Benefits of e-commerce

Lower Cost

Doing e-business is cost effective; it reduces logistical problems and puts a small business on a par with giants such as Amazon.com or General Motors. In a commercial bank, for example. a basic over-the-counter transaction costs £0.50 to process; over the Internet, the same transaction costs about £0.01. Every financial transaction eventually turns into an electronic process. The sooner it makes the conversion, the more cost-effective the transaction becomes.

Economy

Unlike the brick–and–mortar environment, in e–commerce there is no physical store space, insurance, or infrastructure investment. All you need is an idea, a unique product, and a well–designed web storefront to reach your customers, plus a partner to do fulfillment. This makes e–commerce a lot more economical.

Higher Margins

E–commerce means higher margins. For example, the cost of processing an airline ticket is £5. According to one travel agency, processing the same ticket online costs £1. Along with higher margins, businesses can gain more control and flexibility and are able to save time when manual transactions are done electronically.

Better Customer Service

E–commerce means better and quicker customer service. Online customer service makes customers happier. Instead of calling your company on the phone, the web merchant gives customers direct to their personal account online. This saves time and money. For companies that do business with other companies, adding customer service online is a competitive advantage. The overnight package delivery service, where tracking numbers allow customers to check the whereabouts of a package online, is one good example.

Quick Comparison Shopping

E–commerce helps consumers to comparison shop. Automated online shopping assistants called hopbots scour online stores and find deals on everything from apples ro printer ribbons.

Productivity Gains

Weaving the web throughout an organization means improved productivity. For example IBM incorporated the web into every corner of the firm – products, marketing, and practices. The company figured it would save $750 million by letting customers find answers to technical questions via its website. The total cost savings in 1999 alone was close to $1 billion.

Teamwork

E–mail is one example of how people collaborate to exchange information and work on solutions. It has transformed the way organizations interact with suppliers, vendors, business partners, and customers. More interactions means better results.

Knowledge Markets

E–commerce helps create knowledge markets. Small groups inside big firms can be funded with seed money to develop new ideas. For example, DaimlerChrysler has created small teams to look for new trends and products. A Silicon Valley team is doing consumer research on electric cars and advising car designers.

Information Sharing, Convenience, And Control

Electronic marketplaces improve information sharing between merchants and customers and promote quick, just–in–time deliveries. Convenience for the consumer is a major driver for changes in various industries. Customers and merchants save money; are online 24 hours a day, 7 days a week; experience no traffic jams, no crowds, and do not have to carry heavy shopping bags.