E-Commerce Tech Terms You Should Know

Transacting business seamlessly over the Internet means having a decent grasp of how things work, and more importantly, why they don’t. Put another way, when the e-commerce standard is Amazon.com, small-business owners better bring some serious game. That’s why, with help form the smart folks at technology publisher O’Reilly Media, we’ve assembled a glossary of e-commerce-related tech terms that every entrepreneur should know.

Some of that gobbledygook is the province of tech jocks. However, if entrepreneurs want to achieve operational excellence while keeping technology investment in check, they have to be able to at least speak the language. And you don’t have to know how to get down and dirty with computer code to understand the implications these issues have on strategy and budgeting.

In Pictures: 25 E-commerce Tech Terms You Should Know

Online retailers, for example, are trying to move beyond what has become the conventional, rather static consumer experience. One solution: real-time, individualized pricing. A new system, developed by uBee, allows merchants to “sense” what items a shopper is looking for on their Web sites, and spits out a custom price based on inventory levels and other particulars. “That,” says uBee CEO Bill Carpenter, “can give you personalization between buyer and seller.”

The e-commerce platform that UBee plans to launch next month will rely on SOAP, for Simple Object Access Protocol, a technology standard based on using “envelopes” that retailers and uBee use to exchange information quickly enough to make these real-time offers. The “documents” in these envelopes invariably are written in XML, the most common software language in e-commerce, including variants such asXML-RPC and XML Business Reporting Language. (The acronyms are dizzying at first, but you get used to them.)

Another important building block of e-commerce infrastructure involves activities described by Web Services Description Language, or WSDL. Oriental Motor, a Japanese distributor of industrial motors, relies on one of these programs to update the inventories and prices of the many parts it offers online. “Oriental Motor makes this information available to distributors via the Web so they all can access the same information,” says Peter Mooney, product manager for ThomasNet, a Manhattan-based shop that sells e-commerce technology to industrial companies.

For all the billions of dollars being spent and collected online, the code at the core of e-commerce remains highly fragmented–and that creates communication breakdowns within the overall system.

“The Internet is still the wild, wild west,” said Clint Page, chief executive of Dotster, a Vancouver, Wash.-based provider of Internet-business services. “It’s not like more-developed parts of business and commerce where you get standardized platforms.”

There are plenty of propeller heads trying to smooth it all out. One programming tactic is called messaging, which involves electronic documents from a Web service to a queue that then processes each message in periodic batches. “It’s the flow of information back and forth so that everyone can understand what’s being sent and can communicate effectively,” explains Page. “It’s sort of like, if one of us is speaking French, and the other one is speaking Chinese, [we] aren’t able to communicate. So [messaging] helps us both get to a middle language like Latin.”

Another still-unresolved tension among e-commerce architects is the choice between choreography and orchestration, both of which address how information moves around among, say, different companies. The choreographic process usually relies in part on messaging-oriented programming, and in an ideal world, says Page, choreography would reign: “Everyone would know the rules and play by them and information would just free flow. But we’re so far away from that, and we need to crawl before we can walk.”

Hence orchestration, whereby a single controller coordinates the flow of information, like a traffic cop. “The risk of orchestrated systems–and the reason that we’re all trying to move toward more choreography–is that you can get a bottleneck if the traffic cop can only handle so much traffic at one time,” says Page. “At least with the amount of infrastructure that is being built for the Internet, that is a less and less significant issue.”

While many of those programming challenges may seem at the subterranean level for most entrepreneurs, many other technology decisions demand more tangible, active involvement.

Take setting up a merchant account with a bank so that you can accept and process online payments. While bricks-and-mortar retailers only have to decide whether to accept checks and major credit cards, e-commerce is open to all sorts of other payment possibilities–including e-checks, PayPal and transactions in currencies other than the dollar.

You’ll also want to know a thing or two about affiliate programs. Under these advertising arrangements, companies collect cash for driving traffic to your site, and visa versa. “About 70% of our online business comes through affiliates,” said Rebecca Matter, director of online marketing for American Writers and Artists, a Delray Beach, Fla., outfit that offers programs and advice for getting in the direct-mail writing business. Her affiliates include Learning Strategies and Nightingale-Conant, “where people go as they’re looking to better their lives through a second career. These sites act like resellers of our programs.”

With Google now as much a verb as a company name, search engine optimization (or SEO)–the process of increasing a site’s odds of ranking high in the search stacks–is a key consideration for any e-commerce player. Says Dotster’s page: “There is ferocious competition to be on the first two or three pages of each search.” (For tips on SEO and other smart ways to market online, check out “16 Solid Small-Biz Web Design Tips” and “12 Innovative Marketing Techniques.”)

Then there’s the problem of security. While millions of consumers have grown comfortable with entering credit-card information into a Web site, reports of massive identity theft continue to crimp online sales.

The lines of defense begin with authentication programs that determine whether someone signing on under a specific name is actually authorized to use the site via that specific account. Force users to jump through too many hoops, though, and you risk driving them away. Hence the single sign-on approach, in which either the user’s computer or the Web site “remembers” passwords. Access control beefs up the barricades by granting entry only to specific site functions, such as adding an item to a shopping cart.

Want to make it clear that your site is indeed secure? Use software that adds a padlock icon in the user’s browser window. “Ensuring that your checkout process and, more important, the credit card form are well-secured will guarantee your customers feel safe when transmitting their information,” says Pat Kaeowichien, director of information technology for Magnetic, a Tampa-based Web-development firm.

Credit card firms have taken critical steps to fend off identify thieves, too. In 2006 a consortium including Visa, MasterCard, American Express and Discover helped devise the PCI/DDS standard for providing secure communication for transactions over the Internet.

“This standard is now in place for all merchants globally who accept credit cards–no exceptions,” says Bill Bradley, senior industry marketing manager for Akamai Technologies in Cambridge, Mass. “Non-compliance can mean fines and, for that retailer, a loss of public trust. And that’s the main reason people don’t buy online in the first place.”

Source : Forbes.com

Strategic Resources

According to Gary Hamel, the second component of a business concept in the difficult era is strategic resources, which consists of core competency, assets and the strategic core. Strategic resources are specific and unique that can change dramatically competition resource to be a source of business concept innovation.

Toy "R" Us Store

This competence is a superior thing that is owned by company and its able to provide skills and a unique ability. Interstate Department Store, in the beginning and would to
bankrupt, and finaly they saw the core competition, which is selling toys. Finally, the company changed its name to Toys "R" Us. Currently the company is controlled 17% of toy retail business in the United States. The main question on the competency of this core competency that we have? What we know about the unique, valuable for consumers and can be transferred to create new opportunities? What benefits depth that can satisfy the consumers? How do these advantages make for new ways to compete? What kind of difference can be made to the core competencies to the market in different industries? what competency that we provide to our business concept? Ebay is one of the companies that use the core competencies with 5P : Product, Price, Promotion, Placement and Performance.

eBay Competition

strategic assets is not a unique skill and superiority, but something that relates to the company, for example, company name, brands, patents, infrastrtur, property standards, consumer data, and all the things that is very rare and valuable. The use of one of these assets rar create a business concept innovation. Barnes & Noble is the company's success, rival Amazon.com, as the use strategic assets. Barnes & Noble has a strategic asset that the strategic location of the store and wide. Then Barnes & Noble can provide comfortable sofas and chairs in the space between the row of books and open bar-bar drinks in the store and places that can be used for the discussion of books, reading stories, poetry and music resital.

Book Store Barnes & Noble, wide and strategic

Barnes & Noble become the destination of fun and luxurious, not just a book store, but is central to the community that comfortable meeting.

Divorce place in the Barnes & Nobles

Discussions Place in the Barnes & Noble

The key question is whether the asset strategy that we have? Can we exploit in a new way to provide new value to consumers? Can we have a strategy asset value in the rules that other industries? Can we create a new business model with exploit our strategic assets?

The core process is what the company made, which includes the methodology and routines that used to change the input into output. This process incorporate the core competencies and strategic assets, and input into something of value for consumers. The discovery of a fundamental re-core process can make the basic concept of business innovation. Questions concerning the core nucleus of this process is whether the most critical in our company? Whether that process can create the highest value for consumers and competition in a unique scene that tight? With speed like what we develop the process? Can we imagine a process that is new that is more valuable for consumers? Is there an opportunity to improve the efficiency and effectiveness of our process?


According to Gary Hamel, to become a revolutionary industry or create a new rule on in the difficult era or the revolution era must create a business concept and its component-component. A concept in the difficult era if business consists of four main components, the core strategy, strategic resources, intermediary customers (Customer Interface) and the network value. That four main components are linked by the three bridge components.

Among the core components of the strategy and resources linked by a strategic component of configuration activities . Components of benefits for customers linking the strategy's core customers and brokers. While the restrictions component company to become a bridge between network resources with strategic value. In the business model in the difficult era include the four elements that determine the profit potential of efficiency, uniqueness, and the suitability of the profits.

The first component of the concept of this business strategy is the core strategy, which is the core of how a company choose how to compete. Elements of the strategy includes the core vision and business mission, the scope of the product / market base and differentiation.business vision is what the desired company that ideal and mission operations of the business is a business vision. Vision and mission of this business will lead to a statement of values, the will of the strategy, objectives and targets large, and many brave and all performance targets. Vision and business mission is to provide direction and a criteria to measure the progress achieved. Vision, which was proved to be the spiritual capital melabungkan company. Merck Pharmaceutical has the vision that these companies exist because they provide the medicines to those who need them, so that the motive for the research work optimally.

Google's mission is to organize the world's information and make it accessible and universally used. Mission capital with a rich spiritual Google can make it explode selling ads. Capital from 0.1 million U.S. dollars in 1998 exploded in March 2007 with revenue reaching 3.66 billion dollars.

Meanwhile, The Yahoo mission is connecting people with the desire of their community and their knowledge of the world. The Company was founded by Jerry Yang and David Filo with a relatively small capital in 1994. Now the company is was explode with the acquisition of income = 6426 billion U.S. dollars at the end of 2006.

The second component of a business concept in the difficult era is strategic resources , which consists of core competency, assets and the strategic core. Strategic resources are specific and unique that can change dramatically competition to be a source of business concept innovation. Competence is a superior something that is owned company and is able to provide skills and a unique ability. For example, Amazon.com, has a patented technology, "One-Click" and has a very strong brand that is in between the quality of its core competency. But indeed the core competence of Amazon.com is the experiencesthat created for customers convenient to do business with Amazon.com. Why convenient? Because the easy (One-Click), to make people perceive that they do business and sell and buy products with brands that have already known.

The third component Customer Interface, which has four elements, that is the support and fulfillment, the depth information, relationship dynamics and structure of prices. Harley Davidson is a company that is able to build genuine relationships with customers.

Meanwhile, the fourth components of the network business model is the value that beset the company and reinforce and complement the resources of the company. Cisco and Nokia to use their supplier networks as a way to reduce working capital and increase flexibility dramatically.

Tipping Point Strategy

The success of a company depends on the strategies implemented, but sometimes seemed from the outside strategy from the small things. Even small things changes sometimes can make a big change accidentally. If this happens in the company, the company will be successful in sales. This incident occurred on the Wolverine, the manufacturer of shoes with the Hush Puppies brand. Classic suede shoes with the sole light of raw rubber is made in United States sales decreased sharply, to only 30,000 pairs per year and most of the shops or stalls, a simple outlet in a small town far from the crowd. Wolverine think even the company to stop production.

Suddenly, in late 1994 and early 1995 a miracle happened. In the event the opening of a branch of fashion houses, two executive Hush Puppies, Owen Baxter and Geoffrey Lewis met with a fashion designer from New York who relaxed in the discussion told them that the classic Hush Puppies sudden preferred the hipster in clubs and cafes in the center of the area Manhattan business. "Some shops of used goods in the Village and Soho sells our shoes. Many of those who invade the small stores that buy everything "said Owen Baxter. "Isaac Mizrahi also wear Hush Puppies" said the fashion designer. For some of the old story, the story of Lewis Baxter and the only joke. For those not reasonable if the shoes are so behind the days suddenly become famous.

Fashion designer John Barlett, that used Hush Puppies in the Spring collection. Then followed, Anna Sui, which is used for the presentation of clothing. Jooel Fitzgerald make balloon and install a seven and a half meters in the form of soft furry dog children, short-legged and long ears a symbol of the Hush Puppies brand. Fitzgerald even install symbols on the roof of the store at Hollywood and clear in its art gallery to be a special boutique Hush Puppies beside. When it is paint and arrange the shelves, actors Pee-Wee Herman to come and ask a few pairs are provided. "Promotion of mouth to mouth, really powerful" said Joel Fitzgerald.

In 1995, Hush Puppies sold 430,000 pairs and in next year can sell four times in 1997 and sold more of the Hush Puppies ultimately strengthen itself as the apparatus of youth clothing trend center in the United States. Hush Puppies also won the award best from the Council of Fashion Designers in a reception dinner at Lincoln Center and president of the company's board stage with Calvin Klein and Donna Karan to receive the award on the cut Hush Puppies.

Booming sale of Hush Puppies shoes, only because some fraudulent teenagers that use the shoes. Anyone they do not intend promote. They put on shoes is just want to appear different. However, somehow fraudulent contagious to other teenagers until finally there was the two-mode use commodities to offer them another. These shoes appear on the surface because the accident. Shoes reaches certain point because of the popularity of is said by Malcolm Gladwell called tipping point. Prayer can change something that is not possible, something that becomes extraordinary. Prayer is followed by a hard business that can make the tipping point.

source : msuyanto.com

Blue Ocean Strategy

Strategies to compete in the competition is very tight can cause "sea of blood" for companies that compete or are put-off. This strategy is known as Bloody or Red Ocean Strategy. W. Chan Kim and Renee Mauborgne said that the Red Ocean Strategy is no longer effective to create growth and profits in the future. They are proposing a new strategy called the Blue Ocean Strategy. Differences between the Red Ocean Strategy and Blue Ocean Strategy, among others, on to the market, competition, demand, values and strategy.

W.Chan Kim and Renee Mouborgne

Red Ocean Strategy considers that to compete it is to compete in the market space that, while the Blue Ocean Strategy, considers that compete is to create market space that is not any opponent. The market is very broad as "blue ocean". Because the market is very broad, companies can choose the market as they want. Red Ocean Strategy to use the concept can grow and benefit with the defeat competitors in the competition. Blue Ocean Strategy by using the concept to create competition with none.Becausecompetition does not exist, then the only company to compete with himself without another company. The company will win the competition unopposed. Red Ocean Strategy exploit the demand that exists limitless. Blue Ocean Strategy to create and capture new demand. Red Ocean Strategy to achieve excellence create value, then the Blue Ocean Strategy to achieve excellence without the need to create value. Red Ocean Strategy unified system with the overall activities of the company by selecting a differentiation strategy or overall cost leadership strategy (the low-cost strategy), while the Blue Ocean Strategy unified system with the overall activities of the company in implementing the strategy and differentiation strategy of leadership in the overall cost of co - same. Blue Ocean Strategy concerning two aspects. First, how to find and develop the blue ocean. To find and develop the blue ocean, with the launch of new industries such as a complete eBay auction conducted on the Internet and do more with the general idustri expand the boundaries created by the red ocean. Second, how exploitated and protect the blue ocean.

Source : www.msuyanto.com