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Advantages & Disadvantages of Ecommerce

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Ecommerce is a booming industry. Almost 60% of all retail sales in the U.S. are now done online, and this number is expected to grow even larger as more and more people purchase items over the internet. This increased demand has led to an increase in both the number of e-commerce companies and types of e-commerce platforms. But, as with any industry, there are pros and cons to consider before getting started, and it can be difficult to determine which platform is best for your company.

Online shopping has become increasingly popular. For many people, e-commerce provides an easy way to buy items without having to go to the store. And with more than 3 billion people owning a cell phone, not using e-commerce is almost impossible for most companies. But does it really come without any disadvantages?

Modern technology in the form of web-enabled smartphones and other gadgets has changed the way we shop. Today, we don’t need to go anywhere in order to make a purchase, we can just order products from our homes or offices and have them delivered directly to our door steps. Shopping for clothes, books, furniture, everything is just a click away.

This change in shopping habits also means that employees at brick-and-mortar stores are being laid off left and right. Online shopping has been blamed for putting tens of thousands of people out of work and drying up tax revenues for cities and towns across the country.

Here, you can learn the advantages and disadvantages of Ecommerce so you can make an educated decision about your company’s future.

Advantages Of Ecommerce


·  A Huge Market

This is a huge advantage for ecommerce companies. As the popularity of ecommerce grows, more people are shopping online. This means that the demand for Ecommerce has increased exponentially as more people see the benefits. Not only are sales increasing, but the complexity of selling on a large scale is also rising as more companies launch ecommerce websites. And with more than 1.5 billion people using the internet, ecommerce sites are increasing in number as well. This massive market means that there is money to be made for companies that have the right system.

·  Better Insights through Tracking and Analytics

One of the most obvious advantages of online retailing is that it provides better insights into what people are purchasing. The statistics from this industry are incredible, with about one in five Americans (more than 90 million people) shopping online. This statistic indicates that online shopping is a crucial part of the retail industry, especially when you consider that that half of all ecommerce companies in the U.S. were started just in the past few years.

Even more importantly, the online data in this industry allows retailers to further understand how customers shop and their customer behavior. These insights can help you improve your product and service offerings, while increasing sales and improving your customer experience.

·  Highly Responsive to Trends & Consumer Needs

While e-commerce websites offer convenience for customers, they also have to make the necessary changes in order to keep up with demand. In fact, the majority of ecommerce websites operate on a 24-hour schedule.

In a traditional brick-and-mortar store, it might be hard to predict what the demand is for a product. This is especially true for seasonal products, as demand for a product is likely to rise during the holiday season. However, with online sales, this scenario is entirely different. ecommerce companies can monitor sales and trends in real-time. And as soon as a product sells out, they can increase their stock by adding more product.

·  Lower Cost of Setup

The major advantage of ecommerce platforms is the low cost of starting up. Just as low-cost cars are outselling expensive cars, most businesses agree that it is much cheaper to start an ecommerce business than it is to begin with a traditional business. So, if your company is eager to be online for the next generation of consumers, it is easy to start an online retail store for as little as $10 a month. But this doesn’t mean you should just jump right into the online world. You should consult with a reputable ecommerce consultant before implementing this new business strategy.

·  Better Opportunities to Grow & Scale Your Business

One of the most appealing aspects of ecommerce is that it can be used to build your business’ brand. This is because many people have a hard time understanding that your company is in business, so if you can show them what you do with simple ecommerce portals like Amazon, it can help to boost your company’s reputation. Furthermore, b2b platforms and other similar to it have helped many b2b businesses in growing and scaling the sales of the company.

· Personalized Marketing

One of the biggest advantages of ecommerce is the ability to keep track of customers’ browsing behavior. Allowing users to create a shopping cart for their site allows a site’s creator to see what users are browsing on the site, what they are purchasing, and what products they are interested in purchasing next. Not all ecommerce platforms offer this feature, but many do, and it makes for a personalized experience for a user who is looking to purchase a particular item. This is a great advantage because it allows a company to offer a more personalized shopping experience for each customer.

Knowing their preferences also allows you to offer effective incentives for customers to boost retention and entice them to come back to your store. The more personalized the incentives are based on the data you collect, the better your chances will be to boost loyalty and return business. Not to mention that with the right incentives, referrals and recommendations are also much more likely to happen.

·  Not Bound by Physical Barriers

There are many reasons why people like shopping online, but one of the most obvious is that it’s easy. While some people may love the experience of shopping in a store, most people do not enjoy the hassle of physically shopping for things in a busy and crowded area.

With ecommerce, customers are able to buy products wherever they want. Rather than having to plan a shopping trip based on when the stores are open, they are able to find what they want online and make a purchase whenever they feel like it. They also do not need to leave their home to do so. The possibility of not being in a rush to finish a shopping trip because there is no need to rush the checkout process is what makes ecommerce such a convenient way to shop.

·  Lower Marketing Costs

When you’re selling online, you don’t have to advertise to generate sales, which saves you a lot of money. The average price of an item on an e-commerce platform is about 30% lower than the typical retail price, and online users are twice as likely to purchase from an online store. Not only that, but the average e-commerce website usually receives about 100% more orders than a regular retail store.

It’s easy to spend money on marketing, but having an e-commerce site means you can avoid this hassle. Using the power of the internet, you can easily market your product on social media or add it to your website. Although this will cost you more in the long-run, it can be a lot less expensive in the short-run.

·  Lower Salary Expenses

Because people are buying more items online, they’re shopping for a lower-priced product. However, this also means that the prices you pay are lower as well. While you might be paying less to your employees, you’ll also be paying less for a product. If you sell a lot of items, your sales will be going up, so you’ll be spending more on your products. So, not only will you be saving money on your product, but you’ll also be spending less on your employee salaries as well.

·  Easier to Retain Customers

Customers always want their purchases to be as simple as possible, and that’s why they’re always looking for the best online shopping platform. For many companies, getting into the ecommerce game is no easy task, and that’s why they should look into ecommerce platforms with a simple, easy-to-use interface.

Aside from being simple to use, ecommerce platforms are also very easy to integrate with other online platforms. This gives you the ability to easily connect your ecommerce site with Facebook, Google, Instagram, Twitter, or any other social media platforms to increase your exposure and reach a wider audience.

Disadvantages Of Ecommerce


·  Difficulty in Building a Good Relationship with Customers

While you may be used to customers at your store, you will be meeting them face-to-face for the first time through an online transaction. Online shopping is usually reserved for last minute purchases and there’s often a lag in customer service responses, leaving you without feedback or often simply unanswered questions.

·  Lack Of Overall Ability to Offer an Amazing Shopping Experience

As online shopping becomes easier, online shopping apps continue to be released. These apps can make the online shopping process seem effortless, but what about the customer service aspect of online shopping?

People come to brick-and-mortar stores to try on products and purchase goods. When you sell products, you must make sure that the customer service experience you offer is excellent. Poor customer service online or in-person can result in negative reviews and account boycotts. In fact, data has shown that dissatisfied customers now spend more than they ever would in an attempt to get the seller to fix their problem.

·  Very High Competition

Though ecommerce sales continue to grow, there is a significant shortage of skilled employees to meet the demand. Competition in the ecommerce marketplace is very high, and there are very few companies that meet the standard. Because of this, it is hard for small businesses to hire the right people for the right jobs.

·  No Internet No Shopping

While online shopping has completely changed the dynamics of trading in both b2b and b2c industries however, one of the biggest disadvantages here for customers is that they can only shop online if they are connected to the internet. It is quite a simple thing to understand, as long as you are connected to the internet, then you can shop all you want online but, as soon as you get disconnected, then say goodbye to your online shopping.

·  Higher Chances of Fraud

Consumers have been falling victim to scams from fraudulent sites that use razor-thin layers of elaborate filters to confuse people into thinking they’re looking at the real site of a trusted retailer. Then, those users are charged a hefty fee and eventually scammed out of the product they purchased.

A lot of the users are teenagers using their parents’ credit cards, according to Fox 13 Now, and that’s what makes these high-tech scams so frustrating. As consumers, we’re trying to do our part by avoiding the temptation of free trial offers or impulse purchases, but it’s hard to know how often that little voice in the back of our head is right when we’re trying to get those overpriced Christmas gifts for mom and dad.

·  Hacking & Other Security Issues

With online shopping so ubiquitous, so many consumers have to be mindful of cyber security risks. Many online retailers offer free or low-cost fraud protection in order to minimize the risk of shoppers being scammed.

·  Data Retention Laws

Businesses don’t just have to worry about security risks when it comes to payments or delivering packages. Many brick-and-mortar stores may also be compelled to retain customer data in order to comply with data retention laws.

·  Digital Restrictions

The idea of online stores being required to store digital copies of consumer data has been an important concern for a number of organizations. For instance, many organizations believe that they should not be required to scan and retain paper copies of customer statements and documents.

·  Shrinking the Job Market

While ecommerce has helped the ecommerce industry grow, it’s also claimed thousands of jobs as a result. There were roughly 31.9 million jobs in the U.S. last year that were created by ecommerce, according to the Ecommerce News and Tracking Survey. Ecommerce is still growing at a double-digit rate, so even if the growth rate slows down a bit, the online shopping industry will continue to employ thousands of people in the future.

Author Bio:

Tabish Khalid works as the Digital Marketer for eWorldTrade. He develops and implements digital strategies for eWorldTrade, along with aligning business goals with digital marketing activities. He actively contributes articles related to b2b, digital marketing and content marketing.


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November 9, 2021



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