Introduction
The internet has become fundamental to global economics by making commercial activities more efficient, faster and cost effective. ''From its beginning in 1985, the Internet has grown to 80 million.coms and well over 200 million websites. Internet Commerce is the driving force behind rapid innovations, new products, services and business models and redefining our roles as consumers and citizens''. (Atkinson et at., 2010, p1)
Consumers have become empowered through access to vast amounts of information about products. Buyers with access to the internet have “the ability to search for a product or service; to compare sellers on important attributes such as price, quality, delivery and service; to read product reviews and consider the opinions of other buyers; and to do all of this quickly, cheaply, and with relatively little effort.” (Rappa, 2009).
Sellers have had to rethink the way they do business. Consumer attention is scarce and has become a highly sought after commodity with businesses spending considerable time and resources linking to other websites in an attempt to capture the attention of possible consumers for their products. Sellers can reach out to buyers 24 hours a day and 7 days a week, they can extend their market penetration beyond geographical boundaries and are unrestrained by physical needs such as warehousing.
Well balanced collaboration and business ideas can result in successful e-commerce using the Internet for online business. Amazon.com can be considered as one of the most successful online businesses worldwide. Its business spans over 15 years and there is no indication of it slowing down. Amazon.com is an e-commerce company based in Seattle, WA. The company was founded by Jeff Bezos in 1994, and launched in 1995. Amazon.com started out as an online bookstore and then diversified by adding other products, such as VHS tapes and DVDs, music CDs, software, video games, electronics, clothing, furniture, toys and other.
What is Internet Commerce?
Internet commerce, e-commerce or electronic commerce refers to buying and selling of goods and services where the business transaction occurs over an online system such as the Internet (US Bureau of Census, 2002).
Image of internet commerce (internet commerce, n.d.)
Fundamental Economic Basis of Internet Commerce
Traditional offline brick and mortar economies involve all those activities which move goods and services from the producer to the consumer. Businesses enter the commercial environment to exchange goods and/or services for profit. The laws of demand and supply determine prices within this commodity market with scarce products demanding higher prices and therefore being more attractive to producers.
The Internet has become a powerful and innovation engine for the Economy. Accounting and pricing models have been an issue for computer networks for some time and have became a central challenge for Internet Economics and its developers. The Internet Economics foundations are based on collaborative work or research by economists, engineers and others. It is a combination of collaborative work between the economy and technology.
The growth of internet commerce has seen a change the economic assumptions that underpin the relationship between production and consumption in the economy. Our analysis of the key principles and practices that sustain internet commerce will focus upon:
- online-business-models
- network-economy
- attention-economy
- gift-economy
- knowledge-economy
- emarketplace
- make money online
- privacy and security online
To fully understand how these principles and practices function we have researched Amanzon.com as a major internet business in today’s global economy.
