e-Commerce

Thousands of people around the world shop online to buy products, goods, clothes and many other valuable and personal item that suite their own taste. This is known as E-Commerce or otherwise known as Electronic Commerce. A definition for E-Commerce is the buying or selling of services and products over the Internet. This helps a company to gain profits without needing to build, buy or rent a shop floor which would cost them a lot of money. E-Commerce is a widely popular service used by millions around the world. The profit generated by E-Commerce makes it one of the greatest tools for companies to use. Nowadays with vast improvements in technology E-Commerce is the main aspect of E-Business and there is a lot of security involved within E-Commerce to ensure that a transaction is conducted correctly. The first ever E-Commerce available was catalogues but as time and technology progressed through the centuries transactional websites were also created. One of the most well-known and popular transactional website created is Amazon. E-Bay is another well used transactional website which has thousands of people flocking into every minute.

Amazon

Since first launched in 2004, Amazon has been a very successful multi-national E-Commerce website. It is estimated that around 700 million people flock into its website every year, thus making it one of the most successful E-Commerce website created in the whole world and also the world’s leading online retailer. In 2011 the company turned its revenue to $48 billion – showing the vast amount of popularity the website has had all around the world. Initially established as an online bookstore, it soon revolutionised to selling CD’s, DVD’s, Music, Clothes, Games, Electronics, Jewellery, Toys and other merchandise. The diversity of products the website sells has gained it fans all around the world. Due to the large influx of people visiting the website and the high amounts profit generated, Amazon decided to expand internationally. It now holds website in the United Kingdom, Canada, Spain, Italy, France, Germany, Japan and China. In the coming years it is expecting to launch websites Netherlands, Poland, Brazil and Sweden. The company has provided call centres all around the world and are also building software development centres to make their website more efficient and easy to navigate.

I have used Amazon various times to buy books that I need for my education. I have loved their delivery service which is always very efficient and reliable. Without Amazon providing me with the books I would only be able to stumble across my learning which would not be very practical as I won’t be able to have a very good future. Ever since I first used Amazon to buy my books I have never used another website to buy my books.

Advantages

E-Commerce itself is the main advantage which helps companies to generate large amounts of profits. There are other major advantages for both customers and sellers.

Advantages to the Customer

1. No travelling required for the customer

This means that the customer can save time and money. It can be used in emergency situations like when you are in a rush and you need to buy something you can order it online and it should usually arrive at your house in about a week or in some cases the very next day. No travelling is required so this saves money on the fuel or the bus ticket charge to initially get to the store and back.

2. More options

People can buy different products and unlike in a normal shop if you can’t find something you can search for it on another website, instead if you were in a shop you would have to go in and out of shops till you find the item you are looking for which might be really tiring or wasting your time doing nothing.

3. Easier to Find

It is far easier to buy products online as all website pretty much have a good layout to help you find the item you are looking for. If this does not work there is a search box where you can search for the product you want and it will show you the product. In other cases there are categories for which you can search for products. If this was in a real store you have to look for shop assistant to ask them and sometimes they can give you bad directions or at other times they will send you to another assistant which can often get frustrating

4. Compare prices

This is great for the customer as it save them money which is what normally everyone is aiming for these days. If you find something on a website and find it is really expensive you can search for it on another website and it might be cheaper which means you have got the same item for a cheaper price than it was on another website.  If this was in the shop you would have to settle for the product no matter what the price unless you are willing to look around in other shops which most people are not.

Advantages to the Seller

1. It creates a wider customer base

Customers all around the world can visit your website to view what products you would offer before setting out to buying them. More and more people will know about your website and buy products from it. This also an advantage to the customer because if they do not live near to the shop they can get the product they are looking for online.

2. Reduces Overheads

As a company uses a website to sell their products they can save more money compared to running a shop. They will be able to close down shops that are not selling well which means less staff needs to be hired but the same amount of service can be offered through the website. Another reason is that if a shop is being rented out it means the company will have to pay money to hire the shop on top of that they have to pay for signs, display cabinets, cleaner etc. It also means you won’t need much plastic bags which is good for the environment as well as the company as less money need to be spent buying plastic bags.

3. Higher Sales

This means more people can buy products from your website all over the world. This can generate large amounts of profit for the company. An initial set up of a website will only cost about £250 whereas to open a real shop you need around £15,000. This means more people come through a virtual Internet store to buy more products compared to in a real store.

Disadvantages

There are lots of disadvantages of buying products online. Some of them include:

1. Fraud

Fraud is one of the most serious and risky reasons why many people try to avoid online shopping. Fraud is the stealing of someone’s personal or credit card details through a website. It is one of the most serious risks faced by a buyer. When people make transactions through an online website they trust the website to be safe and most of the time they are but there is always a 1% chance that the website is not safe and your details will be placed in the hands of the hacker. To ensure a website is safe during a transaction just check the address bar to see if it says ‘https’ or check if there is a ‘small lock’. This ensures the website is safe however it is not always guaranteed who your details will fall into.

2. Delivery and Posting

With millions of products being bought online there is mostly problems with the delivery and posting. Royal Mail is the main delivery service used by sellers. Companies like royal mail deliver and send millions of items across the world. There is always the chance that yours might be misplaced. Sometimes your product might also turn up late, on time or sometimes really late. As a customer you might get frustrated with these and might not use the website again.

Payment Options

Through and online transaction you obviously cannot pay with cash. When E-Commerce started the most popular way of payment was with a credit card. When making a transaction the main pieces of information asked to be provided by the website is:
 

·        Name of the Cardholder

·        Card Number

·        Expiry date of the card &

·        Sometimes the pin number

These four details are vital to make a transaction are different for each individual. Due to the high risk that the information they might provide would be at risk from fraud, people are always uncertain when making a transaction online. Due to this people most times need to make an account as a commitment that you trust the website. This would therefore increase the risk that their information will be held safe by the website. A revolutionary way of solving this issue is by PayPal. PayPal has no direct links with your bank and therefore you can ensure that your information is kept safe. You make a PayPal account normally like how you pay using a transactional website. The trick is when you want to pay for a transaction on an online website you log into your PayPal account and you add how much money the product costs to your PayPal account. Then you fill in the information about your PayPal account on the transactional website and then you wait for your payment to be processed. By the less amount of money you are putting into the PayPal account to complete the transaction the risk of fraud is less likely. Also there are rules and regulations that cover the sale of products online. It is much safer to use a credit card or a debit card online as it is underwritten by the banks and is covered by the bank’s insurance.