Benefits of eCommerce

E-Commerce offers the following to business organisations.

1. International market place:

The market for a Web based business is not restricted bound by any geographical boundaries. This means that various restrictions existing in different geographical regions in traditional business environment is avoided in e-commerce. Goods can be sold in new markets, especially geographically remote ones.

Single physical marketplace located in a geographical area has now become a borderless marketplace

including national and international markets. E-commerce enables business firms to have access to people all around the world. In effect all e-commerce businesses have become virtual multinational corporates.

2. Operational cost savings:

The cost of creating, processing, distributing storing and retrieving paper-based information has decreased. This has led to the savings of cost.

3.Reduced inventories and overheads:

E-commerce firms need not stock large inventory. This is based on collecting the customer order and then delivering through JIT (just-in-time) manufacturing. This is particularly beneficial for companies in the high technology sector, where stocks of components held could quickly become obsolete within months. For example, companies like Motorola mobile phones, and Dell computers gather customer orders for a product, transmit them electronically to the manufacturing plant where they are manufactured according to the customer’s specifications like colour and features and then sent to the customer within a few days.

4. Mass Customisation:

E-commerce has regolutionised the way consumers buy goods and services. In the e-commerce environment firms are able to customise their products and services to the customer’s requirements. In the past when Ford first started making motor cars, customers could have any colour so long as it was black.

Now customers can configure car according to their specification within minutes on-line via the www.ford.com website.

5. Lower telecommunications cost:

The Internet is much cheaper than value added networks (VANs) which were based on leasing telephone lines for the exclusive use of the organisation and its authorised partners. It is also cheaper to send a fax or e-mail via the Internet than direct dialling.

6. Digitalization of products and processes:

Digitalisation of products and processes particularly in the case of software and music / video products, which can be downloaded or e-mailed directly to customers via the Internet in digital or electronic format within 24-hour-time. Businesses can be contacted by or contact customers or suppliers at any time.