Ever since the invention of the internet, businesses have been coming up with ways to utilize it to sell goods and services and market their products online. Today there are hundreds of different ways money is exchanged online, from traditional businesses using the net to advertise or sell products, to entirely new businesses that have sprung up around the internet that have no physical presence whatsoever.
The best bit is, e-commerce isn't just reserved for big companies – pretty much anyone can get involved in the internet economy and many people set up their own businesses from home, either as a full time job or just as a hobby to make a bit extra on the side. Here are some of the main forms of business online:
Ordering
Many traditional businesses now sell their products online – some have even moved to exclusively using the internet to process orders. Websites often use a 'shopping cart' model, where you can look around the different products a company offers and click the ones you want to buy. Once you have selected everything you want, you 'proceed to the checkout' by clicking a button and view your entire order. Typically customers pay by credit card or Paypal, which is an online payment system that allows you to pay using just your email address and a password.
A good example of a site with a massive ordering system is Amazon.com. Take a look at Amazon.com here.
Market Place
While some sites sell products from just one company, other sites allow anyone to sell anything they want on them. The best example of this is eBay.com. At eBay you can list anything, from old items around your house that you no longer use, to items you brought wholesale and are now selling off at a profit. eBay is also a great place to look for cheap products too. Often you find things much cheaper there than if you brought them at a store.
Many people set up businesses using eBay and have a full time job buying and selling online. Some use wholesale directories like this one to find products at the cheapest price they can and then sell them off on a regular basis. Many people make this kind of buying and selling their hobby, and really enjoy looking for the best deals. Have a look at eBay here.
What are digital products?
Some products exist only on a computer, however they are still sold for real money. Examples of these include eBooks (which are just like normal books but instead of a hard copy they are just a file which you can download), training courses (on anything, from learning Spanish to learning about internet marketing), software and much much more.
The advantage of selling digital products is that you don't have to pay any manufacturing or distribution costs. Once you've made the product, everything you sell is virtually profit! This is why many people create their own digital products themselves, for example writing an eBook on a subject, and then selling it.
What are online scams? How do I avoid them?
Unfortunately, because anyone can access the web, it's not just nice people who you will encounter online. There are many people who try to trick you into giving over confidential information so that they can steal from you. It is an unfortunate reality, but when you're using the internet, you have to be on your guard. However you shouldn't let this discourage you from using the web or even purchasing products on the web. You just have to be mindful of what you're doing and skeptical of what you read on the internet. A good rule of thumb: If it really seems just too good to be true, it may well be!
Using your credit card online:
Your credit card is usually the simplest and safest way to pay online as false charges can be disputed. That being said it's important that you take precautions any time you give out your credit card information. Never give credit card information out over email as it is not secure, only enter it into a proper secure online form. You can see whether a web page is secure by the little padlock that will appear either in the status bar in the bottom right of your browser or next to the web address at the top.
Also the web address with change from 'http' to 'https'. If you don't see this, don't buy or check why it's not showing. Finally, make sure that you check your credit card bill every month. If charges appear that you don't recognize, chase them up with your credit card company immediately. Most of the time false charges can be recovered.
Five most frequent online scams:
Auction Fraud:
Auction fraud is one of the most common internet scams and occurs when you buy something from a marketplace site like eBay, make the payment, but never receive the item. Chasing down the seller often proves fruitless and wastes more time and money.
HOW TO AVOID:
Be careful when buying anything online. If the price of an item just seems way too low, you need to look in to things a bit more closely. Look at sellers feedback on their eBay or auction profile. Do they get good feedback? Do they have a lot of negative comments? Do they sell lots of items all the time? Use these factors to decide whether the person selling the item is reputable. For example don't buy from anyone who doesn't have any feedback or a feedback rating of less than 5.
Phishing Scams:
A phishing scam is when you receive an email requesting that you urgently update your account information for your bank account or other financial site. The link on the email takes you to a fake site that looks like your banks, but is really a front that will steal your account information and then your money!
HOW TO AVOID:
No reputable bank or financial organizations will contact you by email asking you to update your information. Be wary of any emails you get requesting information. Also check whether the email is actually addressed to you or if it just says 'Dear Sir'. Spelling mistakes and other errors also indicate scams. Finally always remember, if this matter was actually urgent, wouldn't your bank contact you directly by phone?
Nigeria 419 Letter:
You receive an email, usually badly written and full of spelling mistakes, addressed as 'Dear Friend' or 'Dear Sir/Madam'. The letter is usually from some supposed government minister, businessman or executor of a some rich never-before-heard-of extended relative that wants your assistance in transferring a large sum of money (usually multi-millions) in return for a percentage. They request contact information and then typically request money for “taxes”, “lawyer costs” and other fees in advance to make the process happen. People who fall for these scams usually lose several thousand dollars.
HOW TO AVOID:
It is amazing that people do actually fall for this one, but unfortunately some people are just far too trusting! Just think, 'why out of everyone in the world would they be offering this to me?' This is one of those 'too good to be true' scenarios. Don't reply to the emails. Simply delete, or mark as spam.
Postal Forwarding or Reshipping Scam:
You are asked, either via email or after answering an online ad to receive goods for a company that doesn't have a US postal address and then forward them on overseas. You may be asked to receive money wired to your bank account and then transfer to another account after collecting a percentage. In reality the goods were probably purchased with stolen credit card information and you are essentially being used to aid criminals in transferring stolen property. Or you're transferring stolen money to hide the trail of money.
HOW TO AVOID:
Ask yourself “If these guys were a legitimate company, wouldn't they be able to figure out a proper way to receive mail or transfer money?”. Ignore any requests to transfer goods or funds on behalf of someone you don't know. While you might make a little money in the short term, when the scam gets busted it's you who's going to be left with their hand in the cookie jar!
Congratulations, you have won an iPod/laptop/Xbox/etc:
You see an ad or email telling you that you've won the latest cool new gaget like an iPod or an Xbox, the only thing you have to do is hand over your credit or debit card information to pay for shipping and handling! Great deal right? Except you never receive anything and mysterious charges start showing up on your card.
HOW TO AVOID:
When did you enter a contest to win an iPod? While companies do give away free stuff as part of promotions, they usually want people to enter in order to have their information, or have them join their website or something of value. Randomly receiving a prize is 'too good to be true'. And if this company has the money to buy all these fancy prizes, why can't they fork out $15 for posting it to you?
If you're not sure
If you're ever not sure whether something is legitimate or not one of the easiest ways to check is to do a quick Google search. Read about other people's experiences and you should quickly figure out if they're for real. Although be aware that some people set up defamatory websites or post negative comments about other companies, either because they're competitors or because they had one bad experience with a company (more often than not it's their own fault!). Make sure you read reviews and comments from a few different sources when checking out a website or company.
You may also want to consider emailing the website or company and asking them for more information or to prove their legitimacy. Asking for a mailing address or a phone number can be a great way to find out – scammers will often shy away from giving out that kind of information.
