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Research Report on e-Commerce - Doing Business Online


NoMark 13 | -   Freelance Writer
Aug 11, 2016 | #1

Ways of Doing E-Commerce Business



Introduction

This brief report outlines the relevant issues involved with adopting an e-business strategy as well as an e-commerce system which supports supply-chain management. There will first be an examination of the global impact of e-commerce. It is estimated that approximately 27 per cent of consumers shop online. There will then be a discussion on the advantages, disadvantages, and supply-chain management issues involved with e-commerce. The final section is a discussion on the impact and risks that e-commerce can have on the business.

Global impact

Doing Business OnlineThere are now over 6.5 billion people on earth. Many of these people shop online. Research studies have indicated that approximately 27 per cent of the consumers globally shop on the Internet. This amount increases during the holiday season to over 50 per cent in the United States. Approximately 70 per cent of the customers who shop on-line have indicated that they visit competitor websites when the site they usually shop on is out of stock for the products they wish to purchase. About 33 per cent of these on-line consumers prefer using their mobile phone for online purposes such as price checks, in-store checks, and redemption of promotions. It has also been discovered that social networking sites have a significant influence on the shopping behaviour of customers with over 35 per cent indicating that their purchases are influenced by these sites.

The widespread use of the Internet has encouraged many businesses to begin offering their products online. This e-commerce includes the selling and buying of products or services over the World Wide Web and other computer networks. This business is conducted in two basic ways. The sales can be done business to business (B2B) or from a business to the consumer (B2C). Medium, small, and large business enterprises engage in e-commerce. There are also a number of individuals who sell services or products online.

A significant number of individuals in the United Kingdom have businesses which they run on-line from their home. It is estimated that there are now roughly 8,000,000 individuals located in the UK who operate their on-line business from their home. Some of these individuals sell their items at a profit while others produce the products and sell them online. Some of the more popular private sellers on eBay have annual returns, which exceed £18,000.

There is a wide variety of reasons, which have led to Internet shopping is popular. The World Wide Web is now widely available. People are using it to both communicate and conduct business on the largest media outlet in the world. A wide range of on-line businesses offered prices, which were lower than those at traditional stores. This is possible due to the relatively low overhead of an on-line business.

Advantages, disadvantages, and supply-chain management

Like nearly any approach to business, e-commerce has both its advantages and disadvantages. One of the advantages to e-commerce is the reduced costs of doing business. The virtual storefront is nearly always less expensive than a physical store. Furthermore, the hosting of a website is much not as costly as paying for employees, utilities, and rent. An online business provides a method for customers to access products from anywhere in the world where there is an Internet connection.

A disadvantage of doing business online is that steps must be taken in order to ensure that the process is done securely without the customer's private information being put at risk. This means that there has to be a secure e-commerce Gateway. The secure e-commerce page is generally more costly than an unsecured one, but is a necessity in an age when hackers and other on-line criminals seek to illicitly secure funds from others. An example of a method for accepting secure payments on-line is PayPal. However, the service collects a fee for each transaction.

It is important to remember that doing business online can have a significant effect on an already existing organisations supply chain. One of the advantages of e-commerce is that it can be used as a method for supporting supply-chain management. Dealing with orders electronically allows for the integration of both distribution and production processes. This can enable a relatively automated supply chain replenishment process. The replenishment information can allow businesses to operate with reduced inventory levels, eliminate multiple stocking points, and increase the rate at which products are replenished through synchronisation of demand and supply information. This can be done over the entire supply chain in real time. Examples of these systems include both assemble to order manufacturing and make to order products.

Another method for supporting supply-chain management is using e-procurement. This type of procurement involves all aspects of securing products being done online. This includes payment, ordering, contracting, sourcing, and requisitioning. By doing these activities on-line, the procurement process is streamlined with regard to both cost and time. The on-line acquisition of items to be sold allows for their acquisition to be less expensive and the savings can be used to increase sales through decreased prices.

Impact and risks

The impact and risks for introducing e-commerce into a company must be carefully considered. The increasing popularity of e-commerce has been positive for many consumers as it makes shopping more convenient. It is also provided significant income for individuals, small businesses, and larger enterprises. However, an inherent problem with e-commerce is that the seller and buyer usually do not know each other. This provides unique problems for e-commerce.

One of the negative sides of e-commerce is that scams emerge from both the buyers and sellers. People who are working from a computer screen can forget that their actions affect other people. This may be the reason that Internet fraud is so rampant. Buyers can defraud merchants by using stolen or fake credit cards. They may also use bogus payment accounts. Other consumers may claim that they have not received the product or the goods were damaged in order to keep the product and have their money refunded. This means that the process becomes costly for businesses selling products on-line since they must recoup their losses from these dishonest transactions. Any business considering selling products on-line must take into account this extra cost and increase their prices accordingly.

Unfortunately, there is also a wide range of sellers who defraud merchants. They may accept money without sending a product or mail an inferior product to the consumer. These same businesses may present fraudulent testimonials and feedback from nonexistent customers. This means that any legitimate business online must often make extraordinary efforts to ensure customers are confident they are one of the lawful enterprises, which operates online.

Another risk of doing business online is that even when the seller and customer are honest, other problems may arise. For example, if a business accepts a consumer's credit card along with their personal data, this information can be stolen by hackers. This can result in both the buyer and seller being vulnerable to dishonest individuals or groups. This has resulted in many on-line businesses losing sales due to the apprehensive this of customers. Once a customer must go to extraordinary measures to ensure that there fraudulently obtained credit card is not used dishonestly, they are nearly always reticent to make other purchases on-line.

Conclusion

This report outlines the issues involved in the adoption of an e-business strategy and e-commerce system for supporting supply-chain management. There has been considerable global impact regarding e-commerce with roughly 27 per cent of consumers shopping online. While this approach to doing business offers a significant number of advantages, there are also disadvantages. However, these disadvantages can be largely mitigated through careful planning. Primarily, the personal data of consumers must be closely guarded through secure systems.

References

How many people shop online. Deal Joy.

Baldwin, J. The impact of electronic commerce in today's society.

Winch, J. 8m Britons run online businesses from home . Telegraph online.

Reeves, L. Advantages & disadvantages of doing eCommerce business in an insecure environment . Chron.

King, D., Lee, J., Liang, T., & Turban, D. Electronic commerce: a managerial and social networks perspective. Companion Website.

The dangers of e-Commerce. Inter-party.




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