ADVANTAGES AND DISADVANTAGES OF E-COMMERCE

E-commerce or the act of selling products or services online, as opposed to selling in brick and mortar units, has reshaped the modern market in recent years, but this new form of commerce comes with its own sets of advantages and disadvantages over traditional methods. 

It is important, therefore, for businesses to look beyond the hype and develop their own perspective on the true value of e-commerce - to the business environment and to consumers - because, interestingly, there are many benefits to consumers that could actually be a disadvantage. for e-commerce.

Among the main advantages of starting an e-commerce business are the elimination of geographical limitations, gaining new customers with visibility for search engines, lower costs for maintenance and rent, and a greater capacity for goods and deliveries, while the main disadvantages of Launching an e-commerce business includes the personal loss of physical retailers, the delay in delivering goods or services, and limiting the availability of goods because certain goods cannot be sold online.

Explore the following article to find out if the e-commerce adventure is right for your business.

01 - Professionals compared to physical distributors

Small woman business owner packing laptop owner in the Internet workshop could be the most important aspect of modern society, governing everything from political discourse and higher education to how we conduct ourselves and business our. No wonder changing your business into an ecommerce model would have many benefits.

In addition to eliminating the need for long lines at physical stores, e-commerce sites allow people who are not located in major urban areas to access remote stores. Ecommerce, therefore, opens new markets for your business, allowing you to develop a new business model that targets your expanded consumer base, especially one that is based on good search engine optimization for e-commerce, to generate more free website traffic through the use of consumers by search engines.

Because you also eliminate the need for a physical store, your business can save money on rent and maintenance, such as utilities and maintenance. In addition, because there is no limit to the number of items that can be sold online, the store's stock may expand exponentially, moving to an e-commerce model, and the store may remain open 24 hours a day, so that consumers can search for the goods. at leisure.

Thanks to e-commerce, consumers can instantly buy digital products such as music albums, videos or books, and stores can now sell unlimited copies of these digital items. This also reduces your payroll issues because you no longer need dozens of employees a week to sell albums, books or movies.

Ecommerce also allows your business to grow faster than physical retailers because they are not linked to physical restrictions, such as inventory storage. Of course, logistics become more and more difficult as a business grows, but logistics can also expand, with the choice of third-party logistics provider.

Since the e-commerce merchant captures contact information in the form of email, sending automated and personalized emails is quite easy. In addition, these companies and metrics allow for the higher customization of the stores through the use of cookies and other methods of monitoring consumer behavior.

Because the entire supply chain can be interconnected with e-commerce systems in the business environment, purchases become faster, more transparent and cheaper and there is no need to deal with banknotes or cash, which further reduces costs and opportunities. for accounting errors.

Finally, e-commerce allows your business to track logistics, which is the key to a successful e-commerce company, as well as to sell small volume goods. Although conventional retailing focuses on storing fast moving goods, the economy of e-commerce allows for slow and even outdated products to be included in the catalog.

02 - Brick and mortar stores

While e-commerce may be the perfect choice to solve your business problems, there are still a number of disadvantages to moving from selling to a physical location to using online retail services.

Many consumers still prefer to visit brick-and-mortar stores because of their personal touch and the relationship that customers develop with a retail location. In addition, many customers want to experience the product before buying, especially when it comes to clothing, but e-commerce eliminates this luxury.

Credit card security and fraud are also huge risks when dealing with online shopping, consumers are at risk of identity fraud and other dangers as their personal details are caught by e-commerce businesses, while businesses risk phishing attacks and other forms of security fraud; both can suffer from credit card fraud.

As a result, consumers are afraid of their inability to identify scammers and scams, which means that your site needs to be extraordinarily protected and verified in order for most consumers to trust its use.

If shopping refers to instant gratification, then consumers are left empty handed for some time after they made a purchase on an e-commerce site because they have to pay more for shipping or wait a few days while the postal service does its job. In addition, if they are not satisfied with their order, many e-commerce retailers need to issue a refund, which means your business is expanding its reverse logistics functions, which means returning the goods and reimbursing the costs.

Speaking of costs, there is a multitude of regulations and taxation that comes with opening an e-commerce store, and regulatory authorities are not yet clear about the tax implications of e-commerce transactions, which is especially true when the seller and the buyer is located in different territories.

03 - Good for consumers, bad for business

Some concerns do not necessarily just fit the pros or cons of these arguments - these unique issues are an advantage for buyers and consumers, while increasing difficulties for businesses, which means that while more customers might come to the store, the business suffers in another way.

Although it is easier for consumers to compare prices due to more shopping and website search engines, sellers may find that they are too restrictive of their business income because many of them are removed from the set of considerations. consumer.

Although there is nothing about e-commerce that makes the intrinsic targeting of discounts, how the online business has evolved has led to lower prices online, which is an advantage for the buyer, but a disadvantage for the seller.

The consumer experiences the convenience of home goods delivery, but the logistics involved in providing each individual item adds substantial pressure to the e-commerce operation, making it excellent for profits and keeping customers, but awful for logistics and management.

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