What is E-commerce | Advantages and Disadvantages

What is E-commerce

The full name of E-commerce is Electronic Commerce. It is a comprehensive trading system. In which goods and services are bought and sold over the Internet.

Simply put, E-commerce is that in which goods and services are bought and sold through electronic means. Items include Digital Cameras, Music Systems, Clothing, Accessories etc.

Whereas services include Digital Marketing, Websites, Applications, etc. E-commerce business includes Business to Business, Business to Consumer, Consumer to Business and Consumer to Consumer etc.

E-commerce sales in the US stood at $870 billion in 2021. It saw an increase of 14.2 percent in comparison to 2020. Whereas there was an increase of 50.5% in comparison to 2019. E-commerce represents 13.2% of total retail sales.

E-commerce also helps companies a lot in business transactions. Along with this, it also creates new online business opportunities globally. Commerce is one such economic activity.

Which involves buying and selling of goods and services. If you want to do a transaction in E-commerce, then there are some stages for it. Like, first of all you have to go to the website and search.

After that you have to decide which product you want to buy. You have to order that product. After that you have to pay for it. You can also make payment through Credit Card, Debit Card, Net Banking or Cash on Delivery etc.

After that you will get that item delivered to your home. All three are involved in this whole Process, including Customers, Business Partners, Vendors, etc.

In e-commerce, goods and services are exchanged through Digital Networks. There is no scope for physical contact or physical exchange etc. This change has come only in the last few decades with the speed of Information Technology.

It has given a new form to marketing, in which buyer and seller do not meet each other physically. The entire transaction of these people is done only with the help of Online Communication. Computer plays a very important role in this.

Product Information

Business transactions and services are executed through electronic media such as Communication Networks, Websites, E-mails, etc. Through E-commerce, the customer can also know about the Manufacturers, Distributors, Suppliers and Service Providers etc.

Along with this, he also gets information about the Quality, Price, Size, Color etc. of their products. All this information is available to him through the catalog available on the website.

Along with this, the consumer can also compare his products through many websites. Like he can easily know the Price, Quality, Characteristics, Features etc. through other website.

To operate an e-commerce system, the seller has to first produce the content. After that he has to do digitization. At the same time, it has to link the Electronic Network and the Electronic Payment System.

Along with this, electronic delivery of goods also has to be arranged. An Electronic Payment System is a system in which financial exchange takes place between Buyers and Sellers.

All this happens in the online Environment. And this is through digital financial instruments such as Credit Card Numbers, Electronics Checks, Digital Cash Provided by Banks, etc.

Advantages

The biggest advantage of E-commerce is that through this, access to the global market can be made easily. E-commerce allows any individual to sell their products across the country and across the Globally.

E-commerce business becomes a potential market for the Enterprise. Through E-commerce, the customer can buy the same at any time and anywhere. Business owners can sell their goods all over the world by sitting in the comfort of their home.

E-commerce reduces the cost of business transactions. So that the E-commerce company can earn higher margin. Because their transaction cost is reduced to a great extent. Simultaneously a website is open 24/7.

It can take orders anytime. It can deliver goods and receive payments at any time. At any time, the E-commerce company can provide information about the product or service to its customers.

Starting an E-commerce business becomes like a passive income for the company. Even when its owner sleeps at night, he continues to earn. Money keeps on increasing in his Bank Account.

Consumers also have a lot of benefits in e-commerce. For him the whole world becomes like a shop. He can evaluate the same product by visiting all the websites, before buying the products. The consumer gets a wide choice.

In this, the customer also gets a lot of convenience. Customer can shop from anywhere from home or office. He doesn’t need to stand in long lines. Nor does he need to talk to the salesman.

He gets information about the Model Number, Price, Features etc. of the Products and the payment also becomes online. Business firms can establish direct contact with their customers through E-commerce.

They don’t need a middle man. The middle man moves completely from the middle. Along with this, consumer complaints can easily be done through E-commerce.

This also increases customer satisfaction. Feedback is easily available to the E-commerce company. According to which companies improve their product and service.

Disadvantages

Security is the biggest problem for online business. Because sometimes customers do not want to give their credit card number to the website. Because the cases of credit card fraud have increased a lot in recent times.

Data protection and system integrity is a huge concern. Because it handles the data. Computer virus can cause damage to data corruption, file backup, storage problems etc.

Along with this, the danger of hackers also remains, lest they get access to files and corrupting accounts. The cost is very high in e commerce. Even if the company saves money by cutting out the intermediates.

Save money by reducing the cost on other things. But in startups, the expenses of Hardware, Software, Training of Employees, Cost of Maintaining Websites etc. increase.

Along with this, there are some products that consumers do not want to buy online, such as home furnishing. People do not like to buy it online at all. Like for example Sofa, which people buy only after seeing how comfortable it is.

Product details, catalogs and other information are easily available to you on the E-commerce website. But their access is easily accessible to your competitors. The competitor can copy these easily.

Can easily extract Business Intelligence. Along with this, customers are not loyal on e-commerce. Customers buy goods from where they get the best deals.

There is a shortage of skilled people in E-commerce. Because of the traditional organizational structure and poor work culture, the growth of e-commerce has taken a long time.

Along with this, E-commerce may also face problems like shipping delays etc. The biggest problem that comes in e-commerce business is the return of goods.

If the customer does not like the goods or if there is any mistake. So they return them. A kind of uncertainty remains about the goods and at the same time the seller has to refund the pay.