The e-Commerce Trade Cycle


A trade cycle is the series of exchanges, between a customer and supplier, that take place when a commercial exchange is executed. A general trade cycle consists of:

Pre-Sales: Finding a supplier and agreeing the terms.
Execution: Selecting goods and taking delivery
Settlement: Invoice (if any) and payment.
After-Sales: Following up complaints or providing maintenance.


Finding a supplier and agreeing the terms.
Selecting goods and taking delivery.
Invoice (if any) and payment.
Following up complaints or providing maintenance.

For business-to-business transactions the trade cycle typically involves the provision of credit with execution preceding settlement whereas in consumer-to-business these two steps are typically co-incident.

The nature of the trade cycle can indicate the e-Commerce technology most suited to the exchange.

Commercial transactions that are repeated on a regular basis, such as supermarkets replenishing their shelves, is one category of trade cycle. EDI is the e-Commerce technology appropriate to these exchanges, see Figure 1.

ecom trade cycle 2

Figure 1: EDI Trade Cycle.

Consumer transactions tend to be once-off (or at least vary each time) and payment is made at the time of the order.Internet e-Commerce is the technology for these exchanges, see Figure 2.

ecom trade cycle

Figure 2 Consumer i-Commerce.

The third generic trade cycle is the non-repeating commercial trade cycle and Internet e-Commerce or an electronic market is the appropriate e-technology






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