E-commerce: a marketplace for dealing transactions

Background of E-commerce

Electronic commerce is a type of business where the Internet or the Web is used as a marketplace for dealing transactions. In e-commerce, digitally enabled commercial transactions are commonly engaged between and among organizations around the world. Digitally enabled transactions refer to transactions that occur over the Internet and the Web with the help of digital technologies. Commercial transactions refer to transactions where money is involved for exchange of products or services. No commerce occurs when no money is being exchanged (Landon and Traver, 2007).

Since we are in the world where technologies and new innovations are fast emerging and e-commerce being the next big strategy for companies to gain more market shares, increase profit, target consumers, and satisfy their needs and wants, several potential hackers have also thrived their way into the information age era. In that case, the Philippines have adopted a bill where consumers can enjoy some form of protection over the Internet. Some of these consumer-oriented points are included in the bill: First, in cases of no deliveries or wrong deliveries, consumers can file a lawsuit where admissible electronic evidences will be acted upon by the judge. Second, since contracts can be stored electronically, encryption technologies should see to it that it is kept at its original and unaltered form. Lastly, Internet service providers are not permitted to change messages sent through them otherwise they would have to bear the consequences (Rodica, 2000).

There are five major types of e-commerce namely Business-to-Consumer (B2C), Business-to-Business (B2B), Consumer-to-Consumer (C2C), Peer-to-Peer (P2P), and Mobile Commerce (M-commerce). B2C is a type of e-commerce where businesses sell their products online to individual consumers just like Amazon.com where consumers can visit their site and select which product they wish to buy and purchase online. B2B is a type of e-commerce where businesses sell their products to other business or in other words they act as a supplier to other business that sells the same line of products. C2C is a type of e-commerce wherein consumers sell their products to other fellow consumers facilitated by an online market maker. C2C works this way: The consumers prepare the product they plan to auction or sell. Consumers then rely on the market maker to provide and organize necessary records, search engine, and methods to make the transaction process fast so that products can be easily displayed, searched, and paid for. One example of this is eBay.com. P2P is an e-commerce that allows internet users to share files, such as music, across the Internet without a market maker. M-commerce is an e-commerce where wireless digital devices are used to enable transactions over the Internet (Landon and Traver, 2007).

Though e-commerce can contribute a lot in a company's profit, however, it is also hard to manage and may lead to failure when e-business strategies are not carefully and wisely planned.

Origin of E-commerce

Electronic commerce started in the early 1970s by performing business deals using technology wherein Electronic Fund Transfer and Electronic Data Interchange was first introduced, these two technologies became the root of e-commerce's success or they made e-commerce possible by generating a massive growth of e-commerce in the field of business and allowing firms to exchange commercial documents and run digital commercial transactions across private networks (McCue, 2006). Most people thought that it only started during the late 1990s, but they did not realize that e-commerce had been around for about forty years. During the year 1994, e-commerce began to expand rapidly through the development of networks, protocols, softwares and specifications; one of the examples is the Digital Subscriber Line or DSL which allows faster and better connection and also online transaction capability. The first widespread use of the Web to advertise products was during the year 1995; since then, e-commerce has been the fastest growing form of commerce in the United States (Turban, Lee, King, Chung, 2000).

As e-commerce began to emerge between the years 1998 and 2000, numerous companies already had their first e-commerce websites, especially in the United States. “The birth of companies such as eBay and Amazon (launched in 1994) really began to lead the way in e-commerce. Both eBay and Amazon were among the first to establish prominent e-commerce brands” (Bill, n.d.). Until now, there are still a number of business firms around the world who have their own e-commerce websites.


This research paper aims to find out the advantages and disadvantages of having an e-commerce type of business, the challenges that an e-commerce enterprise would likely to encounter, and how it helps maximize the company's sales and profit. To provide precise answers to our intriguing questions, helpful sources from books, periodicals, journals, and the Internet were used. In addition to this, we have also conducted an interview to provide us with more information and likewise enrich our paper.

E-commerce enterprises have the most competitive advantage since it has no limitations in reaching the global market and satisfying market demand. Business is still on the go at anytime of the day and whole year round, may it be on a holiday or on a weekend. Geographical boundary is not a hindrance in this business since network is established worldwide and communication is enhanced. Though this type of business may look promising, certain circumstances may still arise and hamper the smooth flow of the business. In that case, strategies should be discussed and carefully planned out so that wise decisions can be made right away so as not to prolong unwanted circumstances that may harm the business.

Since thousands of people shop online, demand is also increasing at a very fast pace which makes electronic entrepreneurs interested in entering this type of business; even small businesses find e-commerce very rewarding.


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3. McCue, S.S. (2006). Farce to force: Building profitable e-commerce strategies. Ohio: Thomson Higher Education.

4. Landon, K.C., & Traver, C.G. (2007). E-commerce: Business. technology. society. (3rd ed.). New Jersey: Prentice Hall.

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8. Andam, Z.R. (2003). E-commerce and e-business. Retrieved February 3, 2010 from the World Wide Web: http://www.eprimers.org. & http://www.apdip.net.

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10. An introduction into e-commerce. Retrieved February 4, 2010 from the World Wide Web: http://www.marcbowles.com/sample_courses/amc/ec1/ec1_3.htm

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