Two days ago Raouf Ibrahimi Nasab and Seyed Mohammad Safavi (students of information technology engineering), which I met at JDay Iran, asked me to do a 15 minutes video on e-commerce for their seminar at Islamic Azad University of Bushehr (http://www.iaubushehr.ac.ir/). Both are responsible for the seminar which is part of the scientific association of that university.
Well ... let's go :)
What is e-Commerce?
Before we talk about e-commerce let's have a look at the word commerce.
Commerce means the whole system of an economy that constitutes an environment for business. The system includes legal, economic, political, social, cultural, and technological systems that are in operation in any country. So we are talking about business, one of the most ancient activities of human beings :).
Thinking of your country, I will choose as an example hand made Iranian carpets.
- Legal system: It is allowed to produce and sell carpets in Iran, foreigners are allowed to buy and export 6 sqm per person per visit.
- Economic system: There is an existing infrastructure to produce ans sell carpets
- Political system: Oh, I am not sure about that point but it seems to me that carpets are in general ok (not evil)
- Social system: People like carpets, the different wools, patterns and colors
- Cultural system: Iran has a very long tradition of carpets
- Technological system: It exists a well established technology to produce carpets
Carpets are sold in bazars and carpet shops. People come to these shops, select their carpet, pay with cash, take their carpet and take them home.
The whole procedure is working since hundreds (thousands) of years without electronic devices involved. Are we really want to change that? :)
The electronic version of commerce refers usually to the sales process. To stay in our carpet example and the systems around it would be possible to create a website with an on-line catalog of carpets ("virtual 24/7 storefront") and a system to buy them on-line.
This brings another advantage with it. When people are buying online you will get some personal information which you can use further to promote and advertise your products and build a strong long lasting relationship with your customers independent of their place of living.
People from all over the world can access the website and buy carpets on-line.
Even it's fun it is not necessary anymore to visit a carpet bazar in Iran with a lot of cash money in your pocket.
What do we need for on-line selling
In this example we are selling a physical product (the carpet). The product has to be stored, payed by and delivered to the customer.
- A storage system for the carpets
- A payment system that works all over the world
- A delivery system that delivers to any place in the world
What kind of products are possible?
In the carpet example we are selling the physical carpet. Beside of physical products it is possible to sell virtual products like:
- the download of an ebook about carpets
- the download of high res carpet pattern graphics
Even a right or a permission can be a product. We could create a carpet club and sell the membership to that club.
There must be a possiblility to pay on line. The client has to transfer the money and the shop owner has to receive that money.
Centralized Payment Systems
Often there is a layer in between. The layer can be a centralized card system that is tied to the customers bank account (Credit Card, Smart Card). It can be also a system like PayPal which exists as a kind of clearing account between client and merchant. These systems must be accepted by national states.
Decentralized Payment Systems
Alternative currencies like bitcoin are a possibility to pay independent of national states
Microdonation Payments System
Imagine that you are the guy who is drawing the wonderful patterns that appear in carpets. It is hard to sell patterns so it could be a way for you to offer a Microdonation Payment System like Flattr or Kashingle.
You think a price of a carpet is fixed? Please stop reading, visit a carpet bazar, try to buy a carpet and come back :)
The price is a very sensible thing. In general the price is calculated per square meter depending on parameters like the material, the amount of knots and more. Beside these "hard facts" there are several possibilities to change a price. Usually the highest price is written on the price tag. This price can be reduced depending on
- the amounts of carpets you are buying (pay 3, get 1 for free)
- the current state of the carpet (e.g. spots or inaccurracies)
- whether you are a member of our "carpet club" (10% off for members)
The price can depend also on what the clients offer to pay if we use an auction to sell them
The delivery system depends on the type of the product.
Our physical carpet have to be send as a package with the help of a mail system. The price for the delivery service depends usually on the measures and the weight of the product and the distance between our carpet storage and the clients place.
For the download of virtual products you have to take into account the limitation and costs of data traffic. This point is very important when you offers your products on mobile devices.
Implementation of an e-commerce system
- a shop system for creating the website (Joomla!, Drupal, WordPress, Magento)
- one or more payment system accounts
- a strategy how and what we want to sell (carpets, ebooks, memberships)
It is not possible to show all the systems and because the idea of this article was born on a Joomla!Day I want to show a solution in Joomla!
Joomla! is an Open Source Web Content Management System. It is possible to enhance the features of Joomla by adding extensions. When you look at the Joomla Extensions directory in the category e-Commerce you'll find more than 150 different extensions! For that reason it is very hard to show "The solution". It is necessary to pick a few extensions.
One example of a Joomla! eCommerce solution
The base of everything is the core of Joomla! I wrote a free Beginner's Guide on Joomla! 2.5.
Selling Physical Products
Figure 1: Physical product
Downloadable Products Example
Here is again an example based on VirtueMart to get an idea about this feature. The example comes from a live t-shirt design shop (Figure 2) where you can download the designs.
Figure 2: Downloadable product
The t-shirt shop runs with an older version of VirtueMart. The new VirtueMart 2 extension needs an sperate extension for this feature, e.g. shipment for virtual products (commercial extension).
In the Joomla! extension directory you'll find 21 other Paid Download extensions.
Figure 3: OSE Membership extension
Joomla! has 8 Auction extensions available that allow you to sell your products (carpets) using an auction (Figure 4)
Figure 4: Screenshot of BF Auction Plus (Commercial extension)
As you see, there are several possibilities to implement e-Commerce in Joomla! The implementation that best fits cannot be "the one solution". It depends on so many different parameters. As you can imagine the two other CMS's Drupal and WordPress have possibilities too.
It would be a pleasure for me to continue this seminar with a hands-on workshop in Bushehr, Iran :)