What are the advantages of e-commerce and what are the disadvantages?

Many of us at some point in time bought something online while relaxing on a sofa in the evening, maybe it was then that I felt a lot of advantages of e-commerce?.

This is known as e-commerce (not hanging out on the couch for a bit!) and has been around for quite some time but we shouldn’t assume that we all fully understand the benefits of having an e-commerce website.

While some businesses have decided to go 100% online, others choose to have a retail store and an online store that complement each other.

What is e-commerce?

Before you can dive into the benefits of e-commerce, you must know what they include.

Electronic commerce includes any commercial transaction that involves the transmission of information over the Internet.

This is a broad description for a reason. E-commerce can take many different formats. It can include a branded website, mobile apps, marketplaces like Amazon and eBay, and social media platforms like Facebook Marketplace, Instagram Shoppable Ads, and Pinterest Buyable Pins.

While there are many ways to sell to consumers online, the main advantage of selling online is that you can sell to consumers anywhere, anytime.

You can meet the customer wherever and whenever they shop. It doesn’t matter if they’re sitting at home on the couch, on their lunch break at work, or even using your app in a physical store — they can complete an online purchase.

So, what are the advantages of e-commerce for business:

Advantages of e-commerce over traditional trade

When you read the following list of benefits of e-commerce for businesses and customers, you will feel that e-commerce is the holy grail of retail.

1. Bypass geographical restrictions

If you have a physical store, you are limited to the geographic area you can service. With an e-commerce website, the whole world is your playground. In addition, the advent of e-commerce i.e. electronic commerce on mobile devices has removed all remaining restrictions of geography.

2. Gain new customers through search engine visibility

Physical retail is driven by brands and relationships. In addition to these two drivers, online retail is also driven by traffic from search engines. It is usual for customers to follow a link in search engine results And they land on an e-commerce site they’ve never heard of.

This additional source of traffic can be the turning point for some e-commerce businesses.

To achieve more visibility in the search results, you must pay attention to search engine optimization (read more about seo).

3. Lower costs

One of the most tangible positives of e-commerce is the low cost. A portion of these lower costs can be passed on to customers in the form of discounted rates. Here are some of the ways in which costs can be reduced with e-commerce:

• Advertising and marketing: Search engine traffic is organic, andPay per click and traffic from social media from some of the advertising channels that can be cost effective.
• Staff: Automating checkout, invoicing, payments, inventory management, and other operational processes reduces the number of employees required to run an e-commerce setup.
• Real estate: This is a no brainer. An e-commerce merchant does not need a prominent physical location.

4. Quickly locate the product

It is no longer a matter of pushing the cart to the right aisle or searching for the desired product. On an e-commerce website, customers can click on the easy navigation or use a search box to instantly narrow their product search. Some websites remember customer preferences and shopping lists to make repeat purchases easier.

5. Eliminate travel time and cost

It is not unusual for customers to travel long distances to get to their favorite physical store. E-commerce allows them to visit virtually the same store with just a few mouse clicks.

6. Submit comparison shopping

E-commerce facilitates comparison shopping. There are many online services that allow customers to browse various e-commerce merchants and find the best prices.

7. The ability to prepare and manage deals, coupons and group purchases

While there are physical equivalents to deals, deals, coupons, and group buying, online shopping makes them more convenient.

For example, if a customer has a great discount coupon for turkey in one physical store and toilet paper in another, you may find it unfeasible to take advantage of both discounts. But the client can do it online with just a few clicks of the mouse.

8. Provide abundant information

There are restrictions on the amount of information that can be displayed in a physical store. It is difficult to equip employees to respond to customers who need information across product lines.

E-commerce websites can easily make additional information available to customers. Most of this information is provided by vendors and it costs nothing to create or maintain.

9. Create targeted communications

By using the information the customer provides in the registration form, and by placing cookies on the customer’s computer, an e-commerce merchant can access a lot of information about their customers. It, in turn, can be used to deliver relevant messages.

Example: If you are searching for a specific product on Amazon.com , it will automatically display lists of other similar products. Also, Amazon.com may send you email about related products.

10. It remains open all the time

Store hours are now 24/7/365. E-commerce websites can run all the time. From a merchant’s perspective, this increases the number of orders they receive. From the customer’s point of view, an “always open” store is more convenient.

11. Establishing markets for specialized products

Buyers and sellers of specialty products can have a hard time locating each other in the physical world. Online, it is just a matter of the customer searching for the product in a search engine.

An example could be the purchase of obsolete parts. Instead of throwing out old equipment due to lack of replacement parts, today we can locate parts online with great ease.

A quick summary of some of the advantages of e-commerce

1. Reaching a wider customer base You are not restricted to your local area with an e-commerce site; You can go national or international very easily
2. win new customers Through search engines and general online marketing
3. always available – Open 24 hours a day, 7 days a week, 365 days a year
4. Ease of use for your customers Online shopping is faster, more convenient and simpler; So, encourage more the sales
5. Low overheads (generally compared to traditional retail stores) Ease of applying special offers, coupons, discounts, etc.
6. Increase product range – Increase sales by promoting more products than you can promote or stock in a retail store.
7. Additional information about the product – It is easier to provide more information online for each product than in a traditional retail store to increase brand awareness
8. Easy to track analytics, monitor customer behavior, etc.

After we got acquainted with the advantages of electronic merchants, it is time to learn about some of the disadvantages of electronic trading.

Disadvantages of electronic trading

Disadvantages of e-commerce can be broadly categorized into two main categories:

1. Technical defects
2. Non-technical defects

1. Technical defects

• There can be a lack of system security, reliability, or standards due to poor e-commerce implementation.
• The software development industry is still evolving and changing rapidly.
• In many countries, network bandwidth can cause a problem.
• The seller may require special types of web servers or other software, separating the e-commerce environment from the web servers.
• Sometimes, it becomes difficult to integrate your e-commerce software or website with existing applications or databases.
• There may be software / hardware compatibility issues, as some e-commerce software may be incompatible with some operating systems or any other component.

2. Non-technical defects

• The initial cost – The cost of building/building an e-commerce application in-house can be very high. There may be a delay in launching the e-commerce application due to errors and inexperience.
• user resistance Users may not trust the site as an anonymous seller. This mistrust makes it difficult to convince traditional users to move from physical stores to online/virtual stores.
• Security / Privacy – It is difficult to guarantee security or privacy in online transactions.
• Not touching or feeling the products while shopping online is a defect.
• still E-commerce applications Rapidly evolving and changing.
• Internet access is still less expensive and inconvenient to use for many potential customers, for example, those who live in remote villages.

Advantages of e-commerce: Frequently asked questions

Final words

Convinced that your business could benefit from the wonders of e-commerce? Are the benefits of e-commerce enough for you now? Start an online store ?

So here are 10 advantages of e-commerce that make commerce a great way to grow your business. However, simply adding an e-commerce site is only part of the equation.

You also need to consider how an online application will be processed in the back office. Re-entering customer and order information into your order processing software would be an inefficient (and tedious) way to do this…

This is a winning formula for your business if you want to start selling online or want to improve the way you sell online.

Overall, it is very easy, low risk and low cost to start an e-commerce business, whether or not you already have a physical store. As long as you choose your products wisely and have a proper business plan in place, there is a lot of potential for passive income and high ROI in the long run.

Sure, e-commerce may not be for everyone, or the time may not be right for you, but it’s important to consider an e-commerce-based strategy if you have a retail operation or even an idea that you want to put to work over the next several years.

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