While the term e-commerce refers to all online transactions, B2C stands for "business-to-consumer" and applies to any business or organization that sells its products or services to consumers over the Internet for their own use. When most people think of B2C e-commerce, they think of Amazon.com, the online bookseller that launched its site in 1995 and quickly took on the nation's major retailers. However, in addition to online retailers, B2C has grown to include services such as online banking, travel services, online auctions, health information and real estate sites. 

Difference between B2C and B2B e-commerce:

For one thing, the customers are different — B2B (business-to-business) customers are other companies while B2C customers are individuals. Overall, B2B transactions are more complex and have higher security needs. Beyond that, there are two big distinctions:

• Negotiation
  Selling to another business involves haggling over prices, delivery and product specifications. Not so with most consumer sales. That makes it easier for retailers to put a catalog online, and it's why the first B2B applications were for buying finished goods or commodities that are simple to describe and price.

• Integration
  Retailers don't have to integrate with their customers' systems. Companies selling to other businesses, however, need to make sure they can communicate without human intervention

Companies organize their B2C initiative:

In the early days, e-commerce initiatives were often led by groups that were separate from the main IT department. The extreme example of this kind of separation was the spinoff model, in which stand-alone Web units were created thousands of miles from company headquarters with entirely new staffs. In these cases, IT leaders at the home office often had little to do with the B2C projects. Increasingly, e-business departments are coming back under the corporate umbrella and CIOs are often in charge.

Challenges of B2C e-commerce:

• Getting browsers to buy things — Your e-commerce site cannot live on traffic alone. Getting visitors to the site is only half the battle. Whether they buy something is what determines if you win.
  
  The so-called conversion rate for B2C e-commerce sites is still fairly low. (Boston-based Yankee Group said in November 2000 that the average rate was 1 percent.) Some ways to boost your conversion rate include improving navigation, simplifying checkout process (such as one-step checkout and easily replaced passwords), and sending out e-mails with special offers.
• Building customer loyalty — With so many sites out there, how can you build a strong relationship with customers? Here are some tips:
  1. Focus on personalization: A wide array of software packages are available to help e-commerce sites create unique boutiques that target specific customers. For example, American Airlines has personalized its website so that business fliers view it as a business airline and leisure travelers see it as a vacation site. Amazon, which built its own personalization and customer relationship management (CRM) systems, is well known for its ability to recognize customers' individual preferences.
  2. Create an easy-to-use customer service application. Providing just an e-mail address can be frustrating to customers with questions. Live chat or, at the very least, a phone number will help.
  3. Focus on making your site easy to use.

Fulfillment — E-commerce has increased the focus on customer satisfaction and delivery fulfillment. One cautionary tale is Toys "R" Us' holiday debacle in 1999, when fulfillment problems caused some Christmas orders to de delivered late. Since then, companies have spent billions to improve their logistical systems in order to guarantee on-time delivery. Providing instant gratification for customers still isn't easy, but successful B2C e-commerce operations are finding that fulfillment headaches can be eased with increased focus and investment in supply chain and logistical technologies..

Channel conflict:

Channel conflict, or disintermediation, occurs when a manufacturer or service provider bypasses a reseller or salesperson and starts selling directly to the customer. Some sectors, including the PC and automobile industries, are particularly vulnerable, as are service industries such as insurance and travel. Levis, for example, pulled its website after its resellers protested. And in the fall of 1999, General Motors tried to buy back 700 franchises and sell cars direct -mostly to build out a possible Internet channel. But the plan backfired, upsetting dealers and prompting discussions with GM.

Now, some that struggled with channel conflict are finding ways to approach e-commerce without upsetting their salespeople. For example, big car companies and manufacturers such as Maytag are setting up websites that allow customers to decide what they want before being redirected to a local dealer. 

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 Trustee. 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.

About Internet taxation:

The Internet Tax Freedom Act of 1998, which put a three-year moratorium on Internet taxation, is set to expire in October. 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. Legislation has been filed in Congress to extend the Internet tax moratorium.