Positive and negative effects of e-business
Electronic business or e-business refers to trade in goods and services using the internet. Such business transactions take place among businesses or individuals. In addition to buying and selling products and services online, it includes supply chain management, electronic order processing, and customer relationship management. Due to wide reach and availability of the internet, major corporations are conducting e-business to make supplies, collaborate on sales promotions and conduct joint research. Figures say that the climbing internet usage rate assures e-business growth. The trade in e-services provides employment to young people in several developing countries. At the same time, every business kind has pros and cons which we will discuss here.
Positive effects of e-business:
Here are few reasons why businessmen prefer e-business over conventional one.
Develops global economy
Every country in this world produces different raw materials as per their abilities and capacities of their land surface. They utilize them in the production of finished goods. No single country produce all the goods we use today. To share the fruits of all the manufactured goods produced across the world, international community stresses upon globalization. E-business contributes in developing global economy by trading across international borders and reaching customers in the four corners of the world.
E-business supplies numerous e-services and is a superior platform for services such as teaching. An individual with excellent knowledge in a specific field, say physics, can start online classes and educate children regardless of their location. In this way, e-business can impart similar and reliable knowledge among young kids of different nations and promote equality. Thus, it delivers win-win results for both business owner and consumer.
Moderate overhead cost
An e-business eliminates the need for a physical location to set up a business. It consumes cheap phones, rents and utility bills than traditional businesses. The negligible demand for man force reduces the cost of paying employees. Interestingly, one can run a business from home by transacting through a website. For the start-up businesses, it is a productive tool.
Read also: Positive and negative effects of eCommerce
Low transaction cost
A conventional business requires workforce who helps in completing the entire transaction. Also, extra hands mean increased amount. But an e-business requires limited man force to complete an online transaction. Here, the internet is an alternative to a salesperson. Also, the online payment processing software eliminates the need for a store clerk. Hence, e-business makes transactions cost-effective and limits the burden on the companies.
Open business hours
One prime necessity of an e-business is an internet. Today, the internet is available 24 hours a day, which means a business stay open. In this way, e-business breaks down the time barrier that a typical business encounter and increases flexibility.
Negative effects of e-business:
Though internet grants indefinite benefits, the online stores still face several challenges.
Cyber attack is a major concern in an e-business. Hackers manipulate business websites to gain financial data and initiate theft. For an online shopping, the customers need to provide a shipping address, credit card details, and contact details. Sharing of private information can put them in danger if hacked. Due to this reason, an e-business finds it difficult to attract customers. This, in turn, affects its profitability and growth. Also, the time required to learn good security measures is a major hindrance.
Extended delivery time
One prefers buying a physical good from a local store rather than ordering it online. As delivery takes few days to reach the end customer, who pays at the time of ordering. E-business benefits little to the consumer in such cases. Due to this, groceries and confectionery product e-business makes small profits.
Lacks physical proximity
A physical touch and smell of a product influence a person’s decision to buy it. An e-business offers no such opportunity to its customers. This factor is a major obstacle to the expansion of various online stores such as garments, leather or shoes among others.
The companies across the globe face numerous challenges which include technology unavailability, expertise dearth, and shipping of grand products. Political issues among few nations lead to the legal restriction on some products from specific countries. Thus, a few companies can participate in an e-business.
Due to the increased internet benefits in the commercial sector, e-business is expanding at a rapid pace. Governments across the world are making productive policies in this specific field. Though it possesses stressful limitations, one can still eat desired fruits by implementing effective measures.