Online auction has grown significantly every year that online shopping website has been available. As an example Ebay.com is one of the popular acution websites where users can get products for low price. But Before bidding for a product, both seller and buyers should consider some aspects. Fraud might be conducted by customer or by sellers. Some time consumers may send fake checks or fake account details to the sellers. But most of the fraud cases are conducted by sellers. According to the statistics of National Internet Fraud Watch Information centre, most of the internet frauds are based on online fraud, which consist of 45% of the total online frauds reported in year 2005.
In online auctions, buyers compete to grab desired products for low price. But before going to bid, we should consider that sellers play some tricks to lure the buyers.
I. Bid shielding: Bid shielding is one of the ways to mislead the real bidders. Fake bidders starts bidding with very high price and they drop from the bidding at last minute. The real bidder who bid for low price would win the bid and he needs to pay for it. All this is just to mislead the real buyer’s concentration to their products.
II. Shilling: In shilling, sellers arrange fake IDs and start bidding as buyers. The real bidders lure to the particular product and they bid it for little bit high amount than previous. In this way sellers get more benefit.
III. Hidden shipping costs and handling fee: Sellers hide the real shipping cost and handling fee. By the time buyers get the product, they might need to pay more than they expected.
IV. Failure to deliver: Sometimes buyer will never get the product even after he/she paid for it. This is an old type of cheating method.
V. Damage and loss claims: This type of frauds might be from buyer’s side. Buyer tries to claim new product or refund by reporting the seller that they never got products or they got damaged product. Sometimes seller cannot prove the delivery of product.
Below are some prevention methods for the e-auction fraud:
Escrow Services
Escrow Services are intended to ensure security by acting as a middle-man in transactions where the two parties do not trust each other. Rather than sending money or goods directly to the other party, the buyers send their money to the escrow service, which will holds them until the buyers receives the purchased item and then the escrow service will sends the money to the sellers. If either party fail to deliver their part of the deal, the money will be held at the escrow service and eventually returned to the buyer.
Insurance Policy
Which is the insurance service that offers by the auction websites in order to protect both buyers’ and sellers’ losses in the fraud case occur. For example, eBay offers insurance underwritten by Lloyd’s of London at no cost to eBay users.
Appraisal Service
Appraisers use a variety of methods to appraise items, including expert assessment of authenticity and condition and reviewing what comparable items have sold for in the marketplace in recent months. An appraised value is usually accurate at the time of appraisal but may change over time as an item becomes more or less popular in the marketplace.
Verification System
One way of confirming the identity and evaluating the condition of an item is through verification. With verification, neutral third parties will evaluate and identify an item through a variety of means. For example, some collectors have their item “DNA tagged” for identification purposes. This provides a way of tracking an item if it changes ownership in the future.
Feedback forum
Which is the feedback system allows registered buyers and sellers to build up their online trading reputations. It provides users with the ability to comment on their experiences with other individual
Reference:
http://www.ecommerce-digest.com/internet-fraud-report.html
http://www.ecommerce-journal.com/articles/beware_of_e_auctions
http://www.fbi.gov/majcases/fraud/internetschemes.htm
http://www.crimcheck.com/background-check-news/whats-internet-auction-fraud-and-how-do-i-prevent-it http://wps.prenhall.com/wps/media/objects/260/267260/online_appendices/Turban-Appendix2A.pdf
http://en.wikipedia.org/wiki/Internet_escrow
Tuesday, February 17, 2009 by
Ivan
, under
Week 6
I had reviewed a post from My E-Commerce blog recently. From the blog, I found that Malaysian Government are trying set up new rules for those cybers cafe with a fixed business hours.
In the effort to implement these new rules to them, the government have to provides some new guidelines to be enforced soon to the company which operates cyber or internet cafe. There are a few guideline to do so which consists of :
1.Have to close by midnight daily.
2.Banned from using tinted glasses in their premises. (the interior must be able to see through from the outside)
3.Only allowed to operate from the ground floor.
4.Those under 12 years old must be accompanied by parents or guardian and only allowed to stay up to 10.00pm.
5.Prohibited from providing gaming activities, gambling, pornography, music and publications
with negative element.
6.Cigarettes and alcohol to be prohibited from being sold and also not to be sold to children
under 18 years old.
7.A book log to record the entry and departure time of the patrons.
The government implement these strategies are to prevent the cyber cafe turning into social ills which will affect the peoples behaviour and the safety of society. As my concern, many of the students or children will go to these cyber cafe to play games. Unfortunately, some of cafes just wanted to earn a positive income and just provides packages for the students. In the end, those student will not carry up their education as well and just keep staying at cyber cafe.
Without a fixed business hours, I wonder that how cyber cafe can be survive. In Malaysia, most of the cafes are operates at night or even till 24 hours. Eventhought is on 1
am, yet the cyber cafes are still full of peoples. Many of them wants to play online games or through LAN games. I guess if the government strongly practise them to operates on the time selected. Most of the cyber cafe will colapse or closed. But indirectly, some of them may still can be operates well because they may operates in the underground or given "protection" by the police.
Prepaid cash cards are plastic cards, which fall under the pay first category of plastic payments. It can be used to transfer electronic payments in online or offline system for exchanging of goods and services and even to withdraw money. The users need to top up money into the card before they use it. The amount to be paid will be deducted from the value. Hereby, prepaid cash cards are designed to be used as a safer alternative as compare to cash.
Nowadays people tend to own a prepaid cash card, because there are numerous benefits to the prepaid card:
Remain in control of one’s money, keep track all of activity online or by phone.
Free balance alerts –Some card providers will inform users on how much cash they have.
Eliminate check cashing fees and enjoy immediate access to your money through direct deposit of your paycheck, government payment or other income sources, no bank account needed.
Avoid bounced check fees; always know exactly how much money you have to spend. The prepaid card can help protect you from over spending.
Besides, prepaid cash cards are being convenient for consumer because it can be use in several ways.
Pay bill – Rent, utilities, insurance, car payment, and cell phone bills can be paid instantly.
Shop anywhere as long as the card using is accepted at different retailers, buys fuel at the pump, pay by phone, and shop on the Internet.
Get cash at ATMs, any time of the day, and any day of the week.
Transfer money – For some prepaid cash card they provide the convenient such as send or receive money via bank wire transfers, between two cards.
Pay for toll, or public transport – As an example, Touch’ n Go card in Malaysia. It can be used for paying any toll fee in the city or even highways. Besides, it can be used in some selected parking sites and theme park as well.
Example for prepaid cash card:
Tune Card
The Tune Card is a prepaid Visa card. It’s a reloadable card that allows user to spend only what you have pre-deposited into their account. If they’re not too crazy about debt but don’t relish the thought of carrying around loads of cash, a prepaid card is what they’re looking for.
Touch` n Go
Touch `n Go uses contactless smartcard technology. The card looks similar to a credit card. User can continue using the card as long as it is pre-loaded with electronic cash. User can reload the card at toll plazas, train stations, Automated Teller Machines, Cash Deposit Machines, Petrol kiosks and at authorised third party outlets. Reload denomination is ranging from RM20 to RM500.
Octopus Card
The octopus card one of a very common prepaid cash card which launched in Hong Kong. It launched in September 1997 to collect fares for the territory’s mass transit system, the Octopus card system is the first contactless smart card system in the world and has since grown into a widely used payment system for virtually all public transport in Hong Kong.
Reference:
http://en.wikipedia.org/wiki/Stored-value_card
https://www.tunemoney.com/
http://www.touchngo.com.my/
http://www.octopuscards.com/
Electronic Currency also known as Electronic Money, Electronic Cash, Digital Money or Digital Cash refer to money or scrip which is exchanged only electronically. The emerge of electronic currency is because of the Internet and E-Commerce become an increasing commercial area. So that, electronic payment become one of the important feature between customers and sellers. Traditional payment include credit cards, private label debit cards and charge cards. However, problem arise for these traditional form of payment online. First of all, not all merchant acre accept credit card transactions because of service fee for each transaction. In addition, customers have become with “hackers” obtaining their credit card number stored on the Internet and become the victim of fraud. As a result, electronic currency are receiving attention from both customers and merchants.
How Electronic Currency Works?
Electronic currency is a system that allows a person to pay for goods or services by transmitting a number from one computer to another. The transaction is carry out electronically by transferring funds from one party to another by either debit or credit. This system can eliminate the payment risk because the money are instantly cleared and secured by using strong encryption. Thus, electronic currency is the digital representation of money or digital representation of currency.
Advantages of Electronic Currency
CONFIDENTIALITY
One of the attractive features of electronic currency is, unlike real cash, it is anonymous. That means when electronic currency is sent from a customer to merchant, there is no way to obtain information about customers. This is one of the significant differences between electronic currency and credit card. Credit card companies will collect a customer’s spending habits and sell this data to third party and the bank will not have record of customer involved in the electronic currency transaction. Thus, the bank is unable to obtain personal information about customers and protects against the privacy rights of the customer.
SECURITY
The electronic currency is provided by the use of encryption to security purpose.
Disadvantages of Electronic Currency
FRAUD
Major disadvantage to electronic currency is fraud. If customer misplace this private key and a perpetrator uses it to withdraw fund, the bank would never know and the customer will liable to the lost. Credit card can limit the customer’s liability for unauthorized activity. In addition, if the security code is broken and the message is intercepted, the hacker will be able to perpetrate the fraud on the recipient of the message.
PEER-TO-PEER DOUBLE SPENDING
Another disadvantage of electronic currency is double spending of digital coins. This is potential to happen when customer chooses a peer-to-peer transaction. In the electronic currency system, the bank able to check the serial number of each coin in a transaction against its database of spent coins, if the coin has been spent, the transaction will be denied.
For nowadays, there are many convenience methods for us to paying. Credit is one of the method. Many people are like to pay by credit card; it is because the users are not need to really pay with their money at the moment. The credit card’s company will sent a statement to the users at the end of a month. The statement is stated the amount that the users has to paid. The users must pay the amount without over the expired date. Other wives, penalties and interest will be charged by credit card’s company.
There are many reasons for cause credit card debts. The first reason is the people are always belief about their future earning. When the users paying by the credit card, they will think that they may pay the amount in the end of the month, so that they may use their following salary to pay. This is the reason for causes the debt. The users cannot expect what they have to spend at next month, if there is some extra spending on next month, they will do not have enough money to pay the credit card’s debt. The second reason is most of the users do not have their financial planning. By doing a financing planning it may help the users to be more understand about their current cash that they may use. By understanding the financial situation, it may be easier to control the spending. The next reason is the credit is easy to be use and access. What is the procedure for using credit card? It is very simple only. When you decide to buy something, you just need to take the product to the counter than and give your credit to the person that at the counter, after that you may take the product back to your home. It is because the credit card is too convenience, it cause many users using it without consideration. And the last reason is the people of nowadays is easy to get attract by the new product. There are many new products are present on the market everyday. And the consumers especially the teenagers are easy to get attract by these product and purchase without thinking with their financial situation.
Although there are many reason for causes the credit card’s debt, but it also can be avoid. The first solution is education. By reduce the people of having credit card’s debt, education is very important. The government has to give the education to its people for how to manage themselves for escape from the debts. Besides that, the users have to do their own financing planning and clearly understand with their financial situation, and avoid them for spending the money without consideration. And the next solution is the users are encourages to set a credit card limit that under their financial ability. For example, An user’s salary is about RM3,000. If him set his limit at RM10,000 it will be increase the probability of the user to spent more. Lastly, the user may have to pay the credit card’s outstanding amount before the due day and make them escape from getting penalty or interest charge.
The credit card’s users are encourages to be consume smart. It is no point for having a heavy debt in your life.
In the 21st century,we are in the midst of a payment resolution which with cards and electronic payments taking the place of cash and checks.
Mobile payments which also known as mobile web payments or WAP billing, is a
collection of money from consumer via a mobile device such as their mobile phone, Smartphone, Personal Digital Assistant (PDA) or any other devices that are related to electronic. With such application, it can brings advantages to the world of e-commerce and it’s relatively growing in Malaysia as well.
This service was 1st introduced in Malaysia by TeleMoney, the country's first mobile payment service via multi-channel access for Internet and wireless transactions and it was l
aunched on 20 November 2001. Besides that, there are also another service provider which is Mobile Money (MM Wallet) is also one of the mobile payment systems that has been introduced in Malaysia few years ago.
The mobile payment can be used to purchase any number of digital goods and physical goods. For example digital goods are ringtones, games, wallpaper for mobile phone and the booking cinema ticket and air ticket such as Golden Screen Cinema and Airasia.Usually purchase digital good are through by SMS based transaction payments or mobile web payment(WAP).
The mobile payment providers still have a large market share to be grab on. This mobile payment is still new and has potential to continue to grow as consumer’s confidence on mobile payment increased. For those customer whom are working till late night may dun have the time to pay their bills. So that mobile payment will be very convenient for them.
There are a few strategy to adopt consumers which is to educate them about mobile payments, and how to use and introduce its functions (e.g. bill payment, mobile purchase). In other way, it is also very important to enhance the security well and make them to feel confident through the mobile payment. Besides that, most of the company will reward their consumer by giving gift at certain level of purchasing or giving redemption of rewards. In addition, some of the company will give extra credit to customers such as Hotlink users. With certain call and receive will accumulated the points to redeem air talk time or sms.
Friday, February 06, 2009 by
Siew Cheng Theng
, under
Phishing,
Week 4
Phishing is a broadly launched social engineering attack in which an electronic identity is misrepresented in an attempt to trick individuals into revealing credentials. In addition, Phishing is a type of deception designed to steal your valuable personal data, such as credit card numbers, email ID, others account data and passwords, or other information.
We might see phishing scam :
In email messages
On your social social networking Website such as Facebook
On a fake website that accepts donations for charity
On websites that spoof your familiar sites using slightly different Web addresses
On instant messaging program such as MSN or Yahoo Messenger
On cell phone or other mobile service
Here are example of Phishing:
(Click to enlarge)
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The pictures above show the different example of how phishing email try to steal information of the users.
From the information above, we know that phishing can be everywhere and it just near to you and me. So that, its very important for us to prevent phishing. Otherwise, our information will be STEAL by others.
Here are some of the ways to prevent Phishing:
(1) Keep your email and instant message addresses private
The best way to keep yourself from being tempted to respond to phishing is to prevent them to get your email box. You can try to separate email addresses ,one for financial institution, one for family and friends, and one for public use. Nowadays, many email provider will allow us to redirect the different email addresses into one account so that it can be easier for checking the email. Please remember to keep your financial transaction as private as possible.
(2) Immediately report suspected phishing contacts
You can call the customer service phone number immediately to confirm whether you have receive an actual messages or not when you do receive message you suspect to be phishing scam. In addition, you can report suspicious emails to almost every bank and credit card lender.
(3) Check who the email is from
Just check the sender of the email. A phishing scam may have email addresses that is not the domain of the legitimate bank/service. Also be aware of banks or any financial institutions asking for verify your account information. We suggest simple just delete the email like this.
(4) Do not follow a “Click Here” link in the email
“Click Here to re-enter your user information” is usually link that leads to an illegitimate website in phishing emails. You may be able to determine the link is real or not by looking at the link. Do not just focus on the domain name, take a look at the slashes that follow. Furthermore, the connection should be encrypted – the link should start with https:// and not http:// . 
Thursday, February 05, 2009 by
Ivan
, under
Week 4
The Internet is a worldwide, publicly accessible series of interconnected computer networks that transmit data by packet switching using the standard Internet Protocol (IP).Nowadays, peoples rely on computers to create, store and manage critical information through the internet. Consequently, it is important for users to aware that computer security plays a major role in protecting their data from loss, damage, or even misuse. Similarly, online security has been online trader’s main concern in protecting their websites from potential threats, such as phishing, security hacking, information theft, virus, worms and etc. Besides that, there are also a lot of hackers trying to hack others pc and personal file or even photos.
However, the increasingly developed technologies have increased the risk every computer user faced. Everyone who owns a computer with internet connection is able to equip themselves with ‘hacking’ knowledge by making some research online through the internet. Anyone from the each part of the world may also be able to learn the skills that to hack another persons personal documents or others companies confidential documents.
Many computer users are facing the threats that appear in the internet, such as cybercrime, phishing, internet and network attacks for an example computer viruses, worms and Trojan horses and back doors.Below are the explanation of each threats,
i.)
Cybercrime is defined as
online or internet-based illegal acts. Hackers, crackers and corporate spies who have advanced computer and network skills access computers and networks illegally with the intent of destroying data, stealing proprietary data and information.
ii.)
Phishing is a scam in which a perpetrator sends an official looking e-mail that attempts
to obtain your personal information and financial information. For example, some phishing e-mail messages ask you to reply with your information, or a pop up window that looks like a website, that collects the information. The damages caused by phishing can be crucial. The following case illustrates potential threat caused by phishing.
iii.)
Virus is a Malicious software that
attaches itself to other software. For example, a patched software application in which the patch's algorithm is designed to implement the same patch on other applications, thereby replicating. It replicates within computer system, potentially attaching itself to every software application.
iv.)
Worm. It's a malicious software which is a
stand alone application. It's often designed to propagate through a network, rather than just a single computer. When your computer is infect of worm, computer will slow starting or slow running. It'll also face unexpected or frequent system failures.
v.)
Trojan Horse - It is a Worm which pretends to be a useful program or a Virus which is
purposely attached to a useful program prior to distribution. It's same as Virus or Worm, but also sometimes used to send information back to or make information available to perpetrator. Trojan unlike Worms, which self propagate, it's require user cooperation.It is the most famous worm in the internet nowadays and it will also steal your infomation from your pc through the internet.
In conclusion, risk of facing threats are become more common and dangerous. So safeguards developed must be always up to date to enhance the defenses against online security threats. In the same time, users must be educated and informed about the crucial damages and loss caused by imposing online security threats.If we prepare well before we online, we'll be secure and safe from internet threat.
In a digital age, it's hard to avoid that share your personal data such as password, bank account number, credit card number. Just because nowadays most companies are prefer doing everything online just because to save cost. Unfortunately, some companies are not put in place the necessary stringent policies and procedures needed for protect the personal data in order to ensure the it is secure.
Here are some measures can be take to safeguard our personal and financial data:
1. keep your personal and sensitive data off you computer:
Virus or spyware programs are impossible to with you personal data if we don't store it on your computer.Thus it's simple and very effective, just try the best to keep the sensitive data off your computer. If there is necessary to keep it in electronic format for easy access, just simply store the sensitive files to a flash drive and keep it in a safe place.
2. Avoid saving credit card info to the any unauthorised website:
Many website e-commerce website today are always give the option to save the credit card info, so that we are not compulsary to type in all the information while we want to buy something. It can prevent that if someone eventually does hack to the website database and download thousands of credit card number, it may cause you suffer loses unconciously.
3. Do not use the same password for every account on the internet:
Internet user are always using the same id and password at every website. If you do so, you are actually doing a favour for hacker. Once a hacker figures our one password, they'll go ahead and try to see ifit works on any other site. Thus it's better to make sure passwords are different and more complicated, try to throwing in a number with symbol at the end will make it need a hundreds of times hard for a person to crack the passwords.
4. Always think before providing information when solicited:
If you ever get an email that has a link in it that requires ANY personal information, make sure you go to the web site yourself manually by typing in the address. Half the time links in emails point to fake addresses with very close names. Also, if you post items on sites like eBay or Craigslist, you will always be bombarded by scams from Nigeria, etc that sound way too good to be true (like someone would actually pay more for your item than what you listed it at)!!! And just because a web site exists does not mean it it legitimate! If you’ve never heard of the site before, just type it into Google once and see if anything like “XXX IS A SCAM” pops up!
5. Make sure the URL is start from "https" instead of "http":
The S can make it difference!! You'll notice that when you buy something from Amazon or another big site, once you being to checkout, the URL always starts with a "https". This means that the communication between your computer and their server is secure and encryted. If someone tries to read the data as it travels across the Internet, they won't be able to understand or decipher it. If you’re buying something from a smaller site and they don’t have HTTPS, just call them and buy it. Not worth risking data passing unencrypted over the net.
The most famous application of 3rd party certification program in Malaysia is provided by the MSC Trustgate.com Sdn Bhd.
The objective of MSC Trustgate is to secure the open network communications from both locally and across the ASEAN region. Trustgate provide digital certification services such as digital certificates, cryptographic products and software development. The products and services of Trustgate are SSL Certificate, Managed PKI, Personal ID, MyTRUST, MyKAD ID, SSL VPN, Managed Security Services, VeriSign Certified Training and Application Development. The vision of Trustgate is to enable organizations to conduct their business securely over the internet, as much as what they have been enjoying in the physical world.
Digital certificate usually attach to an e-mail message or an embedded program in a web page that verifies that user or website is who they claim to be. The common functions of a digital certificate are user authentication, encryption and digital signatures. User authentication provides other security than using username and password. Its session management is stronger. Encryption can make the data transmission secured by using the information encrypted. The intended recipient of the data is only person to receive the message. Digital signatures are like the hand signature in the digital world. It can ensure the integrity of the data.
By using the digital certificate, the users will be able to make transaction on the internet without fear of having the personal data being stolen, information contaminated by third parties, and the transacting party denying any commercial commitment with the users. Furthermore, the digital certificates can assist the development of greater internet based activities.
The meaning of electronic commerce has changed over the last 30 years. Originally, electronic commerce meant the facilitation of commercial transactions electronically. The growth and acceptance of credit cards, automated teller machines (ATM) and telephone banking in the 1980s were also forms of electronic commerce. Another form of e-commerce was the airline reservation system. Online shopping was invented in the UK in 1979. From the 1990s onwards, electronic commerce would additionally include enterprise resource planning systems (ERP), data mining and data warehousing.
Perhaps it is introduced from the Telephone Exchange Office, or maybe not. The earliest example of many-to-many electronic commerce in physical goods was the Boston Computer Exchange, a marketplace for used computers launched in 1982. The first online information marketplace, including online consulting, was likely the American Information Exchange, another pre-Internet online system introduced in 1991.
Although the Internet became popular worldwide in 1994, it took about five years to introduce security protocols and DSL allowing continual connection to the Internet. And by the end of 2000, a lot of European and American business companies offered their services through the World Wide Web. Since then people began to associate a word "ecommerce" with the ability of purchasing various goods through the Internet using secure protocols and electronic payment services.
The success story of Dell's e-commerce business was being famous story in the business world. The founder of Dell, Michael Dell was a myth that he had been created a revolutionary new model for doing business in the information age and became the youngest CEO in history to ever head a Fortune 500 company. He started the PC company by $1000 twenty years ago from now, and now it had became a large global enterprise with an annual turnover of more than 410 billion dollars. Michael Dell always indicates that "Dell win because we have a better business model." which is the famous model created by him call "Dell Model". By relying on this model, combined with an high efficiency production process and scientifically cost control management, it has bring Dell get a great success in personal computer market over the past 20 years.
Here are a few causes on Dell become a successful personal computer company:
Dell Model
Dell Company assembly their product according to customers' orders, and send directly to their customers. The essence of this model is its save costs and reduced the product prices by put aside the traditional sales chains, which are brokers and retailers. This model can be summarized in the following main features:
Produce according to orders: Assembling products according to the orders made by customers through the website and telephone, which customers have full freedom to choose their favourite product. The company also purchased accessories in accordance with orders, which can reduce the stock keeping and increase the cash flow.
Connect to customer directly: Direct link to the customer to save time and cost that will be wasted by selling through the middle channel, and get better understanding on customer needs.
Efficient logistics system to reduce cost: Establish a highly efficient supply chain and production process management , which had reduced production cost significantly.
Standardization of product and technology: The production line operated are mainly applying those standardize product and technology, which can reduce cost and production time.
Low Costing, High Efficiency, Better Service
Low Costing was the rules of survival for Dell all the time, and also the core for "Dell Model", but there must implement high efficiency in order to achieved low costing. Dell had create a well-known production and marketing line with their precise management , smooth flow and provide ultra-high efficiency service all the time, its help Dell can always control the cost at the lowest level effectively.
Dell seeks to simplify everything in order to improve efficiency. The company breaks downs the calling sell process into eight simple steps, with a 24hours working production lines the. The accessories can be turned into finished products within two hours in the high efficiency production line, and then transported directly to the Customer Service Center. Dell has owned 550 patents on theirs simplified process, this is why analysts generally believe that other companies can not really copy the "Dell Model"
Beside, Dell also putting much effort to establish the brand and improving service quality. Dell not only has a strict quality guarantee system, but also established a strong after-sales service network. Dell's staff not only provide comprehensive technical advice and guidance service for maintance through the website and telephone, but also on the spot service.
Nowadays, business environment is changing rapidly. So that, every organization have to create their own competitive advantage in order to compete with their competitors. As we know, e-commerce is one of the business type that can bring a lot of benefit to the organization. Now we will focus on three part which is how e-commerce help to reduce cycle time, improve employee’s empowerment and facilitate customer support.
Reduce Cycle Time
First of all, we have to know what is the meaning of cycle time. Cycle time is the total amount of time between the orders that placing by consumers and receiving the goods and services. That means it start from the order by customer and end when customer receive the goods.
A very good example is in traditional software business. Seller have to produce software CD when receive order from customer and delivered the CD to the customer. While through e-commerce, buyer can just simply download from website and pay through online. This not only can bring convenience to customer but also successfully reduce CYCLE TIME. Buyer just simply click on it and download and they can enjoy the software immediately.
On the other hand, e-commerce also allowed us to receive the order through website. In traditional business, order may receive through phone call or written mail. After that, they have to calculate how much order they receive and only start the production. But when customer click order from the website, it can directly calculate and sent the order to manufacturer to start production. This can help to increase the speed and reduce the cycle time of waiting in production.
Improve employee’s empowerment
E-commerce also let user to enjoy this benefits. Employee’s empowerment means employee can have more power to make their own decision. As we know, employee will have more motivation when they are being empower. E-commerce can help to empower because most of the system are computerized. For example, in traditional production line, employee have to listen to supervisor on how many product to be produce in particular period. By using e-commerce, when customer order and it will automatic transfer the quantity of production to them. So that they can decide themselves whether how much should be produce in particular period.
On the other hand, some organization also enable their employee to provide idea to the organization. Employee can give their idea through e-mail or intranet. This can help employee to behave in higher morale because organization treat them as part of the “THINKER”. It not just depends on the manager anymore.
Facilitate Customer Support
Nowadays, customer service become more and more important. There are several reason. One of it is because consumer know their rights very well and they need customer service to give them more confidence on the product they purchase. With e-commerce, customer able to get a lot of support when they need help. For example, in the webpage of company might have link call “ FAQ” which stand for FREQUENTLY ASK QUESTION. This can help customer to know what is the question that most people facing. E-commerce also allowed customer to send their question through e-mail to solve their problem.
By the way, another important customer support is e-commerce can help to provide a lot of information though website. With the website, customer can get information that they want. For example, the price,quality, function, color, size or any other thing that can show within the webpage. All of this can help customer to know more about the product and help them to make decision.
E-commerce also allowed customer to track their product when their product is delivered. This can help to let customer to estimate when is the time of the product arrived. All of these customer support can help to gain customer loyalty and also create competitive advantage.
Do you still remember Webvan? The Webvan was an the online "credit and de
livery" grocery business. Webvan Group Inc. headquartered in Foster City, California, USA with its proximately 2,600 workers and about 2000 stores. To become the number one online grocer, Webvan managed their way through a tangled web of operational changes. Besides that, the failure of Webvan is also an interesting failure, it was started in 1999 by Louis Borders, founding partner of Borders Books. Unfortunately, On 9 July 2001, Webvan went bankrupt and began its liquidation.
Webvan, which began selling groceries over the Internet about two years ago(1999-2001) and was unprofitable, they blamed that the declining orders and difficulty in raising more cash to stay alive. Besides that, Webvan also invested in technology and an infrastructure that was too expensive for low margin products. Webvan’s founder, Louis Borders, had experience with larger margin products, where profits are not solely dependent on volume. Webvan expected a high adoption rate to their e-grocer business, however, people were skeptical about the lack of control over the quality of the product. Thus, the lack of volume in grocery sales was the main factors that affected to the lack of debt repayment.
Finally,there are also some reasons that affected their sales. Webvan wants to implement a new business strategy that provides within 30 minutes delivery to their customer. However, this strategy seems like a failure as some of the customers are not at home or away at the time. Moreover,the delivery service may delayed due to certain problem and caused customer do not believe in them and thus, the sales gone!
On 9 July 2001, Webvan went bankrupt and began its liquidation. Besides that,Webvan also sold all its assests to delegate from the Nasdaq Stock Market.
