In a simple way of explanation E-commerce relates to the word commerce just like Email is related to mail. If commerce means the transaction between physical buying and selling decision, so it makes e-commerce its electronic counterpart. Which e-commerce refers to the buying and selling of goods and services using the internet.
Advantages and Disadvantages of Ecommerce
As we know e-commerce runs their business online. e-commerce is always available at any time 24/7 like no other physical retails stall that has a certain operating hour such as 9am-9p.m., It turns out to be an advantage when E-commerce is available at all hours, we will be able to attract customers who would normally buy products from the stall, IF they are open but if there are not e-commerce will likely to be their second choice. Moreover, for people who are busy and doesn’t have time to shop in-person, they can just go online anytime at anywhere and purchase something. This shows how potential e-commerce are being available always which also means income is readily increase anytime when people bought something.
2)Sell Your Product Internationally
E-commerce brings your product to a larger market. Not like physical retail stores, u can reach to a large market, physical store has a market which is just within a certain area. For example, if you open a store in Penang, you are not going to expect someone from Kuala Lumpur, Singapore or somewhere else to come all the way to buy your product unless your product is so significant until their want it so badly. But e-commerce brings your product to the world. Let’s take Alibaba as an example, DO YOU think they can earn 25 billion in a day just by the sales of their local people themselves? No, they make their sales all round the world. In addition, with the technology now a day you can track down or identify who your audience are and where are they from. Moreover, when u see the word international normally something will come into your mind which is the shipping of the product. So, based on this factor, if you choose to dropship, your manufactural will normally offer you a cheaper or even free shipping fee. This allows you to price and ship your product more competitively.
3)Financial Cost – LOW
E-commerce has a very low start-up cost compared to physical retail stores. Physical retail store must prepare a huge amount of modal to start the business as they need to pay for stuff like rentals and several upfront costs such as the sales equipment, buying inventory, electric bills and many more.
Moreover, a physical retail store also must hire a someone to work and run the business during the business hour. But for E-commerce business usually we don’t really need to hire employee as we don’t need people to always be on the keyboard waiting for orders. If the business grows to a certain level which an individual can’t control, then you can consider hiring someone in helping you to process the orders. In addition, if the business grew bigger e-commerce doesn’t need to buy their inventory in large quantity if they choose to dropship. Dropship is a method where you send your product directly from the manufacturer to your customer. This helps in saving their inventory cost. But for physical retail store when their business grew they have to expand their inventory space this means they have an increase in their expenses. E-commerce is clearly to have a lower financial cost. This is the most attractive e-commerce benefits for new entrepreneurs who wants to keep their cost low.
4)Easier to obtain Impulse Buy
Getting customers to become impulse buyer. If we use an attractive photo of the product, something with vibrant colour or human emotion, we can use the photos for advertising purposes to drive impulse buys. We can also use certain tactic such as countdown timer or showcasing limited quantities of a certain product to gain impulse buyers.
5)E-commerce and environment
This is one of the most significant benefits that we can achieve from E-commerce. As we people now are moving on to a societal marketing strategy which involve not only in profit or satisfying customer’s needs and wants, we are focusing on an overall welfare especially the environment. Since everything is done online, people doesnot need to travel much anymore to buy something. In this case, less traffic is use and less traffic logically leads to less air pollution.
1)No One Can Buy During a Site Crash
The drawback about e-commerce is that if your website crashes, it can cause customers can’t buy anything from your store. So it’s important to make sure your website is hosted on the right platform. For example, if it happens to have a server provider error or massive traffic spike which leads to a website crash, customers are not able to go on to our sit for purchasing. And fortunately, Shopify offers a free monthly hosting service that gives you the chance to own the best serves on the market. In recent memory, the sites was down only once. Actually, not just e-commerce stores affected. Such like, Twitter, Spotify, Sound cloud and more. They are also affected by the crash. However, the whole issue was resolved. There’s a problem with Shopify site is very rare. So that, There won’t be any problems for your business.
2)Customers Can’t Try Before They Buy
Although this is a problem for retailers, but it won’t be a long-term problem. Augmented reality, more stores are beginning to add AR elements to their stores. So that, can let customers to try those products. For example, Holition and Augmented. They are the companies that augmented reality for their companies. They provide a solution to this problem, let customers have more experience and interaction with products.
3)Customers can be Impatient
Sometimes buying online can meet many problems such as, payment error, does not received the goods after 2 weeks, received the wrong goods, goods are broken when you received it. In this case, you have to contact with the customer service of the online shop. Unfortunately, many customer services of the online shop don’t reply the problems of the customers instantly, it many causes them to become impatient and do not trust the online shopping service anymore. To do an E-commerce, you have to be online 24 hours every day so that the customers can contact you when they meet some emergency cases and you need to hire customer service representative to let customer feels happy and satisfied, it will increase the cost of goods and the price of the goods sold.
4)You need to ship your product
Without visiting a shop lot, customer can buy things through online, but it is very inconvenient as you have to brings your product to the carrier services center to ship your products to customer. It may let the customers wait for a long time to receive their goods. The order tracking systems always not accurate. Besides that, it may increase the cost of the products because the customer has to pay to the shipping fees and it will expensive than buying from the shop.
5)Ecommerce is Highly Competitive
If you find the right niche, then this is a disadvantage for ecommerce. For example, reality is the best niche because it is most competitive, this is why most people are attracted to them. If the competition in the niche market is more intense, it will make the niche market more expensive. Fortunately, we have several ways to solve this problem. First of all, we can try to track audiences that are different from your competitors. If most of your customers get information about your competitors through Facebook ads, in this case you can try to use SEO optimization for organic rankings. On the other hand, when most of your competitors start using Pinterest, you can try to use Instagram marketing. As far as I know, Instagram is also a very intuitive platform. If you think that the price of the ad is very expensive, I suggest you can send the traffic to the blog post, then you will relocate lower cost ads.