduction to E-Commerce , Sales and Marketing

Electronic Commerce -  is the given name  to a marketplace on the Internet. Similar to a traditional market place, it consists primarily of the distributing, buying, selling, marketing and servicing of products or services over the internet.

E-commerce is based with web application software that facilitate commercial transactions; such as a shopping cart, credit card processing, online marketing, online transaction processing, electronic data interchange (EDI), automated inventory management systems and automated data collection systems.

E-commerce includes:

• A place to sell products or services. A Web site displays the products in some way and acts as the place to sell them.
• A way to get people to come and see your products.
• A way to accept orders - normally an on-line form.
• A way to accept money - normally a merchant account handling credit card payments. This piece requires a secure ordering page and a connection to a bank, you may also use more traditional billing techniques either online or through the mail.
• A fulfillment facility to ship products to customers (often outsource-able). In the case of software and information, however, fulfillment can occur over the Web through a file download mechanism.
• A way to accept returns.
• A way to handle warranty claims if necessary.
• A way to provide customer service (often through email, on-line forms, on-line knowledge bases and FAQs, etc.)

·        In addition, there is often a strong desire to integrate other business functions or practices into the e-commerce offering. An extremely simple example -- you might want to be able to show the customer the exact status of an order.

E-commerce is a fast growing industry. According to the October 2006 Forrester Research report entitled, "US eCommerce: Five-Year Forecast And Data Overview, "Nontravel online retail revenues will top the quarter-trillion-dollar mark by 2011.”

Internet Marketing

After you plan and build up your e-commerce web site, you need to market it in order to attract visitors and prospective customers.

Internet marketing is referred to as online marketing. This is a form of marketing that exclusively uses the world wide web as means and media. This new type of  marketing is unique because it offers low cost advertising and lower cost in publishing information and media to a mainstream audience.

Internet marketing provides instant response, you don’t have to wait for years to build up a name recognition. The day the ad is placed in a search engine, the clicks will start pouring to your site.  The internet also allows retailers to display the picture of the products and provide a lengthy narration about its qualities.

There are many Internet marketing methods, some are more effective than others. They  include: search engine marketing, display advertising, e-mail marketing, affiliate marketing, interactive advertising and viral marketing.

A search engine is an information retrieval system designed to help find information stored on the World Wide Web. The search engine allows one to ask for content meeting specific criteria  and retrieves a list of items that match those criteria. Search engines use web crawler to identify new urls  from the Internet.

A web crawler  (also known as a Web spider or Web robot) is a program that browses the World Wide Web in a methodical, automated manner to lookup for new pages. Web crawlers are also called ants, automatic indexers, bots, and worms. Web crawlers are mainly used to create a copy of all the visited pages for later processing by a search engine that will index the downloaded pages to provide fast searches. This process is called Web crawling or spidering.

Search Engine Marketing is a form of Internet marketing that seeks to promote websites by increasing their visibility.  SEM methods include: Search Engine Optimization, paid placement and paid inclusion.

Banner or Banner Ad is an online advertising where you can ask a web master to place an advertisement into a web page. It is intended to attract traffic to a website by linking them to the web site of the advertiser. To be effective the banner must be placed on web pages that have interesting content, such as a newspaper article or an opinion piece.

Affiliate Marketing is another method used to promote web businesses (merchants/advertisers) in which an affiliate (publisher) is rewarded for every  sale provided through his/her efforts. Affiliate marketing  is the act of driving prospective customers to an e-commerce site. It is also the name of the industry where a number of different types of companies and individuals are performing this form of internet marketing,

Affiliate marketing includes search engine optimization, paid search engine marketing, email marketing and to some degree display advertising.

Affiliates can also be referred as publishers.

Sometimes an affiliate marketers can actually be the e-commerce web site that actually sells the products and services. The advantage of this method of marketing is that it cuts out the middleman but it does require the affiliates to have a high degree of trust in the software and people behind the e-commerce web site in question.

Affiliate Networks acts as intermediaries between publishers (affiliates) and (merchant) affiliate programs. It allows publishers to find affiliate programs, which are suitable for their website and it helps websites offering affiliate programs reach its target audience.  For example, bostondigitalmarketing powers more than 250 sites with affiliate programs that generate more than 1 million dollars in sales annually.

The networks are free to join for affiliates. The merchant on the other hand has to pay a fee. Traditional networks might charge an initial setup fee and/or a recurring maintenance fee. This differs from network to network. It is common for affiliate networks to charge merchants a percentage of the commission paid to the affiliates as fee for their services.  

Traditional affiliate networks allow the merchant to offer its publishers revenue share or cost per action as compensation method. The majority of merchant programs prefer revenue share over cost per action .  

Merchant Services can include providing tracking technology, reporting tools, payment processing and access to a large base of publishers. For affiliates, services can include providing one-click applications to new merchants, reporting tools, and payment aggregation.

Viral Marketing and Viral Advertising refer to marketing techniques that use pre-existing social networks to produce increases in brand awareness, through self-replicating viral processes, analogous to the spread of pathological. It is claimed that a satisfied customer tells an average of three people about a product or service he/she likes and eleven people about a product or service which he/she did not like. Viral marketing is based on this natural human behavior.