ADVANTAGES AND DISADVANTAGES OF E-COMMERCE

  

 E-commerce is the process of buying and selling of goods and services on the internet. This is a wide range market. It makes easy for sellers and buyers to sell and buy products and services all over the world without any restrictions. But it has its own advantages and disadvantages which are run simultaneously. 

ADVANTAGES OF E-COMMERCE 

1) LOWER COST- Online business reduces the cost of products because Online business is running without dealers, middle man and suppliers etc. Company has direct contact with their customers. So, it reduces the cost of middle man. 

2) ECONOMY -E-commerce is the economical. There is no need for physical store, insurance and infrastructure investment. In this, business runs world widely without an infrastructural investment. 

3) HIGHER MARGIN- E-commerce has high margin profit because there is less investment and world wide market available. 

4) GLOBAL REACH- E-commerce provides the seller a global reach. All geographical barriers are removed because there is no need to infrastructural investment all over the world. It makes easy for sellers to sell their products world widely without any difficulty. 

5) BETTER CUSTOMER SERVICES- web based customer services are more convenient then calling to a company and involved in time consuming process. Web merchants give their customers a direct access to their accounts which is easy and time saver for  both. 

6) QUICK COMPARISON SHOPPING- E-commerce helps their customers in comparing products and their prices. It makes easy for them to choose as per their needs and requirements without taking much efforts. 

7) KNOWLEDGE MARKET- E-commerce helps create knowledge market,  small groups inside big firms can be funded with money to develop new ideas which helps in boosting the business. 

8) INFORMATION SHARING AND CONTROL- electronic market place helps in improving information sharing between merchants and customers. All promotional and product related information and delivery services are easy handled. 

9) CUSTOMIZATION- digital products are highly customized. They are easily recognized, revised or added according the information about customers taste and requirements.

10) DELIVERY SERVICES- E-commerce provides quick delivery services and better communication with their customers and customer complaints are also addressed quickly. This is a 24×7 functioning business. 

LIMITATIONS/ DISADVANTAGES OF E-COMMERCE

With many advantages, e-commerce has some  disadvantages or limitations or draw backs also. Which are discussed below:

1) SECURITY- security continues to be a problem for online business. Many threats are there in online businesses regarding information stealing, money theft etc. This creates a problem for online business. 

2) START UP COST- start up cost of E-commerce is very high. The setup of hardware and software, training cost of employees, constant maintenance etc. are very high expenses which are involved in online businesses. 

3) HIGH RISK OF FAILURE- E-commerce is an online business plan which increases the risk of failure. Because companies are running on dot com and no physical presence is there, there is hard for people to rely upon it.

4) SYSTEM AND DATA INTEGRITY- data protection and integrity of the system are serious concerns for online businesses. Because viruses cause unnecessary delays, file backups, storage problems etc. Creates problems for online businesses and reduces the trust of their customers. 

5) INTERMEDIARIES –online market has wider range, where sellers and buyers have no boundary restrictions in sharing information and in trading in the absence of intermediaries. But in reality, online business also needs intermediaries of new types which causes to add up in transaction costs. 

6) CUSTOMER SATISFACTION- Online purchasing is not appropriate for every product. Because some products need physical touch at the time of purchasing.  For example- buying furniture need more attention with  physical touch. 

7) SEARCHING AND DOWNLOADING- customers are not aware of all search methods. So, sometimes it becomes Time consuming. Sometimes website also takes lots of time to download because of graphics etc.

8) SHIPPING- Online business is running with the help of shipping and handling services, but it is an extra charge with purchasing of a product. 

9) INTERNET- internet play important role in e-commerce. But sometimes, poor internet connection, heavy internet traffic, loading time etc. may cause lots of problems. 

With all its advantages and disadvantages, e-commerce is still a wider range market for businesses which helps in expanding business worldwide. Every year, e-commerce grows up and overcome its problems. Because it is a modern technology for business. 

DIFFERENCE BETWEEN TRADITIONAL COMMERCE AND E-COMMERCE

 

E-commerce is an extension of traditional commerce. In traditional commerce, exchange of goods and services, information and money  etc. are the activities of business. But E-commerce is a process of buying and selling of goods and services over the web or internet. 

    

How does E-commerce exactly work

 

E-commerce ( electronic commerce) is buying and selling of goods and services throughout the world with the help of internet. E-commerce has a wider range, because it is also deal with transferring funds and data, stock investment, online banking etc.

Many applications and software are used in E-commerce, which helps in dealing online. There are many steps taken for the security of transactions from stealing information etc.

In the E-commerce, consumers goes through the internet to the website for purchase something, after purchasing he moved to the online transaction server ( all the information is encrypted here). Then he placed an order, the information moves through a private gateway to a processing network. Where all the transactions ( related banking ) are done.

1) Online consumers-  online consumers are those who are purchasing something online from any website or app. These are the important part of an e-commerce activity, because without consumers no business can exists. 

2) Merchant website- it is an online platform for online business. Because this is a place where buyers are coming online for purchasing something. 

3) Internet- internet is an important part of e-commerce. Without internet, no online purchasing or selling or any other transactions take place. 

4) Online transaction server- this is a place where purchasing process is done and important information regarding customer and product is encrypted 

5) Processing network- after information is encrypted. It is send to Processing network though a private gateway. Where acquiring and issuing banks complete or deny the transaction request.  This is also a secure process. 

This process is done on the website, apps etc. Some companies like Mantra, Amazon, Flickr, eBay etc. are working as e-business.  

HISTORY OR ORIGIN OF E-COMMERCE

 History or origin of E-commerce

 This term was coined and first employed by Dr Robert Jacobson. He was principal consultant to California state assembly's utilities and commerce committee. E-commerce is about the buying and selling of goods and services on the internet. It is a modern technology that addresses the need of the organization, customers, improving quality of products and services, and provide the wider range to the business because it spread the business in the global market. It is a business, conducting online with the help of websites, apps, social media etc. It also includes online services like banking and insurance, stock exchange etc. 

 IBM was the first company who used the term internationally. In the 1972, IBM used the term called E-business. First successful transaction is held between USA and European union in 1973. 

 There have been several steps in the history or e-commerce. From it’s initial face to its development till now. Some of them are given below: -

The first step comes from the development of EDI ( electronic data interchange). EDI is the set of standards, developed in 1960 to exchange the business and do electronic transactions.

 - In 1971 or 1972, the ARPANET is used to arrange a cannabis sale between students at the Stanford Artificial Intelligence Laboratory and the Massachusetts Institute of technology.

 - 1976- Atalla Technovation ( founded by Mohamed Atalla) and Bunker Ramo corporation (founded by George Bunker and Simon Ramo) introduce products designed for secure online transaction processing, intended for financial institutions.

 - 1079- Michael Aldrich demonstrates the first online shopping system. 

- 1984- the ASCX12 Standard become stable and reliable in transferring large amount of transactions.

 - 1990- Tim Berners-Lee writes the first web browser, World Wide Web. 

 - 1992- the next major step occurs in this year, when Mosie web browser makes available. It was the first point and click browser. 

 - 1994- Ipswich IMail server becomes the first software available online for sale and immediate download.

 - 1995- the first commercial-free 24 hours, internet-only radio station. Radio HK and NetRadio start broadcasting. 

 - 2000- in February 2000, hackers attack on some major players of E-commerce including Yahoo and Amazon. These attacks show the need of improved security for the development of electronic commerce in future. 

 E-commerce is a vast platform for grow. So, it is developing day by day. It helps to conduct traditional business in new ways. It helps in transferring and processing information automatically. Information is electronically transferred from one computer to another in an automated way. It is a paperless exchange of business information using EDI, Email, EPT etc. 

The most popular area of it is Business to consumer (B2C) and others are: Business to Business ( B2B), Consumer to consumer ( C2C ), Peer to peer ( Network to Network ), M-commerce etc.

What is E-commerce

 What is E-commerce

 E-commerce is a newly advanced technology related with commerce and computer or internet. E-commerce (Electronic commerce) is buying and selling of goods and services, or transmitting of funds or data, over an electronic network ( primarily the internet) On the other hand, we can say that e-commerce is a business model that lets firms/organizations and individuals buy and sell things over internet ( online). It consists of all the business activities carried on or with the use of electronic media I.e. computer network or doing business online by using IT ( Information technology). It may be buying and selling of stocks and bonds, a tangible products, buying and selling of goods and services etc. It is the modern business Methodology that addresses the need of firms/organizations, merchants, customers to cut the cost and improving the quality of goods and services delivered.

 So, E-commerce can establish a wider range market to both buyers and sellers by providing cheaper and more efficient distribution channels for products and services. Nearly every imaginable products and services are available through e-commerce. Examples- books, music, plane/ train/ bus tickets and financial services such as stock investment and online banking. E-commerce platform such as Amazon and eBay has contributed to substantial growth of online retail. Also digital market place such as eBay or Etsy serve as exchanges where multitudes of buyers and sellers come together to conduct businesses. As per estimates, it grows nearly 23% every year.

 There is a term called e-tail which is something used in reference to the transactional process that makes up online retail shopping.

 The term E-commerce and e-business are often used interchangeable. E-commerce is the process of doing business electronically. It involves automation of variety of B2B and B2C transactions through reliable and secure connections. The use of electronic transmission media ( Tele-communication ,internet ) to engage in the exchange of business documents, also including buying and selling of products and services in physical or digital form from one location to another using computer as a component and internet as a media.

 E-commerce is a composite of technologies, processes and business strategies that foster the instant exchange of information within organization or between organizations. E-commerce strengthens relationship with buyers and attract new customers in open market on a global scale.

 So, E-commerce is an application of various communication technologies to provide the automation in exchange of business information within the organization or company and externally with the customers, suppliers and financial institutions. E-commerce is an online business, where company allowed the visitors to access its website and buy the product online. Here both physical and digital products are sold. Also services, like financial services such as stock investment and online banking etc. are provided. 

It is considered as a very disruptive technology. E-commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, internet marketing, online transaction processing, electric data interchange (EDI), inventory management system and automated data collection system. 

 There are three areas of E-commerce: 

1) Online retail 

 2) Electronic market 

 3) Online auction 

 E-commerce has a wider range market for businesses. It may include: 

- Business to Business ( B2B), buying and selling of goods and services etc. And B2B electronic data interchange.

 - Business to consumer( B2C) and consumer to consumer ( C2C) , sales done in Online marketplace. 

 - Retail sales, Online shopping by consumers via websites, mobile apps and conversational commerce etc.

 - Social media is used for gathering demographic data 

 - Launching new products and services through internet 

 - Marketing though Online platform and established new customers.

 - Online trading and also banking, stock investment and currency exchange etc.

what is the meaning of commerce and what are its elements

MEANING OF COMMERCE 

Commerce is dealing with buying and selling of products. In simple words,  Commerce is an exchange of goods and services usually in money. Commerce is a widely used all around the world. Commerce works in millions of different forms,  like when we buy something in local stores, Companies produce products for sale, some companies provide services to us etc. These all and many more examples of commerce are present in our world. Commerce has a wider range. This is existing from our daily routine to big or large scale dealing. 

ELEMENTS OF COMMERCE 

There are basically three elements in commerce, which are involved everywhere. These elements are:

1) BUYERS – These are the people, who want to purchase goods and services with the exchange of money. We consider the buyer as first elements of commerce because in the absence of buyer,  other elements are worthless. 

2) SELLERS- These are the people,  who offered goods and services to the buyer for the exchange of money.  

Sellers are also classified into two different forms:

- WHOLESALERS- Wholesalers are also known as distributors.  They worked as middle man between producers and retailers/customers. So, wholesalers sell the product to retailers and other businesses. 

- RETAILERS- Retailers are those who sell the product to the consumers. Retailers have direct contact with the consumer of the product. 

3) PRODUCERS- Producers are those who create/made the product ( from row material)  and provide services to the buyers.

These are some basic element which describe how commerce works. So, basically this is an exchange of goods and services with money. 

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