Advantages and Disadvantages of E-commerce

Advantages of E-commerce

We can categorize advantages of e-commerce into three group:

  1. Organizations and Business Houses
  2. Advantages to Customers
  3. Benefits to Society

Organizations and Business Houses

  1. It makes the whole world a marketplace for a business house. Since, Internet is a world-wide network and by creating an e-commerce enabled website a business house can reach any customer anywhere in the world. It does not need a huge amount of investments for this, rather a company can quickly locate not only more customers but also the best suppliers and most suitable business partners all over the world.

  2. A website requires comparatively very less investment than opening a showroom in the market. This in a way not only reduces product cost and increases seller’s profit margin, but also allows small vendors who cannot afford to have a showroom in the market to sell their products.

  3. When a seller gets an order from a customer through a website, it eliminates the need of a stockist, a retailer etc. and shortens marketing distribution channels. It reduces the cost and not only makes product cheaper but also increases seller’s profits.

  4. It also gives benefits of lowers telecommunication costs because Internet is much cheaper medium of connectivity than other value-added networks (VANs) and telemarketing etc.

  5. In fact, e-commerce also helps small business houses to compete against large companies. When a small business house creates its e-commerce enabled website, it comes at par in reachability with the large business house.

  6. More specific, relevant and detailed information or description about the product can be made easily available on the website itself in soft copy form, rather than printing the brochures etc. which are comparatively difficult to make available to the customer.

Advantages to Customers

  1. A customer is not restricted to buy products available only in the local or nearby markets. Products and services from the whole world are available to him just few clicks away. He only needs to have access to the website of supplier or seller.

    It provides consumers more choices than they could easily locate otherwise. It enables people in developing countries and especially rural areas to buy products and services that are otherwise not available. This includes opportunities to learn professional skills and obtain college degrees, or to receive better medical care.

  2. It lets customer make quick online comparisons of various brands of a product. Since, mostly product features are also listed on the website. And many websites allow a customer to make comparisons of their products with products of other brands. It helps a customer to select more suitable and less expensive products and services.

  3. Enable customers to shop or make other transactions 24×7 from almost any location.

  4. Enable consumers to get customized products, from PCs to cars, at competitive prices.

  5. Enable individuals to shop from home, without the need to travel, resulting in less road traffic and low air pollution.

Benefits to Society

E-commerce brings benefits to our society also. Some people who cannot travel to physical stores or showrooms or at the places where showrooms of a particular brand are not available, those people can shop by visiting company’s website.

It saves their travelling time and fatigue, also helps in reducing traffic and pollution. It also saves fuel. It also saves their time, and people can concentrate on their work.

It also promotes IT and generates employment of technical staff that is in the profession of developing e-commerce websites. It also helps in making society aware of new technological developments.

Disadvantages of E-commerce

These are the following points of disadvantages of e-commerce:

Technological and inherent Limitations

  • Foremost and major limitation of e-commerce is the reachability of Internet. Since, India is still a developing nation, many facilities like electricity; Internet etc. have not yet reached masses. So, they remain deprived of benefits of e-commerce.

  • Another limitation is that operating an e-commerce website needs little technical know-how and technical literacy. But most population in India, especially in rural areas is still illiterate.

  • Still another limitation is that e-commerce being a new technology, many times people refuse to trust the legitimacy of online business and are not comfortable about revealing their personal and confidential details online.

  • Further, e-commerce is not suitable for buying and selling perishable goods and food items. For purchasing such items, people prefer the conventional way of shopping. Similarly, some other high-cost items like jewelry items may also be impossible to be available on the internet.

  • Sometimes, it is very difficult to ensure security or privacy on online transactions. Very frequently, frauds and suspicious phone calls are reported by the people who perform online transactions.

  • Lack of touch or feel of products during online shopping is also a limitation.

  • E-Commerce applications are still evolving and changing rapidly.

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