M.com Part 1 (Semester 2)
E- COMMERCE
Most Important Question Bank for Current Exam
Q.4. Explain the
benefits of e-commerce.
ANS:
A) Benefits to
E-Commerce Firms
1. Global Reach:
With e-commerce, a company can reach out to the
customers worldwide. Unlike physical stores where only a limited number of
customers can be served, e-commerce allows firms to deliver products online to
customers in any corner of the world.
2. Small
Investment:
E-commerce firms do
not have to make investment to purchase land or rent or lease space for
physical stores. E-commerce is operated online through websites. There are many
domains which allow firms to create websites, which is less costly and far more
convenient. The marketer has to only create a website to target their
customers. Logistic functions can be outsourced by them. It reduces the need to
make heavy investments and also provides quick return on investment (ROI) to
marketers.
3. Less
Operating Costs:
In e-commerce
business, there is no need to hire a large number of employees unlike physical
stores. It reduces training cost, salaries etc. that have to be paid to
employees. Due to opening an online store there is no need of payment of rent,
utility bills and other miscellaneous expenses which can be incurred in
physical stores. This results into less operating cost of e-commerce firms.
4. Higher profit
margin:
E-commerce offers
benefit of global reach, so the marketer can reach to customers located all
over the world. There is also large demand for the products from all over the
world. There are no intermediaries like agents, wholesaler or retailer. Mostly
the transactions are done directly between trader and customers. So the commission
of intermediaries is eliminated. So all this contributes to higher profit
margin.
5. Reviews of
Customers:
The customer can
leave their reviews about their experience with product. It can give more
values to e-commerce website and help customers to build more trust about the
firm.
B) Benefits to
Customers
1. Variety of
goods:
E-commerce makes a
variety of products easily available to customers. They can select products
straightforwardly as per their budget and requirements. Details of all the
products are available the websites, which makes it easy for customers to
select the right product.
2. Right
Purchase Decision:
E-commerce
applications and websites provide options to compare and select the best
product. Customers can also read reviews and comments posted by other customers
on the website before making a final purchase.
3. 24 x 7
services:
E-commerce is not
limited to running on schedules as they function 24X7, unlike physical stores.
Customers and clients can buy whatever they want anytime on websites, which
they cannot in any physical store.
4. Increased
Competition:
Due to lack of entry
barrier, less investment, etc. the number of e-commerce firms entering the
business is increasing. It has resulted in increase in competition in the
ecommerce industry. The competition may benefit customers in the sense that
they get better quality products at discounted prices due to competition
between the e-commerce firms.
5. Convenient
Shopping:
Due to busy schedule,
many people are unable to go to physical stores for shopping. As a result, they
prefer to shop from e-commerce websites now. Online shopping saves their time
and also brings the products ordered at their doorstep which also saves their
money and energy.
6. Discounts and
offers: Every e-commerce
company offers discounts as well as offers such as free gifts, extra quantity,
warranty etc. on every purchase.
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