The Golden Age of E-Commerce
Updated: Jun 29, 2021
The future is here, finally.
As we head towards the promised digital age, E-Commerce stores are gradually becoming more prevalent than ever. There are an estimated 12 to 14 million E-Commerce stores worldwide, with these numbers continuing to grow every day.
Electronic Commerce, E-Comm in short, is based on the principle of conducting business over the World Wide Web and transferring funds digitally from one end to another. The tremendous popularity of Online Stores does indeed make sense; with just a few hundred dollars in hand, you can have a fully functioning online business in little time. Compared to the investment that the traditional business approach requires, this is no less than a dream come true.
Communication is at the heart of e-commerce and related communities. However, many people tend to mistake their Operational Cost for Overhead Cost. Well, these are not the same. The difference is that Operating Cost is incurred on the day-to-day working of businesses, whereas, Overhead Costs are incurred irrespective of whether production is taking place or not.
Since E-Commerce solely takes place online, it reduces Operational Costs. Hence, there is a downfall in the cost associated with Overhead Cost as now, e-commerce operations do not require a salesperson to woo the customer, a cashier to ring up the sale, or a brick-and-mortar store for the customers to visit. The customer benefits equally as time, money, and effort spent are reduced. They can order products at the click of a button and get schemes like free deliveries and cash backs. For example, a restaurant’s clientele may live with in a 10-mile radius, which could restrict the owner's growth opportunities.
Several traditional business ventures, such as bookstores and video rental stores, have become unprofitable because they cannot compete with the low-cost structure of their online counterparts.
Last but not least, E-Commerce is also responsible for the possible reduction in the cost of inventory and distribution. E-commerce can also reduce transaction costs by streamlining supply-chain management and distribution.
If a store expands its product selection online, more orders can be shipped from the warehouse directly to the customer. The store can now serve lucrative niche markets. It does not have to stock a lot of hard-to-find parts in its showroom.
For example, its customers can order the parts online and ship them to their doorstep.
But like a coin, there is a flip side to E-Commerce as well. Let us consider some of the common problems caused due to the use of e-commerce.
E-commerce, in layman's terms, has countless complications related to the return of delivered products due to damage during transportation or dissatisfaction on the part of the customer, which results in a fall in sales.
Moreover, the glaring lack of a personal touch is one of the main reasons for the fall in sales as customers remain discontent with the final product. Due to this, there are a large number of people who put their faith in old retail stores rather than these new digital establishments.
Moreover, despite all its complications and shortcomings, we must accept that E-commerce has made our lives much easier, as placing an order for our favorite item is now just a click away, the festive sales on these sites being the icing on the cake!