What is E-Commerce? Advantages and Disadvantages

Are you thinking to open up your own online store and starting to sell products or service through the internet? If yes, then that is mean you are thinking about E-Commerce.

The birth of E-Commerce itself can be traced back to 1960s, where businesses started to use EDI (Electronic Data Interchange) to be able to share business documents with another company. After the trend becomes more and more popular in the 1980s, eBay and Amazon started to rise in 1990s and started the revolution in the E-Commerce world.

Nowadays, you can easily purchase various kind of items online, with just a few taps on your smartphone.

E-Commerce advantages and disadvantage

E-Commerce pros:

  • Getting new customers with search engine visibility

With brick and mortar store, you will depend on relationship and branding. However, with E-Commerce, you can rely on traffic from search engine too.

  • Do not have to worry about geographical limitations

If you only have a physical store, then your marketing and service area will be limited by the geographical area. With E-Commerce, the whole world can become your playground.

  • Find the product or service faster

In an online store, you can easily find what you are looking for by simply typing the name of the product and tap the “search” icon. You do not need to push a heavy shopping cart and wandering around the aisle again.

  • Low cost

One of the main reasons why many business owners like E-Commerce is because it costs lower than the traditional physical store.

  • Compare prices and products

With E-Commerce, it is very easy to compare prices and products. There are several online stores with multiple merchants inside, where you can get a particular kind of products with various qualities and prices.

  • Save more time and cost

Sometimes, people are simply too lazy to go outside and buy what the things they want. Hot weather, heavy rain, or traffic jams often become their reasons to not step outside the home. In E-Commerce, they can visit their favorite store anytime they want, with just a few click of their mouse.

  • Able to provide detailed information

The amount of product’s information that you can show in a physical store is limited. It is also will cost you a lot to assign a staff for each aisle to help customers whenever they have something to ask or when they need help. In E-Commerce, you can add as many information as you see fit.

  • Open almost anytime

With E-Commerce, it is possible for you to open your store for 24 hours per day, every single day. For customers, this means they will have a freedom to shop anytime they want. For a merchant, they surely will get more order because of their “availability”.

E-Commerce cons:

  • Lack of personal touch

Yes, you still can sell your products well without meet your customers in person, but some retailers are simply valued human relationship greatly. Different people have different preferences. The lack of personal touch in E-Commerce may or may not become your business’s disadvantage.

  • Some products cannot be purchased online

Online shopping its quite convenient, but even with all of those wide variations of products, some items just cannot be bought online. Like easily perishable products, or a product with odd size.

  • Takes time for the ordered item to arrive at your home

When you go shopping at the supermarket, you can bring the item with you at the same day you buy it. In E-Commerce, you must wait for a several days before you really can use the product. Even with the fastest shipping option, you still have to wait for several hours.

  • Everyone can set their own online store

It is possible for anybody to set up their own online store in a mere 10 minutes. So, if anybody can do that, how you can make sure the site where you purchase things is a genuine one?

This is probably good for the merchant, but you cannot say the same for the buyer. In the end, they will buy things from a famous online store only.

  • You can not sample the item first

You can’t check whether the shoe size is fit or not. You can’t feel whether the fabric of the garment is soft or not. In many cases, customers love to “test” the products before they decide to buy it or not.

E-Commerce categories

There is more than one kind of E-Commerce:

  1. B2B, or business to business. In this kind of E-Commerce, companies will conduct a business with another company. For example, a manufacturer sells things to distributors and wholesalers, who will sell them again to the retailers.
  2. B2C, or business to consumer. This is the most common form of E-Commerce, where customers buy things from merchant or seller.
  3. C2B, or consumer to business. For example, a designer freelancer bid one company’s design project, and the company accepts the price. This is commonly found in freelancer sites like Upwork.
  4. C2C, or consumer to consumer. This kind of E-Commerce is easily found in a forum, marketplace, or on an online auction site like Craiglist and eBay.

Getting started with E-Commerce

Do you want to start your own E-Commerce business and sell some of your products? If yes, then there are a few tools that you can use.

It does not matter even if you do not have any skills in programming because some platforms like Wordpress and Woocommerce are user-friendly and free. If you prefer something more flexible and complex, then Magento can be your ideal solution.

Do not forget to install several payment options in your online store. PayPal is quite common to use. Of course, you also can sell your products in a marketplace site like Amazon. They will be the one who handles the payment and shipping system for you.

If you sell physical items, do not forget to consider how you will ship them. You also need to do a research about the law in your area, whether you will need a special permission to sell things online or not.

Dropshipping is a good choice if you do not want to bother with production and inventory. Dropship supplier will send the products on your behalf, with your packaging and brand.

This article also published on limecommerce

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