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The History Of E-commerce

Mar 28, 2008
Sometimes it seems like e-commerce has always been a part of our lives. Most of us make business transactions online on such a regular basis that it is difficult to imagine a time when you were not able to do so. Despite this, the history of e-commerce is actually a relatively short history. It began less than fifty years ago and its humble beginnings look nothing like the kind of electronic business transactions that we see today. Even up until the 1990's, online business wasn't a reality for the average person. So how did we get to the point where e-commerce has become practically a way of life?

The development of e-commerce was one of those things that happened slowly and then suddenly. At its very basic level, the term refers simply to any commerce that takes place electronically. This includes ATM and credit card transactions as well as the ability to do billing and invoicing through electronic methods. The technology allowing this kind of commerce took hold in the late 1970's and grew steadily throughout the 1980's. It was during this time that people started to use credit cards on a regular basis and that set the foundation for electronic commerce to get a toehold in society.

However, it wasn't until the development of the Internet that e-commerce started looking like the type of business that we know today. For most people talking about it now, the term refers to transactions, which take place completely through the web. When you search for an item on sites such as eBay or Amazon and then pay with a credit card or online checking account, you're conducting the kind of e-commerce that most people think of when the term comes up. That wasn't made possible until the average person began to use the Internet in the 1990's.

Two things happened in the mid-1990's to make this kind of e-commerce a possibility. First, computer security was strengthened enough to make consumers and businesses feel comfortable with conducting these types of transactions online. Second, the average person began to gain familiarity with the web and started using it for every day activities such as online shopping. Combined with the fact that web design was improving and the speed of the Internet was increasing, e-commerce had a platform for development. In 1995, Amazon.com was launched and we really started seeing the type of e-commerce that we're used to today.

Despite the fact that the web looked a lot then like it does now, there were several factors that inhibited the growth of the online business at this time. For one thing, many people still didn't have high speed Internet in their homes so online shopping tended to be limited to what could be done in the workplace. Additionally, many small businesses invested too much money in creating a web presence and they weren't able to sustain that development due to lack of funds. At the turn of the twenty first century, the dot-com bust happened and many of these businesses went broke.

Of course, we survived the dot-com bust and the Internet came back in a bigger and better way. Today, the average person not only has a home computer but also has the high speed Internet connection that lets him or her move easily between web pages. This makes it easy to do comparison-shopping online. More importantly, the availability of high speed Internet has increased the ability of people to work from home. These people often set up e-commerce sites, which allow them to sell products without needing a whole business behind them. These two factors combined have made it so that e-commerce has become a part of our daily lives. Now if we could only find a way to spend less than we make, we'd all be in good shape.
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