E-Commerce Advantages and Disadvantages.

E-Commerce Advantages and Disadvantages.

Advantages of e-commerce

The main advantage of e-commerce is its ability to reach a global market, without necessarily implying a large financial investment. The limits of this type of commerce are not defined geographically, which allows consumers to make a global choice, obtain the necessary information and compare offers from all potential suppliers, regardless of their locations.

By allowing direct interaction with the final consumer, e-commerce shortens the product distribution chain, sometimes even eliminating it completely. This way, a direct channel between the producer or service provider and the final user is created, enabling them to offer products and services that suit the individual preferences of the target market.

E-commerce allows suppliers to be closer to their customers, resulting in increased productivity and competitiveness for companies; as a result, the consumer is benefited with an improvement in quality service, resulting in greater proximity, as well as a more efficient pre and post-sales support. With these new forms of electronic commerce, consumers now have virtual stores that are open 24 hours a day.

Cost reduction is another very important advantage normally associated with electronic commerce. The more trivial a particular business process is, the greater the likelihood of its success, resulting in a significant reduction of transaction costs and, of course, of the prices charged to customers.

Disadvantages of e-commerce

The main disadvantages associated with e-commerce are the following:

• Strong dependence on information and communication technologies (ICT);
• Lack of legislation that adequately regulates the new e-commerce activities, both nationally and internationally;
• Market culture is averse to electronic commerce (customers cannot touch or try the products);
• The users’ loss of privacy, the loss of regions’ and countries’ cultural and economic identity;
• Insecurity in the conduct of online business transactions.