Merits and Demerits of Ecommerce

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Published: 04th May 2011
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Electronic commerce remains one of the more important uses of the internet in recent times. The digital transactions have clearly turned around how business operates nowadays and have changed how customers and businesses interact. However, there are advantages as well as disadvantages of this form of carrying out business.

One advantage of ecommerce is that it allows people to transact regardless of time and distance. The only requirement is access to and knowledge about the internet. It enables the business establishment to access the global market as through the website, local, regional and international clients are catered for effectively. This means that the business is not restricted by physical boundaries. This translates to more sales.

The cost of sale of a product offered on the internet is often lower than the traditional forms of transactions since human interaction is minimal. It also offers the customer to quickly search for cheaper products/services, compare similar products or even access the product from the original manufacturer, all at the click of a mouse. The reviews also assist in purchasing decisions. It is also more effective as processing errors are eliminated. This convenience and ease of use translates to the customer saving money and making better purchasing decisions on the products on offer.

Electronic commerce offers cheaper marketing options to the businesses. Various business features such as customer care, transaction processing, information storage and stock management are faster and much more effective than when using traditional forms of marketing. Inclusion of all the business facets in one website also reduces on business infrastructure and personnel this reducing on a business running expenses. Through collection of customer information, a business is able to customize the products and services they offer to be more specific to the customers’ needs. Using this information, the business is able to adopt more suited marketing strategies.

One demerit of shopping cart business is the limited technological know how. Most regions, especially the third world countries, still suffer from low internet penetration and knowledge which in turn limits their access to online businesses. Even amongst the knowledgeable populace, there is apathy and suspicion on the authenticity of the products sold online. Many people are highly cautious when it comes to divulging personal and financial information on the internet largely due to escalating internet fraud and credit card scams.

The merits of electronic commerce far outweigh the demerits. A good set up should effectively meets the customers’ needs, is easy to use and most of all secure. The customer on the other hand needs to be keen on the reputation of the product supplier, nature and security of the payment method and customer care provision.

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