E-commerce refers to the buying and selling of goods through electronic medium such as the internet or other computer networks and has become increasingly popular with the widespread use of technology.
Advantages of E-commerce
– Convenience: the transactions are done on one’s own time, as it does not require one’s physical presence at a business location.
– Reduces production cost: this technology reduces or eliminates labour costs, office rentals, utility bills etc.
– Eliminates processing errors: which in most cases are due to human errors.
– It increases the operational efficiency of a business, by reducing time taken to carry out services (processing cost), operational cost, advertising and marketing costs, distribution cost etc.
– It expands the customer base of a business.
– Services are available every day, all day i.e. 24/7
– Collection of customer data usually requires customers to fill out a contact information section on first use.
– Allows better business analysis, as all information regarding the sale of respective goods are easily accessible such as, what age group purchases the product, the volume purchased etc.
Disadvantages of E-commerce
– Customers have to rely on reputation of companies, as they are not able to physically examine a product before purchasing it.
– Delivery concerns: the time taken for the product to reach its intended destination if it reaches at all, and whether the correct product sent is an issue of concern for customers.
– Credit Card risk: customers are conscious of the risks of providing personal data and making payments electronically since this form of business is susceptible to hackers.