E‐Commerce | Advantages and disadvantages of E‐Commerce

What is E‐Commerce? What are the advantages and disadvantages of E‐Commerce?

Answer: E‐Commerce | Advantages and disadvantages of E‐Commerce

E‐commerce :

E‐commerce stands for electronic commerce. It is also known as e‐trade or e‐business.  E‐commerce is the term used to describe the selling of goods and services over the Internet. This saves time for users on both ends. The users can buy, sell, and exchange products or services via computer network. Usually the payments are made using credit cards.

Role of e‐commerce in networking : The main services provided by e‐commerce are as follows :

1. E‐mail : E‐mail is the most popular service through which we can electronically send and receive
messages anywhere in the world.
2. Video conferencing : Video conferencing is a meeting between two or more people located at different places. It is conducted through computer network. It provides an environment of normal meeting. It enables participants to see and hear each other at the same time as if they are in the same room.
3. Electronic shopping (E‐shopping) : The shopping conducted through internet is known as electronic shopping or e‐shopping. Many business organizations have their websites on the internet. These  websites are used to sell goods and services. Customers place their orders through websites and make payments using credit cards.
4. Electronic banking : A service that allows an account holder to obtain account information and manage certain banking transactions through computer network is called electronic banking or e‐banking. An electronic banking is also known as online banking or cyber‐banking.


Advantages of e‐commerce :

1. Low cost : The entire financial sector will eventually become electronic, so a sooner conversion is going to be lower on cost; thus, also lowering operational costs as no physical needs to be set up. It makes every transaction through e‐commerce payment a lot cheaper.
2. Higher profit margin, better productivity : E‐commerce also enables us to move better with higher margin for more business safety. Higher margin also means business with more control as well as flexibility. One can also save time from the e‐commerce as it is all time available. Productivity here means productivity for both companies and customers.
3. Effectiveness : Customers can easily select products from different providers without moving
around physically.
4. Instant comparison : E‐commerce also enables to compare price among several providers. In the
end, it leads us to smart shopping. People can save more money while they shop.
5. Economy benefit : E‐commerce allows us to make transaction without any needs on stores,
infrastructure investment, and other common things we find. Companies only need well built
website and customer service. Thus it is easy to start and manage a business.

Disadvantages of e‐commerce :

1. Security : Customers need to be confident and trust the provider of payment method. Sometimes,
we can be tricked. Examine on integrity and reputation of the web stores before you decide to

2. Scalability of system : A company definitely needs a well developed website to support numbers of customers at a time. If the web destination is not well enough it is better not to use it.

3. Integrity on data and system : Customers need secure access all the time. In addition to it, protection to data is also essential. Unless the transaction can provide it, we should refuse for e‐ commerce. Such sites are soft targets for hackers.

4. The “touch and feel” people : People who prefer and focus on product will not buy online. They will want to feel, try, and sit on their new couch and bed. They believe there is no guarantee of product quality online.

5. Customer service and relation problem : They sometimes forget how essential to build loyal relationship with customers. Without loyalty from customers, they will not survive the business. As there is minimum chance of direct customer to company interactions, customer loyalty is always on a check.

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