Advantages of e-commerce

1. E-commerce is trading that is done over the internet. It has grown lots in the last 20 years and is only getting bigger. Many businesses use it also to give out information about themselves Examples of e-markets • Financial services (bank, share trading) • Utility services (paying bills) • Government registration (cars, houses) • Retailing from food to DVDs • Business 2 business e-commerce is huge because it is the easiest and cheapest way to market. • Business to consumer needs more attention paid to the customer. Because they will need more convincing. • Name two ways you have used e-commerce_________

2. Advantages of e-commerce • Businesses have a whole new distribution channel. They can sell directly on line or help customers to get information about their products and then buy them in a store. • Can change what your business is doing quickly • Information can be passed to consumers on line rather than through a written manual. (saves money and the environment) • Businesses can save a lot of money by having less stores which reduces their overhead(expenses) • Also news organizations can sell online subscriptions and the cost to them is the same for one as it is for one million. • Gives customers a lot of choice so barriers to entry can be reduced. • Customers can finish their transactions very quickly. This also cuts down on wasted travel time.

3. Disadvantages of e-commerce • Costs – setting up (good) websites can be extremely expensive. Payment methods (finance charges) can be costly to set up and the packaging/postage may raise the price of the product. • Fraudulent trade – many people and businesses can loose money because of fraud • Spam- pop up adds and email forward scams are annoying and illegal. • For some businesses commerce is not practical. Some people will use the internet for information but will want to go to a store to make the picture. Also some things people want to buy at a store (fruits/ vegetables) • To much information people become confused and frustrated. • Some countries do not have the technology to use commerce • Maintenance and upgrades for websites can become costly • Can have job losses for people.

4. Marketing mix and E-commerce • The biggest advantage of the internet is that customers have price transparency • Reduce wholesalers and retailers who will charge for their services and are sometimes inconvenient for customers. • Businesses that use the internet can sometimes bypass international regulations. • Things like apple’s iTunes have made it so that people do not have to do illegal downloading on the internet. • Small businesses now have the threat of much more competition • Consumers will usually still respond to the best price for the money.

5. Because of the growth of e-commerce less people buy things at stores but this has been a great opportunity for shippers. • Because of websites businesses can now try to sell to customers in many different languages. • Even though most people will want to buy things like a car in person they will use the internet in order to find out where they should go and what they are looking for. • An added feature is that people can see all the products offered at once when they search online. • Because of online features like make your own computer more and more businesses can offer a larger product line because they can make what the customer wants. This has the added benefit of extra market research. • Packaging is less and issue with online products which can mean lower costs and higher profit margins. • Finally more information can be given online than could be known by a sales rep.

6. Promotion on line is about information. Many businesses will have a FAQ section to help users. • It is important to make websites friendly to everyone in the world. • Viral marketing is web marketing through pop up adds and mass emails. It is annoying to some people but it is a fast and cheap why to get the word out. • Some websites will offer learning guides or games to promote their web sites.

7. E- commerce and business strategy • For many businesses having an online presence is essential. (those that don’t seem ridiculous) • Many websites have come around that will rate different products which is beneficial to the customers and to ethical businesses • One problem businesses can have because of the internet is that they have to deal with things like fluctuating interest rates and other external factors like legal issues. • Some people are scared to use the internet for purchases because identity theft has become a huge problem. • Businesses need to be careful not to give to much information on their homepage because people have very short attention spans.

8. Businesses will judge their effectiveness of their e- strategies by • If there is an increase in sales • Increase in market share • More “brand exposure” • Some businesses look at the click per page method • Also businesses will try to have a good website ranking • The internet offers a huge opportunity to most businesses and experts feel that most businesses have not started to reach their full potential.