1. Design of E-Commerce in Online Store:
A Case Study of Amazon
IndividualFinal Examination Odd Year 2012
As the requisite of Management Information System Subject that lectured
by Prof. EkoGanisSukoharsono, SE, MCOM-HONS, PH.D
By:
Fatiah Putri R ( 105020307121016)
International Accounting Major
Economic and Business Faculty
University of Brawijaya
Malang
2012

2. 1. Definition
E-commerce refers to the process of buying or selling products or services over the
Internet. Online shopping is becoming increasingly popular because of speed and ease
of use for customers. E-business activities such as selling online can be directed at
consumers or other businesses. Business to Consumer (B2C) involves the online sales
of goods, services and provision of information directly to consumers. Business to
Business (B2B) refers to the online exchange of products, services, or information
between businesses.
2. The advantages
Selling online can help the business reach new markets and increase sales and revenue
gains. If we are interested in selling to other businesses, we can use the Internet to
find sales leads, announce calls for tender, and to offer products for sale. Searching
for products and services online can save you time and money by allowing you to find
the best prices without having to walk. You can use the Internet to find new suppliers,
post buying requests or search for products and services. The benefits of effective
B2B e-commerce include lower costs associated with selecting suppliers, establishing
prices, ordering, and finalizing transactions. Online trading networks can also be used
to support efficient information exchange between buyers and sellers.
3. E-commerce design
In order to process an online sales transaction three things are needed:
Shopping Carts
Shopping cart software keeps track of what the user selects to buy from the
website before proceeding to the “checkout”. An online shopping cart consists of
three parts:
 Product catalogue is made up of all the information needed to present any
product to the customer and to complete a sales transaction online.
Information to be included in the product database generally includes the
price, identification number (SKU), image or other multi- media

3. information, product options or choices.
 Shopping list (i.e. list of selected products) allows users to track the items
they want to purchase. A shop- ping cart image is generally used to show
what items the shopper has selected for purchase. In order for the shop-
ping cart to function properly the user’s computer must be set to allow
“cookies”.
 The checkout system allows customers to select prod- ucts by clicking an
“add items to cart” button and then enables them to pay for these products.
Secure Server
The secure server helps provide protection against the loss or modification of
personal information. Secure Socket Layer (SSL) is the most commonly used
tech- nology for secure online transactions. SSL encrypts
(or codes) all data between the shop’s server and the customer’s computer. This
makes it very difficult for third parties to decode any information exchanged such
as credit card numbers. The following diagram shows how a secure server can
protect information passed between the consumer and the merchant:
and we need a Digital Certificate for SSL technology to work. A Digital
Certificate is an electronic ID that helps to show the credibility of a website.

4. Payment Processing Options
There are three payment processing options:
 Third Party Payment Processing Software: These services offer an
alternative to obtaining an Internet Merchant Account. The advantage of
this alternative is that it is possible to start selling online more quickly and
easily. There are registration, transaction, and month- ly fees attached.
There may also be a longer holdback period before the balance of a sale is
turned over to the merchant.PayPal (www.paypal.com) is the most popular
third-party online service provider. Both PayPal and merchant accounts
charge transaction fees, including a percentage of the sale plus a flat fee
per transaction. Charges based on the number of transactions may be
appropriate for micro businesses or where the number of transactions is
limited.
 Internet Merchant Account:An Internet Merchant Account is an account
issued by a financial institution that enables a business to accept credit
card payments online. Businesses must obtain a separate Internet Merchant
Account for each type of credit card they wish to accept (e.g.VISA,
Mastercard, American Express).
 Manual (Offline) Payment Processing:
You can set up an e-commerce website where users can order online, but
you process credit cards manually rather than rely on online payment
processing options. With this option, credit card information can be
obtained through a secure server and the transaction can be processed
manually. This option is feasible when you have a limited number of
online orders.
Hardware and Software
Hardware: Monitor, Keyboard, Mouse, CPU (tower), Modem, Network card
Software: An operating system (windows), Web design tools, Accounting
software (Quickbooks), word-processing software, spreadsheet stuff

5. (Microsoft Office), graphic design software (Photoshop, illustrator), VOIP
Software, Security software (McAfee, Ad-Aware, Malwarebytes).
Security and Privacy Issues
It is important to be aware of security and privacy issues associated with e-commerce.
Some common security threats include fraudulent use of credit cards, computer
viruses, spam (unsolicited e-mail messages), and theft of computers or information.
Phishing is another type of security threat that involves an e-mail message that looks
like it comes from an official source but links in the message go to a fake website
where you may disclose personal information. Common threats to privacy include
theft of personal information, and inadequate protection of private information. The
following are tips for minimizing security and privacy risks.
 Review the security features/services offered by your web hosting service,
Internet Service Provider,web design and software company.
 Pay attention to security alerts and install security patches as needed.
 Regularly update software and scan for spyware and viruses.
 Regularly backup systems and information.
 Design of an e-commerce website should minimize security threats. For
example, once the consumer
 presses the “buy” button the “back” button should then be disabled.
 Obtain a digital certificate for your website. The digital certificate shows that
any personal data submittedto your site will be encrypted (coded). Two of the
largest certificate authorities on the Internet are:Verisign at
http://www.verisign.com and Thawte at http://thawte.com (source:
www.canadabusiness.ca).
 Avoid storing customer credit card information in your systems. If you are
storing customer informationmake sure it is secure from access by employees
or computer hackers.
 Develop a privacy policy. The policy should outline how information will be
collected and used, and thesecurity procedures that will be used to protect
information from being lost, stolen or tampered with.
 You may want to post this policy on your website. You may also want to
apply for a privacy seal. The privacyseal icon is displayed on the website and
can increase consumer confidence. According towww.entrepreneur.com, two
leading privacy seal programs are TRUSTe and BBBOnline.

6.  Ensure you have SSL technology that encrypts all confidential information
during transmission andauthorization of transactions.
 Ensure you have appropriate security features for storing information. For
example a PCI (peripheralcomponent interconnect: hardware) card is often
added for protection. Another approach is SET (SecureElectronic Transaction)
that has been developed by Visa and MasterCard. With this approach,
sensitiveinformation is not seen by the business and is not stored on the
company’s website. Firewalls should beused to protect the network and
computers from viruses and computer hackers. You should also restrictaccess
to information, particularly sensitive information to authorized employees.
 Review other fraud prevention tools and assess if they are right for you. For
example, Address VerificationService (AVS) compares the information in the
customers’ addresses with records stored by card-issuingbanks. Major credit
card companies also have verification systems. Three-digit codes printed on
the backof major credit cards can help you assess if customers have legitimate
cards.
 Always verify customer addresses.
 Be suspicious of large orders or requests for multiple copies of the same
product, especially if thecustomer asks for rush delivery.
 If you are selling valuable products that are easily resold consider whether you
need advanced fraud protectionservices provided through gateway providers
(e.g. fraud filters to screen for suspicious activity).
4. Company Profile
Amazon.com has always sold goods out of its own warehouses. It started as a
bookseller, pure and simple, and over the last decade has branched out into additional
product areas and the third-party sales that now represent a good chunk of its revenue
(some estimates put it at 25 percent). Both retailers and individual sellers utilize the
Amazon.com platform to sell goods. Large retailers like Nordstrom, Land's End and
Target use Amazon.com to sell their products in addition to selling them through their
own Web sites. The sales go through Amazon.com and end up at Nordstrom.com,
Land's End.com or Target.com for processing and order fulfillment. Amazon
essentially leases space to these retailers, who use Amazon.com as a supplemental
outlet for their online sales. Small sellers of used and new goods go to Amazon
Marketplace, Amazon zShops or Amazon Auctions. At Marketplace, sellers offer

7. goods at a fixed price, and at Auctions they sell their stuff to the highest bidder.
Amazon zShops features only used goods at fixed prices. If an item listed on zShops,
Marketplace or Auctions is also sold on the main Amazon.com, it appears in a box
beside the Amazon.com item so buyers can see if someone else is selling the product
for less in one of the other sales channels.
The level of integration that occurs on Amazon is a programming feat that few (if
any) online sales sites can match.Another sales channel called Amazon Advantage is
a place where people can sell new books, music and movies directly from the Amazon
warehouse instead of from their home or store. Sellers ship a number of units to
Amazon, and Amazon handles the entire sales transaction from start to finish. In all of
these programs, Amazon gets a cut of each sale (usually about 10 percent to 15
percent) and sometimes charges additional listing or subscription fees; in the case of
Amazon Advantage, the company takes a 55 percent commission on each sale. The
Advantage channel is something like a consignment setup, a sales avenue for people
who create their own music CDs or have self-published a book and are simply
looking for a way to get it out there.

8. One of the latest additions to Amazon's repertoire is a subsidiary company called
Amazon Services. Through Amazon Services, Amazon sells its sales platform,
providing complete Amazon e-commerce packages to companies looking to establish
or revamp their e-commerce business. Amazon sets up complete Web sites and
technology backbones for other e-commerce companies using Amazon software and
technology. Target, for instance, in addition to having a store on Amazon.com, also
uses Amazon Services to build and manage its own e-commerce site, Target.com.
But selling goods isn't the only way to make money with Amazon.com. The Web
site's affiliate program is one of the most famous on the Web. Through Amazon's

9. Associate Program, anyone with a Web site can post a link to Amazon.com and earn
some money. The link can display a single product chosen by the associate, or it can
list several "best seller" products in a particular genre, in which case Amazon updates
the list automatically at preset intervals. The associate gets a cut of any sale made
directly through that link. The cut ranges from 4 percent to 7.5 percent depending on
which fee structure the associate signs up for (see Amazon Associates for complete
program details). The associate can also take advantage of Amazon Web Services,
which is the program that lets people use Amazon's utilities for their own purposes.
The Amazon Web Services API (application programming interface) lets developers
access the Amazon technology infrastructure to build their own applications for their
own Web sites. All product sales generated by those Web sites have to go through
Amazon.com, and the associate gets a small commission on each sale.
Software Development Centers
While much of Amazon's software development occurs in Seattle, the company
employs software developers in centers across the globe. Some of these sites are run
by an Amazon subsidiary called A2Z Development.[58]
• North America
USA: Cambridge, MA;[59] Charleston, SC;[60] Cupertino, CA;[58] Orange
County, CA; San Francisco, CA; San Luis Obispo, CA;,[61] Seattle,
WA; and Tempe, AZ
Canada: Vancouver, British Columbia and Mississauga, Ontario
• Europe
UK: Slough (England), London (England) and Edinburgh (Scotland)
Ireland: Dublin
Romania: Iaşi
• Asia
India: Hyderabad, Bangalore and Chennai
Japan: Shibuya (Tokyo)
China: Beijing
• Africa
South Africa: Cape Town

10. 5. E-Commerce Design of Amazon
E-Commerce web design is made easy with Amazon Webstore. Using online tools
that can control the website’s look and feel and quickly make changes with no
technical or HTML expertise. This powerful set of layout and merchandising tools
allow us to design and publish our website without technical resources. The online
store builder makes it easy to update and manage the website according to our
business needs. With a little effort we can develop a branded site that will show off
our business to the world.
Template Designs
Amazon Webstore has built-in website templates and website themes that
make launching our store quick and easy. These templates are completely
customisable and give your store a professional look and feel with very little
effort.
Custom Navigation and Product Categories
Webstore lets you build online store categories and product categories to suit
the needs of your business and brand. For example you can categorise clothing
items by season as opposed to gender or categorise electronics by
manufacturer. Additionally, you can manage multiple releases of your site
navigation and category structure making changes easy to implement and
release.
Merchandising Widgets
Leverage the eCommerce expertise of Amazon with built-in Merchandising
widgets that help you promote products to customers based on your business
rules and your customer’s actions on your website. Amazon personalization
widgets allow to efficiently merchandise a large catalogue helping you
increase average order value
Customer Reviews
Allow your customers to leave reviews of products specific to your business.
Customer reviews can be automatically filtered for known offensive language.
Additionally, Webstore gives you full control the reviews so you can delete

11. offensive or inaccurate posts.
Page Masters
Page Masters give you full control of your website’s look-and-feel. By
creating page masters you can quickly modify your website and apply the
changes across your entire site. With page masters you can define custom
layouts to match your brand and desired look-and-feel.
Built-in Hosting for Images and Assets
You can upload your product images and web page assets directly through the
Webstore interface. This makes it easy to use these images throughout your
website and leverages the powerful Amazon hosting and caching architecture
built in to Webstore. This image and asset caching makes your site load faster
regardless of the customer’s location and ensures both a positive customer
experience on your website as well as increased reliability and responsiveness
for search engine robots – helping with your sites search engine optimization.
Publish website updates without IT support
Once you’ve completed designing your eCommerce website you can preview
updates to the website design and merchandising that you have made. The
Webstore preview feature allows you to access and share a completely active
version of your eCommerce website so you can test the experience end-to-end
before releasing it to your customers. Your site can be published to production
with no IT resources making frequent or emergency changes a breeze.

12. References
http://www.edexcel.com/migrationdocuments/BTEC%20Nationals%20from%202010
/Unit-8-e-Commerce.pdf
http://www.studymode.com/subjects/what-software-and-hardware-used-to-
create-your-ecommerce-site-page1.html
http://webstore.amazon.co.uk/integration-with-other-systems-
features/b/1327838031?ie=UTF8&title=integration+with+other+systems
http://en.wikipedia.org/wiki/File:Amazon_warehouse_Glenrothes.jpg
http://aws.amazon.com/