e-commerce

Definition

The buying and selling of products and services by businesses and consumers through an
electronic medium, without using any paper documents. E-commerce is widely considered
the buying and selling of products over the internet, but any transaction that is completed
solely through electronic measures can be considered e-commerce. E-commerce is
subdivided into three categories: business to business or B2B (Cisco), business to
consumer or B2C (Amazon), and consumer to consumer or C2C (eBay). also
called electronic commerce.

E-Commerce Plays Major Role in Industrial Sector Growth

After rising to the top, in retail store battles, major chains such as Best Buy and Barnes &
Noble are still planning to cut hundreds of stores in 2013but with the help of the ecommerce boom, the supporting industrial market has emerged strong this year with
declining vacancy and modest rent growth in most markets.
Regardless of the destruction its causing to the bricks-and-mortar retail industry, ecommerce development helped prevent the downfall of the national industrial market.
Global e-commerce is expected to double to $1 trillion in three years, with Amazon taking at
least a quarter chunk of that market. Demand for new distribution centers today is strongest
around the ports, but is also expanding in major population centers such as large cities
in California, Texas, New York and New Jersey, as Amazon and other large retailers prepare
massive distribution facilities to reach local online shoppers, according to Cushman &
Wakefields 2013-2016 Industrial Forecast Report.
Amazon has continued to announce large new distribution facilities around the globe. Just
in January, the Seattle-based firm said it signed lease agreements to fill three new
fulfillment centers in Texas, one in Robbinsville, N.J. and one in Tracy, Calif., in the San
Francisco Bay area. Each of the centers is being built at more than 1 million sq. ft. Amazon
isnt looking weak, either, reporting a record high stock price of $284 per share on Jan. 25,
even with the firm beginning late last year to charge customers sales taxes in states that
were previously exempt.

Kris Bjorson, Jones Lang LaSalles head of retail and e-commerce distribution, says that as
Amazon continues its lead, other major retailers are going to fall in line with the new
supply-chain model. Companies like Home Depot, Target and Walmart are evaluating their
three-to-five year multichannel strategies, he notes. They have to consider, do customers
like coming into our stores or going online or coming into the store and then going online,
etc. Where is the customer putting most of his or her money into this process? Bjorson
says.
However, as opposed to Amazons brand new model, these companies already have the
industrial supply chain in place, and they will have to evaluate how to alter that model,
particularly how to rework distribution facilities to meet the likely-coming consumer
demand of same-day delivery on all products. Challenges to changing over these existing
distribution centers include a shortage of trained workers for the more automated
processes, adding truck traffic and parking to meet increased shipping demands, and
retooling the buildings insides to handle single-item picking, Bjorson says.
It all comes down to the utilization of cubic feet in the same amount of space, he explains.
The new trend in retooling these centers is to add one or two tiers of work levels, thats why
youre seeing the demand for at least 36-ft. clear buildings, it enables three levels of
conveyer belts for unit-picking onto shipping trucks.
Top shipping firms UPS and FedEx also predict this trend, according to JLLs 2013 Retail
Perspectives report. The companies are testing strategies for the same-day delivery model,
and FedEx predicts that potential industry-wide revenue from intra-city delivery of small
packages could rise to $12 billion.
While new development and retooling are the current trends, Bjornson believes that what
will follow will likely be more collaboration between vendors and suppliers and whomever
has the most modern warehouse holding the product. I think youll see more re-orientating
of the network to be more cost-efficient, Bjornson says. E-commerce leaders may start to
acquire boutique retailers to enter the physical market, and on the industrial side youll see
the absorption gap widening between class-A, modern buildings with employee and
population density and the rest of the country.
What is Ecommerce and the Importance of Ecommerce
Electronic commerce, or Ecommerce, which literally means business trading through
the Internet, has been around the globe since mid 90s. However, until the recent few

years, Ecommerce is getting more and more attention from entrepreneur and consumers,
both local and international. One of the main reasons is due to the highly successful
operations of some well known names on the Internet, such as eBay, Yahoo and Dell. The
sales revenue these companies shown in their annual reports are without doubt, one of
the biggest factors whyEcommerce is important in the commercial market nowadays.
Ecommerce proved its importance based on the fact where time is essence. In the
commercial markets, time plays an important role to both the business and consumers.
From the business perspective, with less time spent during each transaction, more
transaction can be achieved on the same day. As for the consumer, they will save up more
time during their transaction. Because of this, Ecommerce steps in and replaced the
traditional commerce method where a single transaction can cost both parties a lot of
valuable time. With just a few clicks in minutes, a transaction or an order can be placed
and completed via the internet with ease. For instance, a banking transaction can be
completed through the Internet within a few minutes compared to the traditional banking
method which may take up to hours. This fact obviously proves that Ecommerce is
beneficial to both business and consumer wise as payment and documentations can be
completed with greater efficiency.
From the business viewpoint, Ecommerce is much more cost effective compared to
traditional commerce method. This is due to the fact where through Ecommerce, the cost
for the middleperson to sell their products can be saved and diverted to another aspect of
their business. One example is the giant computer enterprise, Dell, which practice such a
method by running most of their business through internet without involving any third
parties. Aside from that, marketing for Ecommerce can achieve a better customer to cost
ratio as putting an advertisement on the internet is comparably much cheaper than
putting up a roadside banner or filming a television commercial. For Ecommerce, the total
overheads needed to run the business is significantly much less compared to the
traditional commerce method. The reason due to that is where most of the cost can be
reduced in Ecommerce. For example, in running an Ecommerce business, only a head
office is needed rather than a head office with a few branches to run the business. In
addition to that, most of the cost for staff, maintenance, communications and office rental
can be substitute by a single cost, web hosting for the Ecommerce business.
To both the consumers and business, connectivity plays an important part as it is the key
factor determining the whole business. From the business point of view, Ecommerce
provides better connectivity for its potential customer as their respective website can be
accessed virtually from anywhere through Internet. This way, more potential customers
can get in touch with the company's business and thus, eliminating the limits of
geographical location. From the customer standpoint, Ecommerce is much more
convenient as they can browse through a whole directories of catalogues without any
hassle, compare prices between products, buying from another country and on top of
that, they can do it while at home or at work, without any necessity to move a single inch
from their chair. Besides that, for both consumers and business, Ecommerce proves to be
more convenient as online trading has less red tape compared to traditional commerce
method.
In global market sense, the appearance of Ecommerce as a pioneer has opened up
various windows of opportunities for a variety of other companies and investors. For
instance, due to the booming of Ecommerce, more and more resources are being directed
into electronic securities, internet facilities, business plans and new technologies. In result
of this phenomenon, a variety of new markets have emerged from Ecommerce itself
giving a boost to the global market.

In short, if without any major obstacles, Ecommerce will certainly continue to mature in
the global market and eventually, it will become an essential business plan for a company
in order to survive and stay competitive in the ever changing market.