Unit -1

 Advantages of E-Commerce to Customers
 

Reduced Prices:- Costs of products are reduced since the stages along the value chain are decreased. For instance, intermediaries can be eliminated by the company directly selling to the customers instead of distributing through a retail store.

24-Hour Access:- Online businesses never sleep as opposed to brick and mortar businesses. E-Commerce allows people to carry out businesses without the barriers of time.

 Global Marketplace:-  Consumers can stop anywhere in the world. Currently according to World Trade Organization (WTO) there are no custom duties put on products bought and traded globally electronically.  This also provides wide selection of products and services to consumers.

More Choices: - Provides consumers with more choices. For e.g. before making any purchase, customer can study about all the major brands and features of any item. It also provides consumers with less expensive products and services by allowing them to shop in many places.

Advantages of E-Commerce to Businesses

Increased potential market share:- The internet enables businesses to have access to international markets thereby increasing their market share. Companies can also achieve greater economies of scale.

Low cost Advertising:- Advertising on the internet costs less than advertising on print or television depending on the extent of advertisement. Advertising on the internet itself is less costly since there is less cost associated with it in terms of printing and limited television spots.

Low barriers to Entries:- Anyone can start up a company on the internet. Start-up costs are a lot lower for companies since there is less need for money for capital.

Strategic Benefits:- The Strategic benefits of making a business e-commerce enabled is that it helps reduce the delivery time, labour cost and the cost incurred in document preparation, data entry, error detection etc.

Disadvantages of E-Commerce


Hidden Costs:- Although buying online is convenient, the cost of this convenience is not always clear at the front end. For e.g. on-line purchases are often accompanied by high shipping and re-stocking fees, a lack of warranty coverage and unacceptable delivery times. In fact, too many e-commerce companies have developed a reputation of overcharging for shipping and handling.

Lack of Security:- One of the main roadblocks to the wide acceptance of e-commerce by businesses and consumers alike is the perceived lack of adequate security for on-line transactions. For e.g. Consumers are growing increasingly worried about providing credit card information over the Internet.

During the past few years, the press has been filled with reports about hackers breaking into e-business and stealing credit card information.

Lack of Privacy:- Customers also worry about the privacy implications of data gathered by organizations of all types and sizes. Even at the simplest data level, sales information is stored in databases connected to web servers, thus exposing the information to cyber criminals. Because data gathering on the web is so easy, databases routinely contain information about customer purchasing habits, credit information and so on. In many cases, companies sell customer database information to marketing companies. In turn, the marketing companies engage in massive e-mail campaigns to attract new customers. It doesn’t take long for the customer’s email box to be filled with unwanted email (also known as Spam).

Network Unreliability:- Although the Internet is designed to overcome the single point of failure problem, there have been several well-publicized incidents of network failures during the past few years. Network reliability problems may be generated by such factors as:-Equipment failure in the network connection provider. Accidental problems caused by nature-such as lightning, floods, earthquakes that affect communication lines. Long response time due to increased network traffic or inadequate bandwidth.

Low Service Levels:- Another common complaint about doing business online is the low level of customer service that online companies tend to provide. Although technology has automated business transactions to a large extent, there remains a real need for the human touch. Therefore e-commerce websites must provide:-

A pleasant and problem free pre-ordering and ordering experience.

The website design is an important interface.

Readily available easily used feedback options.

Quick complaint resolution.

Timely and low-cost shipping delivery to customers.