E-Commerce Definition and Solutions

• What is B2C e-commerce?
• What is the difference between B2C and B2B e-commerce?
• Why was there so much hype surrounding B2C e-commerce when it got its start in the late 1990s?
• How should companies organize their B2C initiative?
• What are the major challenges of B2C e-commerce?
• What is channel conflict and how can I avoid it?
• Can B2C e-commerce be profitable?
• Do I need a privacy policy for my B2C initiative?
• Do I have to worry about Internet taxation?

Can B2C e-commerce be profitable?

E-commerce sites are finally generating a return. Amazon.com reported its first profit in 2002, proving to the world that online retailing could, in fact, make money. Amazon went on to post a profit for the full year in 2003. E-commerce sites are now regularly reporting profits although competition remains stiff.

Do I need a privacy policy for my B2C initiative?

Yes. According to a survey done by the Privacy Leadership Initiative, 82 percent of consumers were paying attention to online privacy statements in April 2001, and that number was rising. Customers may not read the fine print, but they are reassured by the presence of a privacy statement. If you're not sure where to begin, visit the online arm of the Better Business Bureau or the non-profit group TRUSTe. Both organizations offer privacy seal programs. Even if you choose not to join, you can learn about the kinds of precautions you should take and how to explain them to your customers. Once you establish a privacy policy, though, make sure you follow it, or you'll be putting your company at risk for lawsuits and bad press.

Do I have to worry about Internet taxation?

The Internet Tax Freedom Act of 1998 put a three-year moratorium on Internet taxation and was renewed and extended in 2004. Since its passage, Internet sales have been handled in the same way as catalog and telephone sales — if the retailer has a store in the purchaser's state, a sales tax is supposed to be added to the bill. The Supreme Court has ruled that companies cannot be required to collect taxes in states where they have no physical presence.

Senior Writer Susannah Patton can be reached at spatton@cio.com.