Shopping in the comfort of your home...
E-commerce is defined in chapter 8 of our book as “the buying and selling of goods and services over the internet.” Some very profitable e-commerce businesses include Amazon and EBay. E-commerce builds on traditional commerce by adding the flexibility that networks offer and the availability of the internet. You do not have to leave the comfort of your home in order to buy almost anything these days. Local grocery store Stop and Shop even offers a program called “Peapod” which is online grocery shopping and delivery. All that you need to do is log onto the peapod website, state whether you are shopping for groceries for your home or groceries for your business, create and fill your shopping cart, pay and then wait for the groceries to be delivered right to your front door. The span of E-commerce these days is unbelievable.
How does it work?
Although E-commerce has the same goal as traditional commerce, to sell products and services to the consumer to generate profit, they do it quite differently. In e-commerce, it is obvious that the internet and telecommunication play a major role. There is more often than not no physical store and the buyer and seller do not see each other. This is most typical in businesses such as Amazon and EBay. The seller puts up something of value for sale and the buyer bids or requests to buy it. The trade of money for the good is often run by the website as to avoid problems, but it is the seller’s duty to package and send the product and the buyer’s duty to make sure the product was received. However, sometimes businesses operate as a mix of traditional commerce and e-commerce; these companies are referred to as click-and-brick e-commerce. They capitalize on the advantages of online interaction with their customers yet retain the benefits of having a physical store. An example of this would be the shopping I do on JCPenney’s website. I can conveniently shop for clothes and other things online while sitting at home and if they arrive and I am not satisfied with them, rather than going through the process of mailing them back to the company I can simply enter the store and return them as if I had purchased them in-store.
The Advantages and Disadvantages
Like traditional commerce, e-commerce does have its advantages and disadvantages. Some advantages of e-commerce include:
1)Creating better relationships with suppliers, customers, and business partners
2)Being able to operate around the clock and around the globe
3)Increasing customer involvement (offering feedback)
4)Improving customer service
5)Increasing flexibility and ease of shopping
6)Increasing the number of customers
7)Increasing return on investment because inventory needs are reduced
8)Reducing administrative and transaction costs
And much more. However, e-commerce does also have its disadvantages. Such disadvantages include bandwidth capacity in certain parts of the world, security issues, accessibility (not everyone in connected to the web yet), and acceptance (not everyone accepts this technology). Although these are the current disadvantages, many believe that they will be eliminated or reduced in the near future.
