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Disadvantages of E-Commerce


The disadvantages of e-commerce can be divided into two categories:
  1. Technical Limitations 
    • Lack of Security: There is a lack of system security, reliability, standards, and some communication protocols. 
    • Low Bandwidth: There is insufficient telecommunication bandwidth. 
    • Needed More Applications Tools: It is difficult to integrate the Internet and electronic commerce software with some existing applications and databases. Vendors may need special web servers and other infrastructures, in addition to the network servers. 
    • Incompatibility: Some electronic commerce software might not fit with some hardware, or may be incompatible with some operating systems or other components.
  2. Non-Technical Limitations 
    • Cost and Justification: The cost of developing electronic commerce in- house can be very high, and mistakes due to lack of experience may result in delays. There are many opportunities for outsourcing, but where and how to do it is not a simple issue. Furthermore, to justify the system one must deal with some intangible benefits (such as improved customer services and the value of advertisement), which are difficult to quantify. 
    • Security and Privacy: These issues are especially important in the B2C area, especially security issues that are perceived to be more serious than they really are when appropriate encryption is used. Privacy measures are constantly improved. Yet, the customers perceive these issues as very important, and, the electronic commerce industry has a very long and difficult task of convincing customers that online transactions and privacy are, in fact, very secure. 
    • Lack of Trust and User Resistance: Customers do not trust an unknown faceless seller (sometimes they do not trust even known ones), paperless transactions, and electronic money. So switching from physical to virtual stores may be difficult.
    • Other Limiting Factors: Lack of touch and feel online. Some customers like to touch items such as clothes and like to know exactly what they are buying. 
    • Customers Relations Problems: An e-business cannot survive over the long term without loyal customers. 
    • Corporate Vulnerability: The availability of product information, database catalogs and other about a business through its web site makes it vulnerable to access by the competition. The idea of extracting business intelligence from the competitor's web pages is called Web farming. 
    • Legal Issues: Legal problems encountered in the e-commerce environment include:
      • a) Software and Copyright Infringements 
      • b) Credit Card Fraud and Stolen Identities 
      • c) Business Fraud
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