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Advantages of E-commerce


The advantages of e-commerce can be enumerated in following categories:
  1. Advantages to Customers
    • Reduced Prices: Cost of products are reduced since stages along the value chain are decreased. For example, intermediaries can be eliminated by the company directly selling to the consumer instead of distributing through a retail store.
    • Global Marketplace: Consumers can shop anywhere in the world. Currently, according to the World Trade Organisation (WTO), there are no custom duties put on products bought and trade globally electronically. This also provides wide selection of products and services to consumers.
    • 24-Hour Access: Online businesses never sleep as opposed to brick and mortar businesses. E commerce allows people to carry out businesses without the barriers of time or distance. One can log on to the internet at any point of time, be it day or night and purchase or sell anything one desire at a single click of the mouse.
    • More Choices: Electronic Commerce provides consumers with more choices. For example, before making any purchase, customer can study about all the major brands and features of any item. It also provides consumers with less expensive products and services by allowing them to shop in many places and conduct quick comparisons.
    • Quicker Delivery: e commerce allows quick delivery of products and services (in some cases) especially with digitised products.
    • Information: Consumer can receive relevant and detailed information in seconds, rather than in days or weeks.
  2. Advantages to Businesses
    • Increased Potential Market Share: The internet enables businesses to have access to international markets thereby increasing their market share. Companies can also achieve greater economies of scale.
    • Low-Cost Advertising: Advertising on the internet costs less than advertising on print or television depending on details and extent of the advertisement. A company can still spend a lot on advertising on the internet if the company hires and external party to create their advertisements but advertising on the internet itself is less costly since there is less cost associated with it in terms of printing and limited television spots.
    • Low Barriers to Entries: Anyone can start up a company on the internet. Start-up costs are lower for companies since there is less need of money for capital.
    • Strategic Benefit: The strategic benefit of making a business 'E-Commerce enabled' is that it helps reduce the delivery time, labour cost and the cost incurred in the following areas:
      • Document preparation
      • Error detection and correction
      • Reconciliation
      • Mail preparation
      • Telephone calling
      • Data entry
      • Overtime
      • Supervision expenses
    • Global Reach: Business organisations are able to send message worldwide, explore new market and reached globally at lower cost. E-Commerce helps to attract customers and business clients from anywhere in the world due to global reach.
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