E-commerce is known as internet commerce or electronic commerce that allows buying and selling products online over the internet. The term e-commerce got introduced by Dr. Robert Jacobson, Principal Consultant of USAUC.

Advantages and Disadvantages of E-Commerce
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Electronic commerce relates to technologies and can get done through mobile banking, supply chain management, online payment transfer, online transaction processing, electronic data interchange, etc.

Pros and Cons of E-commerce

E-commerce also refers to the kind of commercial transactions facilitated through internet services. E-commerce is slightly different from E-business. E-commerce only deals with buying and selling goods via the internet, whereas E-business incorporates all the types of businesses conducted online. E-commerce is known as the subset of E-business.

When the first-ever online sale happened on August 11, 1994, a man sold CD through “Net Market.”

Since the evolution of E-commerce, it has made our lives easier and convenient to buy and sell tangible products via the internet. According to the fact, the global retail e-commerce sales got projected to reach $27 trillion by 2020.

Advantages of e-commerce

Now, let’s delve more into how e-commerce has made our lives feasible.

1. Faster Buying and Convenient

E-commerce allows customers to spend less time buying the products they want. They can browse through a large variety of items at a time which will help them in time-saving. People don’t have to go to the store to buy the things they want if they start using e-commerce facilities.

No matter where the consumers live, whether in the countryside or urban area, if they have access to the internet, then they can easily purchase items through e-commerce. Both the retailers and customers can get benefitted out of it.

2.  Reduction in Cost

One of the crucial advantages of e-commerce for the seller is cost reduction or low-cost outlays. Most retailers or sellers have to pay a generous amount of money to maintain their physical store. They have their rent cost which, is always likely to get appreciated. Instead of paying out higher rental, costs sellers can list their products on an e-commerce website. Most of the startup businesses get benefitted out of it.

They also don’t need to pay extra upfront costs like designing, repairs, inventories or godown, etc. Selling products online can lower down the cost and increases ROI, and sellers can also receive desired profits. Also, an e-commerce store is reasonable and way cheaper than a physical store. According to the facts, almost 33% of consumers use their phones to shop for items.”

3. Easy Price Comparison

When prices of all the goods get listed on the e-commerce website, it will be easier for the customers to compare the prices among the different products and make their buying decision accordingly. When customers feel like they have bought goods at reasonable prices, they will have satisfaction.

Also, sellers can compare the products of their competitors listed on an e-commerce site and have pricing according to the competitive market. It won’t be time-consuming as well. Also, with faster delivery, quick price comparisons, and the comfort of shopping from home, customers can save time.

4. Affordable Marketing

Most startup businesses will face high initial investments when they need to introduce their product to the market. Traditional advertising and marketing may prompt to incur a large amount of money to the businesses. Today, with the help of the internet and e-commerce sites, sellers can experience affordable advertising by keeping their products online to various online websites, pages and increase their awareness among customers.

The process is also known as digital marketing. The world of e-commerce provides quick customer responses towards your products as well. Sellers can post ads on their e-commerce website and highlight their products to the consumers. Also, with the help of digital advertisement sellers, can attract their customers from every part of the world where there is an internet facility. It is comparatively cheaper and flexible as well.

5. Informed Decision Making

When customers start surfing the e-commerce website, they will get flooded with lots of information regarding the products that can influence their decision-making towards buying the product. Information about the product, reviews from other customers, usage videos, social validation, product guides can change customers’ decisions. It can be time-saving. Also, customers will not get dissatisfied after knowing about the reviews of the products.

6. Wider Customer Base

As mentioned above, e-commerce allows customers from different parts of the world to purchase products. It provides global brand awareness of the products worldwide. It can create a broader range of customer base, and the geographical boundaries become inconsequential.

Sellers won’t get limited to the shoppers of physical location. Customers can read the products through different online platforms like e-commerce sites, social media, pages, ads, and that’s where there will be a broad customer base.

These are some beneficial advantages of e-commerce.

No matter how many advantages e-commerce possesses, it also has its demerits.

Disadvantages of e-commerce

1. Security Issues

One of the crucial drawbacks of e-commerce is security issues, risk, trust issues of the customers towards the internet. People still get scared to provide their financial and personal information on e-commerce sites or the internet. Some websites fail to have authentic transactions.

Trust issues are one of the factors that limit the growth of e-commerce businesses.

However, with the evolution of e-commerce sites, there have lots of changes made for the safety and privacy of customers.

2. Higher Transaction Costs

High transaction costs and tax issues can be another factor that facilitates the disadvantages of e-commerce. Customer purchasing the product online or from e-commerce sites, they need to pay further transaction costs, delivery fees, and bank transaction fees. It can be expensive compared to buying products from the store itself. Also, in most cases, there might be tax issues when buyers and sellers are from different states.

3. Product Suitability

When buying from e-commerce sites, customers need to rely on electronic pictures. If there are no reviews or further information, then the customer may fear purchasing the product. Sometimes, the customer may also face bad experiences like the product may not match the electronic pictures. Lack of touch and feel may limit customers buying from the internet.

(Last Updated On: June 6, 2021)