Notes and Study Materials

Advantages of E-Commerce:



Electronic commerce, better known as E-commerce, refers to the commercial activities—such as on-line shopping and payment transactions—carried out using computers and the Internet.


Advantages and disadvantages of E-Commerce:


E-commerce covers the global information economy, which includes electronic trading goods and services, electronic fund transfer, online procurement, direct marketing and electronic Billing. E-commerce provides the procedures or the ways for generating profits by increasing the number of transactions. Some of the main advantages of E-commerce are as follows:

Increased access:


E-commerce has made it easier for businesses to reach people around the world and run their operation without approaching their suppliers directly. E-commerce businesses provide access to the consumers and the other businesses all over the world


Reduces competitive gap:

E-commerce reduces marketing and advertising expenses. So, smaller companies can also compete on quality, price and availability of goods with the bigger companies.



Reduced sale cycle:

The customers access the product listing and the pricing directly from the Internet without any phone calls and e-mails.


Reduced cost of business:

E-commerce reduces the effort required to do business. It reduces the amount of manpower required, inventory costs, purchasing costs and order processing costs associated with faxing, phone calls and data entry.


Easy business administration:

With the use of efficient software, most of the business-related tasks can be done automatically. Business processes like storing of inventory levels, shipping and receiving logs and other business administration processes are automatically stored.


Better payment system:

With the advancement in payment technologies, E-commerce allows encrypted and secure payment facilities on-line.


Reduced burden on staff:

E-commerce simplifies the customer service and sales support tasks , thus relieving the staff from one of their job responsibilities.


Medium to grow business:

E-commerce serves as a medium for start-up, small- and medium-sized companies to reach the global market.


Network production:

E-commerce allows parceling of the production process to the contractors who are geographically separated but are connected through the Internet. This helps in selling of add-on products, services and new systems.




E-commerce has helped customers to find the required product in an easy way. But, there are some difficulties that exist in the use of E-commerce. Some of the most common difficulties are as follows:


1. It is difficult to decide the criteria on which taxes should be charged on the selling of goods over the Internet in case the business and the customer are in different states. It would be unfair to collect taxes from businesses whose products are not marketed over the Internet and to allow businesses selling their products over the Internet not to pay any tax

2. The issue of security is another major area of concern on E-Commerce. The security issues concerning personal and financial information about a customer still exists even with the improvement of data encryption techniques.

 3. The cost that is involved in the development and deployment of the E-commerce application is very high.

 4. Some protocols are required to develop some specific E-commerce applications that are not standardized around the world. The deployment of such applications over the Internet required that these protocols should be available on the client side.

 5. The integration of E-commerce infrastructure with the present organizational Information technology system is difficult. The technologies used in the development of an E-commerce application in an organization may be different from that of the presently existing application used in -the organization.



6. There are no common rules and regulations agreed to by all the parties involved in the development and usage of Web resources and applications.

7. On the business side, higher employee training is required for proper management of the process involved in the transactions.

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