E-commerce- What you should know
May 9, 2019
The consumption landscape now operates in a dynamic changing environment. The use of smart phones and laptops/desktops has resulted in the spread of E-commerce. As more consumers shift their lives online, the demand for trade facilitation over the internet increases. More consumers opt for convenience and choose to shop from a monitor at a remote location than having to be physically present at a shop.
This is E-commerce, which refers to the buying and selling of goods and services using the internet and the transfer of money and data to execute these transactions. While it is generally used to refer to the sale of physical products online, it can also describe any type of commercial transaction that is facilitated through the internet.
Trade over the internet has come a long way since the first online sale in 1994. Since then e-commerce has evolved to make products easier to discover through online retailers and marketplaces. The platform has also allowed businesses both big and small to market and sell their products at a scale that was never possible in traditional retail.
Types of e-commerce
There are different types of e-commerce models. It can take on a variety of forms involving different transactional relationships between businesses and consumers. The following are some examples:
- Retail – The sale of a product by a business directly to a customer without any intermediary.
- Wholesale – The sale of products in bulk, often to a retailer that then sells them directly to consumers.
- Dropshipping – The sale of a product, which is manufactured and shipped to the consumer by a third party.
- Crowdfunding – The collection of money from consumers in advance of a product being available in order to raise the startup capital necessary to bring it to market.
- Subscription – The automatic recurring purchase of a product or service on a regular basis until the subscriber chooses to cancel.
- Physical products – Any tangible good that requires inventory to be replenished and orders to be physically shipped to customers as sales are made.
- Digital products – Downloadable digital goods, templates, and courses, or media that must be purchased for consumption or licensed for use.
- Services – A skill or set of skills provided in exchange for compensation. The service provider’s time can be purchased for a fee.
Advantages of e-commerce
There are a lot of advantages to e-commerce. These may range from convenience and a variety of options to choose from.
- Availability – services are usually available round the clock. The customer can avail or enquire about the services or products any time they wish. The payment can also be done by transferring money at any time of the day.
- Variety – there are a lot of options available for consumers. Different websites and businesses market for their services in ways to attract the consumers who can choose the one which suits their budget.
- Eco friendly – making all the transactions through internet has paved the way to becoming more environment friendly. There is very less paper work involved in e-commerce. The electronic transactions have helped to digitize all the information thereby reducing the use of paper.
- Less travel – Shopping was a tiring affair in the bygone days where ‘going shopping’ meant traveling. Now that you can shop from the comfort of your home, there is no traveling involved. Keeping people at home also means less pollution!
- Reviews available – Almost all the e-commerce sites have a review or comments page. The customers who have already availed the service or bought the product can write their reviews about the same in this page. So, it becomes easy for a new customer to take a decision about using the service or product.
Disadvantages of E-commerce
E-commerce may not be for everybody. It has shortcomings that consumers need to be aware of. The following are some disadvantages:
- No guarantee of product quality – consumers are unable to test the quality of the product (good or service) until receiving it.
- Lengthy process – Consumers may not receive the product instantly. It may take weeks or months for consumers to receive the packages depending on how far it is to be sent.
- Anyone can set up an e-commerce website – this sometimes leads to scam and phishing sites.
- Security – Hackers target web shops more often than you think. There is no security and protection provided for the exchange of credit card information and mailing address which could lead to fraudulent activities and identity theft.
- Mechanical failures can get quite more punishing – there is no guarantee that traders will offer repair, redress or refund should an item encounter a mechanical default.
Consumers are encouraged to call the National Consumer Helpline on toll free number 155 should they need further advice or information regarding E-commerce or if they would like to lodge a complaint regarding an E-commerce trader.