BENEFITS, LIMITATIONS AND

BARRIERS OF E- COMMERCE

From – 1. ANJALI
2. ANUPAMA
3. ANKITA
4. ANURAG

E- commerce is the buying and selling of products by using electronic means such
as the internet and other computer networks. It is the commercial transaction that
involves transfer of information over the internet.

E-commerce is changing the way we do business. Here are some of the benefits and
limitations of e-commerce.

Some of the benefits of e-commerce are:

– Economical and Lower Cost: E-commerce is an effective medium of doing
business. A person doesn’t need to set up a business premise. Unlike brick and
mortar business environment, in e-commerce there is no need to set-up premises.

– Better Customer Service: E-commerce ensures better and quicker customer

service. Online customer service allows quicker satisfaction of customer needs
and making the customer happier.

 
-  Better Comparative Analysis: E-commerce allows a better comparative
analysis of different products. This is because today, almost every product is
available online.

- 24/7 POTENTIAL INCOME :- One of the advantages of

ecommerce is that online stores are always open for
business. With your Facebook ads, you can attract someone
at 11 p.m. or 4 a.m.. Most physical location stores are open
between 9 a.m. to 9 p.m. By being available at all hours, you
can attract people who would normally pick up a product in
stores, if the store were open. You can also attract those
who may have odd work schedules or who don’t have time
to shop in-person. For a customer to order at night, you
don’t need to have employees working the night shift to
ensure all orders get processed. You’ll never need to hire a
security guard.

- EASY TO SHOWCASE BESTSELLER :- Ecommerce

benefits like being able to easily display best-sellers makes
it easier to show off products to customers. While you can
design a brick and mortar store to sway people to buy
certain products, it’s easier for a customer to find the best-
sellers in an online store. The reason why you want
customers to buy your best-sellers is because they’re
proven. Other customers have already bought them and are
happy with their purchase. If you want to showcase new
products to customers you can include them in your
upsell, email marketing or retargeting ads.

- AFFORDABLE EMPLOYEES :- One of the benefits of

ecommerce is that hiring employees is affordable. You can
choose to outsource work to virtual assistants in countries
where the cost of living is much lower. You’ll need fewer
employees in an ecommerce business than a retail location.
A huge advantage of ecommerce is you don’t need to hire
employees at launch. You can start and run an ecommerce
business all by yourself.
 - EASY TO RETARGET OR REMARTKET THE
COUSTOMER:- It’s easy to create retargeting ads to
retarget customers in your area when running an online
business making it one of the most profitable ecommerce
benefits. You can create a Facebook pixel. You can use the
Shoelace Shopify app to retarget your browsers who visit
your store but don’t buy. In ecommerce, you can retarget
people who add to cart but don’t abandon and don’t buy or
who visit a blog post and never buy. You can collect email
addresses easily with an effective pop-up or lead magnet
and continue marketing to your customers after you’ve
made the sale.

E-commerce comes with many limitations as well. Some of

the most common limitations of E-commerce are:
– Technological Limitations: Technological limitations of e-commerce have
restricted a large number of people from using e-commerce. Internet has not
touched the lives of every common man.

– Unsuitable for perishable items: E-commerce is not suitable for perishable

goods and services. Perishable goods require proper storage and warehousing. For
such items people always prefer conventional mode. For purchasing perishable
goods like food items people generally prefer conventional shopping mode.

-  Security: Security continues to be an issue when it comes to e-commerce.

Online businesses are not trusted by the customers as there have been many
cases of frauds and faulty payments.
 -  E-commerce is not free: E-commerce is not free. According to industry
reports, many small businesses are fighting a losing battle in front of the big
business.
-  Ineffective Customer Relations: Most of the businesses have forgotten that
customer relations are difficult to maintain when it comes to e-business. They
never realize that e-business also requires loyal customers.
- Tax Issue: In case of different geographical locations, sales tax
becomes an issue. Many a time sellers have faced problems in the
computation of sales tax. Moreover, physical stores have a risk of
losing business if online transactions are exempted from taxation.
- Cultural Obstacles: As the process of eCommerce encompasses
customers across the globe, the habits, traditions, and culture differ.
There may also be linguistic problems and all these may lead to issues
between the seller and buyer.
-  Product Suitability: As already mentioned, it is not possible for
people to physically examine the product in eCommerce. In many
cases, the original product may not match with the picture or
specifications in the eCommerce site. This absence of ‘touch and feel’
creates a discouraging effect.
-  Fear: In spite of popularity, there still resides an element of doubt in
the mind of people when it comes to online shopping. This is because
the customer cannot physically examine the product and is not sure
about the features and attributes. This is why a lot of people prefer
shopping from physical stores.

BARRIERS OF E- COMMERCE

- Customs procedures are problematic when shipping large numbers

of small consignments :- Complicated and overly-burdensome customs
procedures are a general problem for all international trade. However, they can be
even more problematic for e-traders, as they send many small consignments rather
than single large ones. E-traders are often small businesses and, as a result, are more
sensitive to the costs incurred as a result of customs procedures. Some businesses
have stated that customs procedures have contributed to their decisions not to enter
certain markets. Russia was one example given by many businesses in this regard.
- Customs duties on returned goods :- The option to return products bought via
the internet is an important aspect of consumer rights, however, the costs incurred and
administration involved in dealing with cross-border returns are a burden on e-traders.
Although his is a problem in relation to all markets outside the EU, Norway and
Ukraine have been highlighted as particularly troublesome. One business also
mentioned Turkey, where the seller is responsible for all costs incurred with returns. It
can thus prove costly for e-traders who ship their goods over long distances.
- Corruption renders e-commerce difficult :- Corruption is a huge problem
for international trade in general, often in relation to customs procedures, and relates
to anything from bribery to the disappearance of items. Both small and large
businesses highlighted this problem. An increasing number of businesses deemed e-
commerce to be particularly sensitive to corruption, as it is often many small
consignments that are shipped, which are ‘easier to misplace’, and e-traders often do
 not have the staff on site to be able to follow up any problems. The fact that the
interpretation of what can be classified as corruption differs between countries is also
a problem

- Differences in the right to cancel and return a purchase create costs

and administrative difficulties :- A common problem for e-traders is the
variation in consumer legislation in the different countries where they operate. This
primarily relates to the right to cancel or return a purchase. A number of companies
saw these variations as a major barrier, while others considered them to be less of a
problem as they thought it was relatively easy to adapt to the different requirements.
The latter were often companies with large sales volumes and generous return
policies. The question of differences in consumer legislation adds to the legal
uncertainty for e-traders who find it both difficult and costly to discover what local
consumer legislation dictates.
- Rules concerning consumer information and website content :- Many
businesses have described laws and regulations dictating what information websites
must and must not contain as problematic for their business operations. A common
problem is the requirement to use local languages. Businesses regularly adapt their
websites to the local language, but in certain cases, such as in countries with more
than one official language (i.e., Canada), this can be costly – especially if the sales
volume is small. It is also common for countries to have requirements relating to the
labelling of products and the provision of customer information.
- Product labelling and requirements for registration with the
authorities are burdensome :- It is common for countries to have
requirements for product labelling; these can apply to the information displayed on
the label on clothes, or to user manuals that need to be in a local language, for
example. Some countries require businesses to register with the local authorities in
order to be allowed to sell certain products. These requirements increase the
administrative burden for businesses, particularly if their sales are targeted at a large
number of markets. It is easier for businesses with a local establishment to manage
these problems as their volumes are normally larger and because they can manage the
various requirements for each country separately. E-traders, however, rarely have a
local establishment and thus have greater difficulty in dealing with this type of
problem.

Thus, e-commerce is something that requires keen

strategy. A business must evaluate the pros and cons of e-
commerce before going for it. Undoubtedly, the scenario of
e-commerce has changed for good.