E-commerce is the buying and selling of good or services via the internet, and the transfer of money and data to complete the sales. It’s also known as electronic commerce or internet commerce.
Today, questions about e-commerce usually center around which channels are best to execute business online, but one of the most burning questions is the appropriate spelling of e-commerce. The truth is, there isn’t any one that’s right or wrong, and it usually comes down to preference.
Advantages of e-commerce
There are many obvious and not-so-obvious pros to doing business online. Understanding exactly what they are can help you leverage them to your advantage:
1. A Larger Market
e-commerce allows you to reach customers all over the country and around the world. Your customers can make a purchase anywhere and anytime, especially more people are getting used to shopping on their mobile devices.
2. Customer Insights Through Tracking And Analytics
Whether you’re sending visitors to your e-commerce website through SEO, PPC ads or a good old postcard, there is a way to track your traffic and customers’ entire user journey to get insights into keywords, user experience, marketing message, pricing strategy, and more.
3. Fast Response To Consumer Trends And Market Demand
The streamlined logistics, especially for merchants who do “drop ship,” allow businesses to respond to market and e-commerce trends and consumer demands in a nimble manner. Merchants can also create promotions and deals on the fly to attract customers and generate more sales.
4. Lower Cost
With the advance in e-commerce platform technologies, it has become very easy and affordable to set up and maintain an e-commerce store with a low overhead. Merchants no longer have to spend a large budget on TV ads or billboard, nor worry about the expense for personnel and real estate.
Disadvantages of e-commerce
Running an eCommerce business is not all rainbows and unicorns. There are challenges unique to this business model -- knowing them will help you navigate the choppy waters and avoid common pitfalls:
1. Lack Of Personal Touch
Some consumers value the personal touch they get from visiting a physical store and interacting with sales associates. Such personal touch is particularly important for businesses selling high-end products as customers not only want to buy the merchandise but also have a great experience during the process.
2. Lack Of Tactile Experience
No matter how well a video is made, consumers still can't touch and feel a product. Not to mention, it's not an easy feat to deliver a brand experience, which could often include the sense of touch, smell, taste, and sound, through the two-dimensionality of a screen.
3. Price And Product Comparison
With online shopping, consumers can compare many products and find the lowest price. This forces many merchants to compete on price and reduce their profit margin.
4. Need For Internet Access
This is pretty obvious, but don't forget that your customers do need Internet access before they can purchase from you! Since many eCommerce platforms have features and functionalities that require high-speed Internet access for an optimal customer experience, there's a chance you're excluding visitors who have slow connections.