An Introduction to E-commerce: Pros and Cons

In this blog post, you will be provided with an introduction to E-commerce and the relevant advantages and disadvantages.

E-commerce can be interpreted as doing any business online or it can also describe any kind of commercial transaction that is facilitated through the internet. In other words, any transaction involving buying or selling of goods or services through the Internet is referred to as e-commerce, which is the broader concept of e-business.

Introduction to E-commerce

E-commerce, also known as electronic commerce or internet commerce, is the activity of electronically buying or selling of products on online services or over the Internet.

To present an introduction to E-commerce, it would be good to know that e-commerce first began on August 11, 1994, with the first-ever online transaction, when a man sold a CD by the band Sting to his friend through his website NetMarket, an American retail platform. Since then, e-commerce has evolved to make products easier to discover and purchase through online retailers and marketplaces.

Types of e-commerce

Business-to-consumer (B2C):  the process of selling products and services directly between consumers who are the end-users of its products or services.

Consumer-to-consumer (C2C): is the business model that facilitates commerce between private individuals.

Consumer-to-business (C2B):  is a business model where the end consumers create products and services which are consumed by businesses and organizations.

Business-to-administration (B2A): is a business model that encompasses all transactions conducted online between companies and public administration.

Consumer-to-administration (C2A): is a business model that encompasses all electronic transactions conducted between individuals and public administration.

Benefits of e-commerce

Availability

Traditional stores are supposed to open for a fixed amount of hours and may even close entirely on certain days, however, e-commerce sites are available 24×7, allowing visitors to browse and shop at any time.

Speed of access

E-commerce sites run quickly compared to traditional stores which are slowed by crowds. An e-commerce transaction can comprise a few clicks and take less than five minutes.

Wide availability

E-commerce enables brands to make a wide array of products available, which are then shipped from a warehouse after a purchase is made.

Easy accessibility

E-commerce enables users to browse product category pages and use the site search feature the find the product immediately.

International reach

E-commerce enables businesses to sell to any customer who can access the web.

Cost-effective

With the growth of e-commerce and the electronification of all transactions, all companies and stores have to lower their prices to compete. In fact, by following the lower profit, more sales approach, this gives the user or customer the opportunity to buy their desired product at a fair and affordable price comparing to that of traditional stores.

Coupons and discounts

In e-commerce, customers input coupon codes during checkout to receive a certain discount. Sharing discount coupons and promotional codes have become a key strategy for e-commerce.

Disadvantages of e-commerce

Not being able to touch or see

The product you buy may be damaged or incomplete and it will be costly for you to ship items back to the seller. Some consumers value the personal touch they get from visiting a physical store and interacting with sales associates.

Wait time

Late delivery is one of the common disadvantages of e-commerce platforms. While ordering a product the customer is assured that it will reach him in a maximum of seven days or a particular time period. In most cases that does not happen and you are kept waiting for it.

Security

This is the biggest drawback of e-commerce is the issue of security. People fear to provide personal and financial information, even though several improvements have been made in relation to data encryption.

Price And Product Comparison

With online shopping, consumers can compare many products and find the lowest price. This forces many merchants to compete on price and reduce their profit margin.

Need For Internet Access

For online transactions, the internet is a must! Since many eCommerce platforms require high-speed Internet access for optimal customer experience, there’s a chance you’re excluding visitors who have slow connections.