What's the difference between e-commerce and traditional transactions?

Traditional business means that users can use telephone, fax, letters and traditional media to realize business transactions and management processes. E-commerce refers to commercial activities centered on commodity exchange with the help of information network technology. What's the difference between e-commerce and traditional commerce?

Comparison between Electronic Commerce and Traditional Commerce

The difference between e-commerce and traditional commerce: their operation processes are different.

The actual operations in the traditional business transaction process include pre-transaction preparation, transaction negotiation, contract and execution, payment and liquidation. Among them, the preparation before the transaction means that both parties to the transaction begin to enter the specific transaction negotiation process after they know the supply and demand information about products or services. Transaction negotiation is actually a process of oral negotiation or transmission of written documents by both parties. Written documents include inquiry forms, order contracts, invoices, transport bills, invoices, acceptance certificates, etc. Contract and execution process, in traditional business activities, the process of transaction negotiation is often completed by oral agreement, but after the negotiation, both parties to the transaction must sign a legally binding business contract in writing. Finally, the payment process, traditional business activities generally have two payment methods: check and cash, and check is mostly used in the transaction process of enterprises.

Although the operation process of e-commerce also includes preparation before the transaction, trade negotiation, signing and execution of contracts and payment of funds, the specific operation methods used in the transaction are completely different. In the mode of e-commerce, the preparation before the transaction and the supply and demand information of the transaction are generally obtained through the network, so the communication between the two sides of the transaction has the characteristics of fast and efficient: the negotiation of the transaction, in which the negotiation process between the two sides is to turn the written documents into electronic documents and transmit them on the network; Signing and execution of contracts, network protocols and e-commerce application systems under e-commerce environment.

This function ensures the correctness and reliability of all transaction negotiation documents of both parties, and has legal effect under the authorization of a third party, which can be used as the arbitration basis for disputes arising in the implementation process; Payment of funds, payment of funds in e-commerce transactions generally takes the form of online payment.

The difference between e-commerce and traditional commerce: in traditional commerce, the manufacturer is the business center, while in e-commerce environment, the seller is the main body of commerce.

In traditional business, manufacturers are responsible for organizing market research, new product development and research, and finally, manufacturers are responsible for organizing product sales. So it can be said that all activities are inseparable from manufacturers. However, in the e-commerce environment, the seller is responsible for the sales link, including the establishment and management of product websites, the design and update of web pages, and the design, organization and management of all online sales and after-sales services. Manufacturers no longer play a leading role.

The difference between e-commerce and traditional commerce: the commodity circulation mechanism between e-commerce and traditional commerce is different.

Commodity circulation under traditional commerce is an indirect circulation mechanism. Most goods produced by manufacturing enterprises have to go through a series of middlemen before reaching the end users. This circulation mechanism invisibly adds many unnecessary links to the circulation of commodities, and also increases the corresponding circulation, transportation and storage costs. In addition, all middlemen have to make their own profits, which has caused a huge difference between the ex-factory price and the retail price of goods. In this regard, some manufacturing enterprises have adopted direct sales (directly sending goods to shopping malls for off-site sales). This way of circulation makes commodity prices fall, which is very popular among consumers. However, this method can not bring more profits to the production enterprises, because the direct selling method requires manufacturers to have a lot of sales staff who often run between markets.

With the emergence of e-commerce, every commodity has established the most direct circulation channel, and manufacturers can directly deliver the goods to users, and also get the most valuable demand information from users, so as to realize the unimpeded information exchange.

The difference between e-commerce and traditional commerce: e-commerce and traditional commerce involve different geographical scope and commodity scope.

The geographical scope and commodity scope involved in traditional commerce are limited, but with the popularization of the Internet, especially the emergence of various professional websites, the geographical scope and time involved in e-commerce are infinite and transcend time and space.

From the above, we can easily see that there are similarities and differences between traditional commerce and e-commerce, and the relationship between them is mainly manifested in the following aspects.

1) e-commerce logistics system can be built on the basis of traditional business logistics system, which will give full play to the utilization of logistics resources.

2) Customers under e-commerce may be customers under traditional commerce. In a sense, e-commerce is the development of traditional commerce.

3) Many activities of e-commerce can follow the traditional business activities and be improved and expanded to adapt to the new business conditions. Finally, the existing sales channels and information networks of traditional businesses can also be used for e-commerce.