Electronic Commerce and Distribution Channel Selection: A Transaction Cost Analysis

Business environment has undergone through massive evolution since explosive growth of World Wide Web (WWW) and Internet. It affects every aspect necessary to conduct a business transaction - from the beginning point until the end note of a supply chain. Organizations have wider choices in selecting their distribution channels and the Internet has become immensely popular as one of the alternative channels. This paper attempts to use transaction cost analysis to explain an appropriate framework for organizations in selecting their distribution channels. A preliminary conceptualisation of distribution channels using transaction cost analysis is presented and direction for research efforts pinpointed.