The 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:
Execution:
Settlement:
After-Sales.
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.
Figure 1: 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.
Figure 2 Consumer
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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