As the old ad states, “We’ve come a long way, baby”, we have gone from traveling thousands of miles to barter for goods and services to real time trading from our cozy beds and dining room tables. The ability to electronically transfer money into bank and financial accounts is referred to as e-commerce. Commercial transactions occur electronically over the Internet and email in a matter of minutes or even seconds.
The first step to making any decision about what is right for your online business is finding out how the service works. The process starts with a consumer searching for a product or service via their web browser, the product or service they choose goes into an electronic cart and the transaction is processed and shipped. Technology does most of the work without cumbersome paperwork and snail mail. While the efficiency and speed of the electronic process is a technological wonder, there are positive and negative aspects to e-commerce,
Advantages of E-commerce
Starting a brick and mortar retail store requires more time and money than an e-commerce website. Renting a physical retail location can cost thousands of dollars in rent. Some shopkeepers were shelling out $1,300.00 per square foot of space. That’s on the high end of retail rent but even lower rent options end up costing more in the end when maintenance, utilities, and insurance is factored in the cost, This doesn’t include the fee to join a chamber of commerce or other civic groups to boost sales. Factor in hiring costs and new retailers can find themselves in financial debt quickly. Don’t forget how much time it takes to renovate the location, interview and train employees, and constantly keep up the facilities.
It’s cheaper and faster to start an e-commerce aka online business. Marketplaces and some e-commerce platforms offer free or affordable sign-up options. The majority of the costs come from website maintenance fees and virtual “rent” for services such as Shopify and Magento. Hiring and training employees is affordable as well. E-commerce vendors don’t need to hire an entire brigade of employees to greet and upsell to customers. They can be hired from anywhere in the world and trained virtually for a quarter of the cost. The savings are passed down to the customers, creating a loyal client base.
A major advantage of running a business online is the ability to run 24 hours a day, 7 days a week internationally with little oversight. Translation and location technology has made it easier than ever to pull in consumers from all over the world without having to hire an in-person translator. This also means it’s simple to personalize a shopper’s experience by grabbing their data and creating specific landing pages for different audiences and diversifying email lists based on their preferences and location. Personalized email listings make offering VIP services, sales bundles and coupons a cinch. Marketing to new customers is just as simple. If people are interested in a product they are more willing to fill out surveys to catch a deal. Email marketing software like Mailchimp and Constant Contact have tools that let retailers create pop-up surveys and mailing lists so customers can be targeted for sales and new products.
One of the biggest advantages to e-commerce is being able to use repricing software. StreetPricer can connect to eBay and e-commerce platforms giving users the freedom to sit back and let the software scan for their competitors, reprice listed items and boost sales. Everyone likes a deal and using repricing software is a great way to ensure competition in a busy marketplace.
The Disadvantages of E-commerce
Despite the advantages of using e-commerce for online businesses, negative facets to using commercial technology exist. Customers and retailers need access to the Internet. If access isn’t available due to location server crashes they can’t view or purchase what you are selling. There’s not much online retailers can do if the Internet isn’t available for certain areas or someone simply doesn’t have access. E-commerce platforms often offer hosting and top ranked servers to ensure stability and limit crashes.
Another part of technological life is the knowledge that shoppers can’t try what they are looking for before they buy it. They can’t try on clothing to make sure they fit and they can’t touch, taste or smell the product before deciding on their purchase. This can be a turn off for more cautious and particular consumers. One resolution vendors have come up with is offering free samples. If that is not possible, researching product sizes and reviews is a necessity. If it seems daunting, augmented reality e-commerce allows shoppers to view the product in view a product in real time. Sephora and Tap Painter use this technology to help buyers determine makeup shades and wall paint.
Last but not least, sellers have to ship their products and customers have to wait for them to arrive. People can be impatient and it can be stressful to find the most affordable and fastest shipping methods. While vendors can’t change personality types they can offer free shipping and use online tools to determine the best method for the right price. Online shipping programs like Shipstation allows sellers to try out their automated shipping services for free to save time and limit mistakes.
What all of this comes down to is you have to do what is best for your business. While e-commerce can be affordable and easy for some people, online business owners should be aware of the benefits of e-commerce while understanding the challenges. Thankfully, humans have been given the gift of creation and innovation to help them navigate the twists and turns of the road of commerce.