E-Commerce

Sadiq M. Sait, Ph.D

sadiq@ccse.kfupm.edu.sa Department of Computer Engineering King Fahd University of Petroleum and inerals Dhahran! "audi #ra$ia
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Electronic Commerce
E%Commerce

is $uying and selling of goods and services on the internet! especially the &&&.

Electronic Commerce
'nvolves

( )irtual storefronts on &e$ sites *ith online catalogs! sometimes grouped in a virtual shopping mall ( +he gathering and use of demographic data ( Electronic Data E,change -ED'. / the $usiness to $usiness e,change of data ( 0ulk e%mailing as a media for reaching prospective and esta$lished customers *ith ne*s and updates

Other Requirements

'nfrastructure! delivery system such as UP" in the U" &arranty! guarantee culture Presence of international companies to $oost customer trust and confidence 0ased on +) model -$ut it is possi$le to determine *hich ad on the internet is $ringing in more customers..
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Virtual Stores
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hour availa$ility 3lo$al reach #$ility to interact and provide custom info and ordering ultimedia capa$ilities

Examples

E,pected to $e a multi$illion dollar source of revenue for glo$al $usinesses 'n 4556 Dell Computes reported orders of a million dollars daily7 'n 4558! total $usiness%to%$usiness e%commerce revenues generated *as 941.: 0illion! e,pected to rise to 94;4.4 0illion $y the year 1<<< -reported $y e arketer. )inton Cerf! Chairman of 'nternet "ociety -and e,ecutive at C'. estimates that $y 1<<; e%commerce *ill reach $et*een 94.8 and 9;.1 +rillion "ee ama=on.com! travelocity.com! to*errecords.com! etc.

Three Options
4. 1. ;.

0uy ready%made solution i$m >et.Commerce ?ent space in a net*ork%$ased e%commerce solution iCat Commerce and @ahoo "tore 0uild the system from scratch *ith components and parts -requires e,pertise! time! and $udget%%%% $ut *ill give e,act solution..

#nother option is to use a Aplug%inB application to FrontPageB58 %%% Cust#ddCommerce For stats and gro*th of e%commerce and demographs see httpDEE***.*ilson&e$.comE&e$marketEdemograf.htm or httpDEE**.emarketer.comEestats 7
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EDI

ED' is the e,change of $usiness data using an understood data format. 't *as in e,istence long $efore the &e$ 'nvolves data e,change among parties that kno* each other *ell and make arrangement for one%to%one connection! usually dial%up. #n ED' message contains a string of data elements *hich are separated $y delimiters. Each data element represents a fact! such as price! product model num$er! etc. +he entire string is called a data segment.

EDI

# transaction set contains one or more data segments framed $y a header and trailer. +his is the ED' message or unit of transmission. # transaction set usually contains information that *ould typically $e contained in a $usiness document or form. +rading partners are parties *ho e,change ED' transmission.

Bulk E-mail

"ending ads and info -sometimes in the form of ne*sletters. is a method for marketers to reach potential E%commerce customers. "ometimes customers request to $e added to ne*sletter or ABspecial offerBB mailing list *hen visiting &e$ sites. ore often e%mail address are AharvestedB and sold to $ulk e%mailers *ho send their messages to as many &e$ users as possi$le
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Bulk E-mail

Unsolicited e%mail is considered to $e a AB"P# BB to the receiver. +he email should include a message that e,plains ho* to remove yourself from the list -usually $y replying *ith remove in the su$Fect heading. "ee
httpDEE***.isoc.orgEinternetEissuesEspamming httpDEE***.anti%spam.net httpDEEemail.miningco.com httpDEEstopspam.sparklist.com 11

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Steps

>etscape )irtual Gffice gives 6 steps to selling onlineD

"tep 4D 3etting a free e%mail address for life "tep 1D 0uilding a custom &e$site for free "tep ;D Ho* to attract visitors to your site for free -*ith ?egister it. "tep 2D Ho* to track visitors -*ith Hitometer. "tep :D +uning your &e$site -$y running critical diagnostics. "tep ID Finding ne* customers for free "tep 6D "elling Gnline 12
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N O E-Store !"n e#"mp$e%

# cost effective solution to selling on%line Can add a store to your &e$site in fe* minutes Can try it out for free for ;< days Company logos and other products images can $e uploaded $y simple clicks. "hopping carts! security of credit card data! confirmation via e%mail! automatic ta, calculation! shipping charges! and detailed tracking and analysis are provided.
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&hin's One (ust )o

Every $usiness *ho *ishes to accept credit cards through a &e$site much have all the follo*ingD
( erchant #ccount ( "hopping Cart ( "ecure "erver ( Processing echanism
/ ?eal time / anual 14
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(erch"nt *ccount

+his is like a contract *ith the credit card company +hese companies process your transactions and for*ard the money to your $usiness account -you must have a $usiness account. Fees is reasona$le! -application fee 9:<%92<<! monthly statement fee 94<%9;<! Per transaction fee 9<.;<%94.<< and monthly minimum transaction fee 91<%9:<.. "ome e%commerce packages include the application for a merchant account.
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Shoppin' C"rt

+his is the soft*are on your &e$ site *hich allo*s customers to JJ0ro*se your storeBB and select items to JJplace in their shopping cartB for purchase *hen they check out. +he "& computes applica$le state sales ta,! shipping costs -if any. and quantity totals. any companies charge 94<<%94<<< for this "&. "ome companies give it free *ith their E% commerce package -e.g.! "% art sopping Cart soft*are is availa$le free..
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Secure Ser+er

ost customers *ill not give their credit card information over the internet unless its over a secure server. +he current popular secure server is AB""KBB -secure socket layer.. ""K encrypts the data $eing passed from your consumerBs $ro*ser to the secure server -making data useless if intercepted.
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,rocessin' (ech"nism

+his is the final requirement. >o* that you have the merchant account! shopping cart soft*are and a secure &e$ site! you *ill need a *ay to transmit your credit card transactions to your merchant account +here are t*o methods

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,rocessin' (ech"nism (etho)s

?eal +imeD Customer credit card info is checked for approval immediately *hile he *aits. anualD +his means that each transaction is entered $y the merchant after the consumerBs purchase is made. +o process in real%time one must have a direct &e$ link *ith the processing company! usually through the secure &e$ site -Cy$ercash! a costly *as to achieve real%time processing..
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-ree So.t/"re
"everal

sites provide free soft*are or free demo do*nloads. E,amplesD httpDEE***.dansie.net and Perl9hop httpDEE***.arpanet.comEperlshop provide free shopping cart soft*are. #nother most po*erful free shopping cart system is availa$le from ini)end. -?uns on Perl :.<2 under Uni, and &indo*s..
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-ree So.t/"re

ini)end supports Fust a$out every need for a leading edge shopping site. Gnline credit processing Cy$erCash! #uthori=e.>et! Payment>et! security *ith ""K and P3P! po*erful data$ase connectivity *ith "LK and D0'ED0D! internationali=ation! and much more.

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-ree So.t/"re

+here are companies *ho *ill handle the *hole transaction process! form calculating the order to processing the credit transaction. Free erchant.com claims free credit card processing and secure account handling -catchM ay$e $anners on your site.

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Others
erchant Planet "ales 3ate @ahoo "tores '0 #ll provide solutions at cost. Products can also $e sold through on%line auctions. Check up e0ay.

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Other 0ssues

0uying on the internet E%#uctions E%+rading '"P and E%0usiness "ecurity #spects

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E-Auctions

&hatBs an E%#uction M +ypes for E/#uction E/#uction Formats Payment Gptions Consumer Concerns #voiding #uction Fraud &hatNs for "ale at Gnline #uctionsM Luick +ips for 0uyersE"ellers

Examples Tips to buy a PC at Auctio !"o Ca #elp C$eate a % &u 'ou$ () Auctio *ite ( li e

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E-Auctions

"tarted in 455:! 'nternet auctions are $a=aars! and online auctions deliver good fun and good $uys *hen you play it safe +o participate! $oth sellers and $uyers must register *ith the site -?egistration is F?EE. ("1e sure 2ou un)erst"n) the site3s po$ic2 4e.ore 2ou 4e'in Current$2 there "re o+er 400 popu$"r "uction sites "n) /e /i$$ 4e "))in' more
5 http677///84i).in)8com7".7".-$ist8htm$
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E-Auctions

+o participate! $oth sellers and $uyers must register *ith the site ?egistration is F?EE ("1e sure 2ou un)erst"n) the site3s po$ic2 4e.ore 2ou 4e'in Current$2 there "re o+er 400 popu$"r "uction sites "n) /e /i$$ 4e "))in' more
5 http677///84i).in)8com7".7".-$ist8htm$
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E-Auctions

@ou canNt actually see *hat you are $idding on -only a full description and a photo. @ou must trust that itNs accurate. 0uyers pay the sellers directly and also pay the shipping costs 'nternet auction typesD 0usiness%to%Person O Person%to%person
( Gperators of business-to-person auction sites have physical control of the merchandise. 'n person-to-person auctions! individual sellers or small $usinesses offer their items for auction directly to consumers 28
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Types of E-Auction

3enerally! the seller P not the site P has physical possession of the merchandise. #fter the auction closes! the seller is responsi$le for dealing directly *ith the highest $idder to arrange for payment and delivery

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Auction Formats

Single Item Auctions

( +he simplest to operate ( "eller su$mits a single item to the auction ( +he auction *ill $egin on a specified date and time! and at a specified price and $id increment ( Gnce the auction closes and a *inning $id su$mitted! $oth $uyer and seller *ill $e notified via e%mail. ( "eller *ill then $ill $uyers credit card that is on file for the goods! applica$le shipping! handling! and insurance! plus state sales ta,! if required

Multiple Item Auctions

( +he process for multiple item auctions is much the same e,cept that $idders specify the num$er of items to $id on 30
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Payment Options

0uyers may have several payment options

( credit card ( personal check ( money order ( cash on delivery ( escro* services

#ll sellers do not accept all forms of payment

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Quick Tips for Sellers

Provide an accurate description of the item youNre selling! including all terms of the sale and *ho *ill pay shipping costs ?espond quickly to any questions $idders may raise during the auction Contact the high $idder as soon as possi$le after the auction closes to confirm details of the sale "hip the merchandise as soon as you receive payment
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Quick Tips for

u!ers

'dentify the seller and check the sellerNs feed$ack rating Do your home*ork. 0e sure you understand *hat youNre $idding on! its relative value and all terms and conditions of the sale! including the sellerNs return policies and *ho pays for shipping Esta$lish your top price and stick to it Evaluate your payment options. 'f possi$le! use a credit card. 't offers the most protection if thereNs a pro$lem. Consider using an escro* service if the seller doesnNt accept credit cards.
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Consumer Concerns

#ccording to the Federal +rade Commission! 'nternet auction fraud has $ecome a significant pro$lem. ost consumer complaints center on sellers *hoD
( donNt deliver the advertised goodsQ ( deliver something far less valua$le than they advertisedQ ( donNt deliver in a timely *ayQ or ( fail to disclose all the relevant information a$out the product or terms of the sale. 34
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A oi!in" Auction #rau!

"hop *ith $usinesses you already trust ?ead the auction siteNs policy carefully $efore you $id Contact the seller directly and question him or her a$out the merchandise 3et the sellerNs full information! including name! address and phone num$er Check the auction site to see if there any negative postings a$out the seller
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A oi!in" Auction #rau!

'f possi$le! pay $y credit card for the same protection you have *hen making purchases in the real *orld DonNt send your credit card num$er $y e%mail Print a copy of your transaction for your records +o $e successful at any auction! you must kno* the fair market value of the products going up for sale
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A oi!in" Auction #rau!

0e skeptical of deals that appear too good to $e true. +hey pro$a$ly are Check the shipping costs! *hich could make the total purchase price more than *hat you *ould pay in a retail store

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$hat%s for Sale at Online Auctions&

@ou cannot sell a $a$y @ou canNt sell your kidney either! though someone tried #nythingD many! many products are availa$le for sale on the 'nternet
( httpDEE***.u$id.comE

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'ahoo Auction Site

"ite nameD httpDEEauctions.yahoo.com 3etting "tarted

( Ho* to 0id ( Ho* to "ell ( #ctions +our

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Create an! (un 'our O)n Site

Create and ?un @our G*n #uction "ite Gnline7 >o 'nstallation. >o &aiting. >o Cost. ( http"##$$$.ba!builder.com#home.htm

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E*ay $e* Site

"ite >ameD httpDEE***.e$ay.comE 3etting "tartedD

( ( ( ( ( ( ( >e* to e0ayM >e* to 0ro*singM >e* to 0iddingM >e* to "ellingM #re there FeesM &hy e0ay is safeM >e* to the 'nternetM

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Tips #or Buyin" PCs at Auction

0uying a computer via online auction can lead to a great deal of saving! $ut it isnNt the $est $et for everyone. Keep the follo*ing tips in mind
+hink a$out the type of computer youNre seeking and *hat you are *illing to pay $efore you start shopping. +ens of thousands of computers are offered in auctionsD Kno* precisely *hat you *ant in order to avoid getting over*helmed $y the options

4.

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Tips #or Buyin" PCs at Auction

1. &hen you find a candidate! make sure itNs clear *hether the computer is ne* or used ;. 'f you are $idding on used machines! it can $e safer to choose auctions from reputa$le resellers. 'f youNre $uying directly from the computerNs previous o*ner! you can protect yourself $y using an escro* serviceD httpDEE***.escro*.comE 2. Find out if the computer comes *ith a *arranty or not.
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Tips #or Buyin" PCs at Auction

:. 'f youNre a first%time $uyer or not technically

minded! the additional service and support provided $y a retail computer shop is a good $et
( 0idding on an auction is $est *hen youNre not in a hurry. +he process of *aiting for the auction to close -and $idding on another if you lose. can take days or *eeks

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$ho Can +elp&

'f you run into a pro$lem during your transactionD

( +ry to *ork it out directly *ith the $uyer or the auction *e$ site ( 'f that doesnNt *ork! file a complaint *ith the Federal +rade Commission $y calling toll%free 4%866%F+C%HEKP -;81%2;:6. or visiting the F+CNs *e$ site at httpDEE***.ftc.govE ( #lthough the Commission cannot resolve individual pro$lems for consumers! it can act against an individual or company if it sees a pattern of possi$le la* violations. @ou also may *ant to contact your state #ttorney 3eneral or your local consumer protection office

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E-&r")in'

0asics of 'nvesting 'nvesting "trategies Luotes O ?esearch

( "tock Luotes ( "tock Charts ( "tock ?esearch

Gpening Etrading #ccount

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9h2 0n+est "t *$$:

aintain purchasing po*er to cope *ith even mild inflation. 'nvesting is fun
( pitting your intellect against investing community ( re*arded *ith increase in assets

'nvestment returns can accumulate at a faster rate than your salary. # successful investor puts natural curiosity and intellectual interest to *ork to earn more money. Personal *ealth.
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9here Stoc1s &r")e

"tocks traded on securities and commodities e,changes or over the counter. E,changes mem$ers handle trades for themselves and their clients. "ecurities and options are regulated $y "EC -"ecurities and E,change Commission. ->@"E! # ER. For the over%the%counter -G+C. marketD trades are handled electronicallyPeither via telephone or computer or through dealers ?egulated $y the >ational #ssociation of "ecurities Dealers! >#"D#L provides the automated quotes for this market. 48
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Stoc1 ("r1et C2c$e

"tock market moves in cyclesD fluctuates. 3et *onderful $argains every fe* years and sell again at high prices a fe* years later. &ith this principle! you *ill prosper if you donNt $ecome too paraly=ed to act. "tock market is a voting machine! polling investors on the future! not the present. +he *orse you feel! ne*s is $ad! the safer the market. +he $etter you feel! ne*s is good! the closer you are to a top.
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Stoc1 ;$oss"ries

"hares GutstandingD shares of common stock currently o*ned $y investors. )olumeD total num$er of shares traded of a stock during a specific time period. ?evenuesD net sales of the company plus any other revenues associated *ith $usiness operations. -Does not include dividends! interest income or non%operating income.. >et EarningsD profit after all costs! e,penses and ta,es have $een paid. DividendsD cash payment! per share! to shareholders every quarter. Part of profits not reinvested in the company. +otal ?eturnD price change plus dividend return over last 41 months 50 50

Stoc1 ;$oss"ries < Cont8

@ield
( annual rate of return on a stock as paid in dividends. ( calculated $y dividing latest dividend rate $y latest closing price and multiplying $y 4<<. ( latest dividend rate is the total dividends paid in the past 41 months.

>et Earnings%Per%"hare -EP".

( net earnings allocated to each share of stock. ( calculated $y dividing net earnings $y common shares outstanding

PE3 ratio -price%to%earnings%gro*th.

( +he higher the PE3! the pricier the stock. 51
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0n+estin' Str"te'ies

'nvesting is a simple processD "tock "election Commit to a Position onitoring the Position Closing the Position

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Other 0ssues

)alue and 3ro*th "trategies 'mportance of Diversification utual Funds 'nvesting 'mpact of >e*s on 'nvestment Do not ?ush to an 'nvestment Common istakesD Panic selling! >ever selling! 'nvesting in Penny stocks
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&"p the ,o/er o. the 0nternet

'nternet shattered $arriers $et*een &all "treet and ain "treet. Previously! took a lot of manpo*er and computing po*er to research a stock. &ith internet you can
( retrieve in seconds stock price and volume information ( plot intraday stock graphs or historical graphs for one *eek or one month! one year or t*enty ( up%to%date company ne*s ( inspect corporate financial statements filed *ith the "ecurities and E,change Commission -"EC.. ( insider information 54 54

=uotes > Rese"rch

any e,cellent internet sites for stock quotes and research

( finance.yahoo.com ( ***.e,cite.com ( ***.etrade.com

ost stock quotes are delayed $y 1< minutes Free real time quotes *ith account E,ampleD finance.yahoo.com
( stock Luote! chartsD stock price ranges! research! ne*s! "EC O insider 55
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%ntel &orporation Stoc1 =uote E#"mp$e

Symb Last Change Volume Day's Range 52-week Range

+,TC

131 1/8

-5 11.16

-4/160

2213611100

130 7.8 - 139 1.16

50 1.8 - 145 3.8

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Stoc1 =uote - ?et"i$e)

2ast T$a%e 2355P4 5 131 3/8 C"a 6e 71.4 9870/190 P$e: Cls 131 1 .8 ;olu <i: me <ate *mall3 > 1% ? 5% ? 1y ? o e @ 21195 =u 1 Ai63 > 1% ? 5% ? 3m ? 1y ? 2y ? 5y 91200

@? max

<ayBs &a 6e 127 31.64 134 1.4 )eeC-52 &a 6e 50 1.8 145 3.8

As (pe C 13 130 1 3 .8 Ea$ . P.E 4Ct *"$ Cap 2/11 62/ 439/ 14 1A

Ai% 131 5 .16

A:6 ;ol 27156 11364

Ex<i: 4ay 3

<i:.* 'iel% "$ 0/12 0/09

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%ntel &orporation ' ( !ear Stock chart

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%ntel &orporation ' ) !ear Stock chart

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%ntel &orporation ' ( !ear chart *s. S+P),,

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Stoc1 Rese"rch Summ"r2

Numbe o! b oke s e"omme n#$ng as%

&'e age Re"ommen#at$on

8*t$o 6 Auy9 1/00 5/00 8*t$o 6 *ell9

)a n$ngs *e Sha e

*t$o 6 Auy 4o%e$ate Auy #ol% 4o%e$ate *ell *t$o 6 *ell

22 12 6 0 0

T"is !eeC 2ast !eeC C"a 6e

1(52 1/57

2ast 8<ec19999 Dua$te$ *u$p$ise

0/69 9/50

0/1 Consensus )st$mates T"is Dua$te$ T"is 'ea$ ,ext 'ea$ 94a$ 008 9<ec 008 0/68 2/91 3/39

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E"rnin' @istor2 > ;ro/th

Estimate Actual <iEEe$e ce 0 *u$p$ise De" 1++8 0/53 0/60 0/07 12/26 0
Last 5 /ea s
+ tel Co$p E2EC C(4P*E4+C *FP 500

,a 1+++ 0/54 0/57 0/03 5/56 0

0h$s /ea 1De" 223 25/3 0 30/4 0 11/6 0

-un 1+++ 0/54 0/51 -0/03 -5/56 0

Ne4t /ea 1De" 213

Se. 1+++ 0/57 0/55 -0/02 -3/51 0

De" 1+++ 0/63 0/69 0/06 9/52 0

*)5 Rat$o
1De" 223

Ne4t 5 /ea s

* $"e/)a n 1De" 223

16/5 0 10/8 0 9/2 0

16/5 0 36/7 0 8/5 0

19/3 0 30/8 0 15/2 0

45/0 57/6 26/7

1/78 1/89 2/30

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Openin' E-tr")in' *ccount

+here

are several companies to Etrade *ith. +ypes of accountsD

( cash ( margin

EStradeD ***.etrade.com
( 91< per trade -upto :<<< shares.! 94<<< for cash account! 91<<< for margin account! free real time quotes

Charles "h*a$D ***.sh*a$.com

( 9;< per trade -upto 4<<< shares.! 9:<<< for margin account! free real time quotes 63
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Openin' Etr")in' *ccount < Cont8

Datek GnlineD ***.datek.com

( 94< per trade -upto :<<< shares.! 91<<< for margin account! free real time quotes

>ational Discount 0rokersD ***.nd$.com

( 94: market order! 91< limit order per trade -upto :<<< shares.! no minimum $alance to open account

+D &aterhouseD ***.td*aterhouse.com
( 941 per trade -upto :<<< shares.

#meritradeD ***.ameritrade.com
( 98 market orders! 94; limit and stop orders -upto 4<!4<<< shares.! free real time quotes

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Summ"r2

'nvesting is important to maintain money po*er. 0efore investing learn

( investing $asics ( investing strategies

'nternet has made trading simple +ap the po*er of the internet in stock research and collecting information. E,tensive information resources and tools. #ny one can make good money $y electronic trading.
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0nternet Ser+ice ,ro+i)ers

Provide connection to the 'nternet! Fust like telephone companies give connection to +elephone net*ork. Connection GptionsD ( Dial%up ConnectionD Data over telephone lines! speeds up to ;; K$ps ( '"D>D 'ntegrated "ervice Digital >et*orkD Even though around for a long time! getting very popular no*! "peeds up to 418 K%$itsEsec
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Connectin' &o &he 0nternet

+hings needed to connect to the 'nternet ( ComputerD PC! "U>! ac or other ( '"P connection / Dial%up connection +elephone connection! '"D> / Dedicated leased lines +4! E'! #+ ! "G>E+ Connect to an e,isting net*ork ( "oft*are / Email client! &&& $ro*ser! +CPE'P net*ork soft*are

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-in"$$2A8
"ummary

Luestions

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