Advantage And Disadvantage Of E Commerce Pdf

advantage and disadvantage of e commerce pdf

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Before we even dive into the advantages and disadvantages of e-commerce, we will rewind the time to where it all started.

You don't need to be a business expert to know that e-commerce has reshaped the modern marketplace in recent years. How does it help businesses and why do consumers love online shopping? The most successful companies understand all the benefits and drawbacks well before they begin to see growing sales figures.

Limitations or Disadvantages of Electronic Commerce

You don't need to be a business expert to know that e-commerce has reshaped the modern marketplace in recent years.

How does it help businesses and why do consumers love online shopping? The most successful companies understand all the benefits and drawbacks well before they begin to see growing sales figures. The internet might be the single most important facet of modern society. It's no wonder, then, that switching to an e-commerce model comes with significant advantages. E-commerce eliminates the need for physical stores and allows businesses to expand their customer base.

On top of eliminating the possibility of long lines, e-commerce sites offer a huge advantage to both shoppers and stores that aren't located in major urban areas. Your business can also save money on rent, utilities, maintenance, and other costs associated with physical stores.

Since you aren't confined to a set amount of shelf space, there is no limit to the number of items that can be sold online, and your store's stock can expand exponentially. Physical products will still have to be stored somewhere, but storage spaces are often cheaper than retail spaces, and you won't have to worry about factors like foot traffic and parking spaces. Digital products can be sold online with little-to-no overhead cost. Thanks to e-commerce, consumers can purchase music, videos, or books instantaneously.

Stores can now sell unlimited copies of these digital items, without having to worry about where they'll store the inventory. E-commerce also allows your business to scale up easier than physical retailers. When a brick-and-mortar store grows, it needs to consider how it will serve more customers in the same small space.

More employees are needed to expedite check-outs, more of the floor gets dedicated to forming lines, shoppers feel more crowded as customer base and inventory grows. Of course, logistics always get tougher as a business grows, no matter how the business operates. Keeping in contact with customers is often easier for e-commerce businesses. Let customers know about a sale, promote a new product, or just check in with customers for a personal touch—all with minimal effort.

Additionally, web tools like cookies allow for superior store customization and consumer behavior analysis. The benefits consumers enjoy are shared by e-commerce companies when it comes to the supply chain. Consumers like online shopping because they don't have to deal with cash, worry about schedules, or wait in long lines. Procurement becomes faster, transparent, and there's no need to handle currency notes or cash. The result is cheaper, easier transactions with fewer opportunities for accounting errors.

Having everything digitized makes it easier to automatically collect data and crunch numbers. Storage is less expensive, and displaying the product is as easy as adding another item page to your site. While it may initially seem like e-commerce will solve all your business problems, there are disadvantages to switching from a physical location to an online store.

Many consumers still prefer the personal touch and relationships formed at a brick-and-mortar shop. This can be especially valuable to customers shopping for specialized products, as they may want to consult an expert about the best product for their needs.

A solid customer service hotline can't replace face-to-face interaction with a specialized sales rep. Additionally, many customers want to experience the product before purchase, like when shopping for clothes.

Security and credit card fraud are also huge risks when dealing with online shopping. Consumers run the risk of identity fraud and similar hazards every time they enter their details into a site. If your site doesn't convince shoppers that the check-out process is secure, they could get scared out of buying.

On the other hand, businesses run the risk of phishing attacks and other forms of cyberattacks. If one of your employees opens just one malicious link, it could compromise your website functionality, financial information—or worst of all, your customers' information. If shopping is about instant gratification, then consumers are left empty-handed.

They often have to either pay more for expedited shipping or wait for several days until the product arrives. The wait could drive away customers. On June 21, , the U. Supreme Court ruled that states can charge sales tax on e-commerce transactions. But the Supreme Court left it up to states to decide what size of online retailers must pay sales tax, and what that tax rate will be.

That's just one example of the regulatory confusion that has stemmed from e-commerce's rapid growth, and it doesn't even touch on international trade laws. The result is a regulatory patchwork that retailers are responsible for learning, no matter how complicated. Unique issues present an advantage to shoppers while adding difficulty for businesses. Customers might be buying, but the business could suffer in other ways.

Price comparison is a major advantage for online shoppers that can restrict businesses. Consumers can compare prices with a simple click, rather than crossing town to check another store. Many shoppers will search for the absolute lowest price, and if you can't offer it, you will probably lose the sale.

Even if you can offer lower prices, businesses who compete in these price wars will see their profits decline. Buyers love the lower prices, but sellers—not so much. Shipping is convenient for consumers, but it adds inconvenience to the business. The more you ship, the bigger the burden becomes. Logistics and management can become a nightmare, even as the business enjoys steady profit growth and customer retention. The Balance Small Business uses cookies to provide you with a great user experience.

By using The Balance Small Business, you accept our. E-commerce Basics. By Full Bio Follow Linkedin. Follow Twitter. Ajeet Khurana is a former writer for The Balance Small Business, and has more than two decades of e-commerce experience.

Read The Balance's editorial policies. E-Commerce Advantages. E-Commerce Drawbacks While it may initially seem like e-commerce will solve all your business problems, there are disadvantages to switching from a physical location to an online store.

E-Commerce - Advantages

Though e-commerce offers many advantages to customers, business, society and nation, there are still some areas of concern that need to be addressed. The following are some of the limitations or disadvantages of e-commerce. The biggest drawback of e-commerce is the issue of security. People fear to provide personal and financial information, even though several improvements have been made in relation to data encryption. Certain websites do not have capabilities to conduct authentic transactions. Fear of providing credit card information and risk of identity limit the growth of e-commerce. Many websites do not have high encryption for secure online transaction or to protect online identity.


In simple words, electronic commerce involves buying and selling of goods and services over the internet. Page 3. ○ E-Commerce is the process of carrying out.


20 Ecommerce Advantages and Disadvantages You Need to Know

Online retailing is growing at an astonishing rate, with online sales now accounting for around one quarter of the total retail market. Retailers who ignore e-commerce may see their trade lessening as customers continue to shift to ordering products online. However you need to think carefully and weigh all the advantages and disadvantages - backed by good market research - before deciding on whether or not to trade online.

Before you decide how best to run your business , you should consider the e-commerce advantages and disadvantages. It gives them some unique advantages over their store-bound competitors. The biggest advantages are the low costs, the flexibility and speed, and the high levels of data.

There's no doubt that the ability to sell online has made many businesses viable and profitable. Like all business models, eCommerce has its advantages and disadvantages. It's important to get a good handle on the pros and cons so you can be informed when making your strategic decisions:. There are many obvious and not-so-obvious pros to doing business online. Understanding exactly what they are can help you leverage them to your advantage:.

Grow your retail business

Using e-commerce, organizations can expand their market to national and international markets with minimum capital investment. An organization can easily locate more customers, best suppliers, and suitable business partners across the globe. E-commerce helps organizations to reduce the cost to create process, distribute, retrieve and manage the paper based information by digitizing the information. E-commerce increases the productivity of organizations. It supports "pull" type supply management.

Are you thinking about starting an ecommerce business? These advantages of online business will help you stay excited and motivated throughout your entrepreneurial journey. You came to learn what are the advantages of having an ecommerce business.

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A Larger Market. Customer Insights Through Tracking And Analytics. Fast Response To Consumer Trends And Market Demand. Lower Cost. More Opportunities To "Sell" Personalized Messaging. Increased Sales With Instant Gratification. Ability to Scale Up (Or Down) Quickly And Unlimited "Shelf Space".


The Advantages & Disadvantages of a Business Using the Internet for Business Activity

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E-Commerce: Advantages and Disadvantages

2 COMMENTS

Aya B.

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Are you thinking about starting an ecommerce business? Awesome! It's the right time to enter this field. According to statistics, worldwide.

Javier R.

REPLY

Although it can seem like the internet is the be-all and end-all of business activities, it is always best to take into account the needs of your business and to weigh the advantages and disadvantages of including the internet in your business model.

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