Advantages & Disadvantages

of E-commerce

IRFAN UR REHMAN
FA17-BBA-069

SUBMITTED TO: ALI MOHSIN

Introduction

E-commerce mainly known as electronic or internet commerce refers to the buying and
selling of goods and services primarily on public world wide web and on private internet-
based networks (intranet & extranet). In other words, it means that when buying and selling
using internet, it is e-commerce.

Some of the famous e-commerce websites that are buying and selling products online are:
Amazon.com, ebay.com, Olx, Daraz.pk, Flipkart, Ali express and many more like these
operating business on websites. In this way, e-commerce has changed marketplaces,
individuals and societies.

Advantages of E-commerce

There are certain benefits of e-commerce due to which it is widely spread successfully today
causing a major technological innovation in business world. Some of these advantages are
mentioned as following: -

1. A global reach: The e-commerce has provided sellers an international approach by

removing the barrier of place. This also means that buyers and sellers can meet with
each other in a virtual world without the interference of location.
2. Lower costs: A big benefit of e-commerce is reduced transaction costs. It has
eliminated many fixed costs such as location, rent, utilities, etc. So, this allows the
organizations and individuals to enjoy a higher margin of profits. It also benefits in
lower start-up costs.
3. Affordable and easy access to employees: Due to e-commerce, organizations and
entrepreneurs can get required employees from anywhere in the world. There can be
virtual assistants in countries where the cost of living is much lower.
4. 24/7 Services: One other great advantage of e-commerce is the convenience it offers
to the buyers with respect to time. A customer can place order 24/7 according to his
availability time using the website.
5. Attracting customers through offerings: Useful products according to the need and
demand of customers help the e-commerce to attract them and thus earning a big
revenue.
 6. No need of Intermediaries: Electronic commerce also allows the customers and
businesses to be in touch directly, without any intermediaries. This allows for quick
communication and transactions saving time of buyer and seller. Hence, it also gives a
valuable personal touch.
7. Ease in delivery of goods: E-commerce also provides ease in quick delivery of goods
with very little effort and saving time of the customer. The ease is that customer gets
the product at his doorstep.
8. Quick access to complaints: With the help of e-commerce, customer complaints can
also be addressed quickly because these complaints are addressed online, and they are
noticed by sellers and resolved easily saving time, energy and effort.

Disadvantages of E-commerce

When starting an online store, it is important to be realistic so below are a few ecommerce
disadvantages that our merchants have run into, that do not apply to a physical store: -

1. Effort in accurately portraying products: As in e-commerce, there is no physical

interaction with products, so the sellers must accurately depict their products online
by HD pictures and writing a complete description of product. Poor quality pictures
cannot attract the customers fully and unable to satisfy them.
2. High online Competition: E-commerce users face a high competition in their market
due to increased number of sites. For that purpose, businesses bring instant
innovations in their products offered.
3. High risk of Failure: E-commerce industry has a high risk of failure. Many
companies operating on websites have failed miserably due to technical
incompetencies
4. Security issues: The main disadvantage is concerned with the security of e-
commerce. Sellers face it in the situations of hacking websites. Whereas, customer
concerns are related to credit card theft, personal identity theft etc.
5. Site Crash Issue: The worst of the ecommerce disadvantages is when no one can
order online from the store if it site crashes. That’s why it’s important to ensure that
the website is hosted on the right platform.
6. Lack in interpersonal relationship: At times, e-commerce can feel impersonal. So, it
lacks the warmth of an interpersonal relationship which is important for many brands
and products. This lack of a personal touch can be a disadvantage for many types of
services and products.
7. Fulfilment Problems: There can also be fulfilment problems during e-commerce
business. Even after the order is placed there can be problems with shipping, delivery,
mix-ups etc. This leaves the customers unhappy and dissatisfied.
8. Quality Assurance: Most of the time, there is issue faced by the customers in quality
guarantee of the product. They face difficulty in judging the product online through
pictures and descriptions written.