08Jun 2023

The Advantages And Disadvantages of E-commerce

Currently, the web has taken over all the traditional forms of shopping. So if you are planning a business, then think of the web as the best place to start. E-commerce businesses have taken a toll on all the existing forms of businesses. By the year 2020, e-commerce sales might grow to nothing less than $4 trillion across the globe. But before you plan to set up a store online, it is imperative to check whether you actually need one. In this article, we will focus on the criterions that determine whether your business is eligible for an online presence.

E-commerce is preferred by businesses for the wide range of advantages that it offers. Again, in this article, we will shed light on the advantages and disadvantages of e-commerce businesses. These insights will help you to further ensure that you are moving on the right path.

Firstly, let us find out more About E-commerce:

What Exactly is E-commerce?

Let us think of e-commerce in terms of e-mail. So the same way as email became a replacement for mail, e-commerce is slowly being replaced by its web counterpart – e-commerce. The traditional process was modified using electronic improvisation integrating it with sophistication to make it in line with the modern lifestyle. The electronic transaction handling online sale and purchase of goods is a far advanced enhancement of the traditional commerce.

The scope of e-commerce is expanding rapidly. E-commerce has been growing at an unbelievable pace. Thanks to the convenience and ease that it provides to people for selling and buying. With the improvisation of technology and hand-held devices, life has evolved for the better. We are at a stage where the ease of shopping at our fingertips has been tearing us apart from the traditional business paradigm.

The technology, IT, the internet and all other supporting aspects of the web are collaborating to make the online sale and purchase easier and simpler. Our teams of web design and development experts are integrating innovation with technology at each step to ensure that the end users experience a seamless flow through the so-called e-commerce process.

E-commerce Websites

Currently, every Tom, Dick, and Harry has an e-commerce website – thanks to the simplified processes offered by frameworks such as WordPress to create an e-commerce site. Anyone who has basic web-related knowledge can easily set up an e-commerce site. But it is imperative to examine whether a business actually needs an online presence. Indeed, many businesses can survive and perform well without an online store. So, instituting a primary research will give you insights into the pros and cons of setting up an e-commerce site for your business.

Advantages of E-commerce

Advantages of e-commerce

Improvised systems when compared with physical stores:

People worldwide are connected to the internet. Starting from looking up information to make-up ideas and organizing surprise birthday parties for friends, the internet has become an integral part of our lives. This means that people would love to shop with technology at their fingertips, which paves the way to our discussion on the advantages of e-commerce.

Let us examine how it differs from the physical stores.

Connecting Far and Wide

Unlike the physical stores were waiting for hours in long queues is a norm, e-commerce gives people the ease of access to any store located across any part of the globe at any point of time with absolutely no waiting time involved. This takes your business far and wide, cutting off all geographical barriers, connecting you to people around the world and exploring a vast number of business opportunities in a wider market. But in order to accomplish this, it is important to ensure that your e-commerce site is in line with the SEO strategies indicated by search engines. Ultimately, this will drive not only organic traffic but also your target consumers to your site.

Eliminating Costs

With physical stores, investment is required – which might be in the form of rent or for maintenance, etc. Your store is open 24/7 when it is online unless you decide to wind up your business. This again makes it possible for people across all geographic locations to shop as and when required with no restrictions on time; as with the physical store, they have to wait until the shop is open and the shopping is restricted to locals – expanding the store beyond various geographic locations (in the case of a physical store) stays a dream forever.

There again we are cutting off manual or labor costs as you do not need salespeople pitching the products to customers.

Digital Goods Shopping

Digital Goods Shopping

When it comes to digital goods, consumers can easily access their favorite videos, albums or books. Also, the store can hold any number of copies.

Inventory Storage Space

As we have already discussed, the store can accommodate any number of items – unlike the physical store, where you have inventory storage space limitations. There might be minor challenges, such as logistics, as people from all over the world start reaching out. But this can be dealt with by choosing the right kind of third-party service providers for logistics.

You can always keep your consumers updated regarding what your business is up to. In fact, the contact information that is acquired in the form of email – it becomes easier to send automatic customized emails. The metrics used by these e-commerce stores make it easy to customize the store, integrating cookies and other techniques that will help in monitoring the behavior of your users.

Ease of Procurement

Ease of Procurement

Procurement is now hassle-free, transparent, cheaper and faster as B2B e-commerce systems are being enhanced. The risk of handling cash or currency is eliminated with no accounting errors.

You can now sell low-volume goods and also track logistics, which will finally help in the growth of your e-commerce business. Unlike the traditional retail that majorly revolves around just the fast-moving goods, e-commerce can accommodate even out-of-date products.

Disadvantages of E-commerce:

Physical Retail is more Popular. Is it?

The bitter truth is that despite the growing popularity of e-commerce, physical retail still owns the major market share. According to sources close to us, a few years back, the retail industry held more than $22 trillion of the market share, when compared with the e-commerce industry, which was only $1.3 trillion. Of course, for any business, having an online store is important, but the money earned by a physical store is higher than that earned by any e-commerce store.

What Happens During a Site Crash?

No sales will happen if your site crashes. Unless your website is hosted on the right platform, your site will crash. Sometimes, in certain situations, wherein the hosting fee is low and you experience a surge in traffic through a high-converting ad, there are risks of a site crash.

How Can You Survive When there are Others Competing?

Sometimes, people fail to choose the right niche for their e-commerce business. And with the best niches, competition is high and people choose only the best. So for a competitive niche, costs are higher as a considerable investment is needed for ads.

How Efficient is Shipping?

How Efficient is Shipping

Shipping times are the worst challenges that e-commerce stores happen to face. When it comes to a physical store, the buyer can straightaway carry the product home. But, with e-commerce, there is a waiting time involved until they get the product shipped. Certain online stores provide shipping within a day but remember there are still e-commerce businesses that haven’t developed that far. Until you find a way to ship your orders the same day, it is always great if you can communicate to your customer as to when exactly their products will reach them.

Can your Customers try the Item Before Purchase?

By now, some of the online stores have found a permanent solution to this concern. But others are yet to find. Augmented reality is now making it easier to add AR elements to their store, which will provide provision for customers to try products. So now moving forward, it will not become a challenge. Customers can easily try their favorite products and then choose which fits their requirement the best. But this will have to wait till every e-commerce business integrates augmented reality into their store.

Summarizing the advantages and disadvantages of e-commerce:

Advantages of E-commerce:

  • Customers can easily locate products
  • Fastest mode of selling and buying
  • 24/7 buying and selling
  • The physical store is not needed
  • Starting, managing a business is easy and simple
  • A one store setup for all the customers’ business needs
  • Customers around the world can be reached with no geographical barrier restrictions

Disadvantages of E-commerce:

  • Setting up a site is easy – but, how it operates and the kind of experience it offers to the customers should be taken into account as some sites are not user-friendly.
  • Product quality is not guaranteed
  • No site is free from an online attack as there are many online predators lurking around looking for an opportunity to hack the payment processors and others
  • Unpredictable effects are always a by-product of mechanical or technical failures
  • What if the site or app is not available offline? Again, you lose a lot of customers

These are some of the advantages and disadvantages of e-commerce businesses. Based on your requirements, customers, their location and other demographics, and combining these factors, you can decide whether you need to set up an online store or not.

Acodez IT Solutions is a web design company India offering all kinds of web design and development solutions. We are also an SEO agency offering inbound marketing solutions. For further information, please contact us today.

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Rajeesh PK

Rajeesh PK

Rajeesh P.K. is the Director and Creative Head at Acodez . With an experience of 10+ years in UX Design & User Interface Design, when coupled with his expert coding skills in HTML5, CSS3 and Javascript, makes him one of the top UX Architects in India, with more than 15 international awards to his credit.

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