Advantages
of electronic commerce
All the advantages of electronic commerce for businesses can be
summarized in one statement:
Electronic commerce can increase sales and decrease costs. Advertising
done well on the web can get even a small firm’s promotional message out to
potential consumers in every country in the world. A firm can use electronic
commerce to reach narrow market segments that are geographically scattered. The
web is particularly useful in creating virtual communities that become ideal
target markets for specific types of products or services. A virtual community
is a gathering of people who share a common interest, but instead of this
gathering occurring in the physical world, it takes place on the internet.
Advantages:
♦ A business can reduce the costs of handling sales inquiries,
providing price quotes, and determining product availability by using
electronic commerce in its sales support and order-taking processes.
♦ Electronic commerce provides buyers with a wider range of choices
than traditional commerce.
♦ Electronic commerce provides buyers with an easy way to customize the
level of detail in the information they obtain about a prospective purchase.
♦ Electronic payments of tax refunds, public retirement, and welfare
support cost less to issue and arrive securely and quickly when transmitted
over the internet.
♦ Electronic payments can be easier to audit and monitor than payments
made by cheque, providing protection against fraud and theft losses.
♦ Electronic commerce can also make products and services available in
remote areas.
Disadvantages
of electronic commerce
Some businesses are less suitable for electronic commerce. Such
businesses may be involved in the selling of items which are perishable or
high-cost, or which require inspection before purchasing. Most of the
disadvantages of electronic commerce today, however, stem from the newness and
rapidly developing pace of the underlying technologies. These disadvantages
will disappear as electronic commerce matures and becomes more available to and
accepted by the general population.
Disadvantages:
♦ Return-on-investment is difficult to calculate.
♦ Many firms have had trouble recruiting and retaining employees with
the technological, design, and business process skills needed to create an
effective electronic commerce presence.
♦ Difficulty of integrating existing databases and
transaction-processing software designed for traditional commerce into the
software that enables electronic commerce.
♦ Many businesses face cultural and legal obstacles to conducting
electronic commerce.
