If you are thinking to start an eCommerce business this is the right time. I’m saying on behalf of reports of Statista. It says, “Over the last few years, e-commerce has become an indispensable part of the global retail framework. Like many other industries, the retail landscape has undergone a substantial transformation following the advent of the internet, and thanks to the ongoing digitalization of modern life, consumers from virtually every country now profit from the perks of online transactions. As internet access and adoption are rapidly increasing worldwide, the number of digital buyers keeps climbing every year. In 2019, an estimated 1.92 billion people purchased goods or services online, and during the same year, e-retail sales surpassed 3.5 trillion U.S. dollars worldwide.”
Furthermore, as per the statistical website the eCommerce share gonna lift up to 22% of worldwide total retail sales in 2023 which is projected around 4.28 Trillion US Dollars. And that’s huge! Isn’t it?
As we are looking into many of the opportunities there are cons of the matter too!
The ‘brick and mortar’ model aka traditional sense of doing business is slowly diminishing to smaller participation in retail sales day by day. Keeping the stats in mind lets us bring the facts out to the public.
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eCommerce business: Introduction to the transformation
The transformation of ‘brick and mortar’ began after the rise of the internet. This happened as per the below-explained timeline of eCommerce.
1969: Compuserve is founded
As per Bigcommerce, Compuserve was founded by two college students doing their time in electrical engineering called Dr.John R. Goltz and Jeffrey Wilkins. It was built utilizing a dial-up connection.
In the 1980s, furthermore, “CompuServe introduced some of the earliest forms of email and internet connectivity to the public and dominated the eCommerce landscape through the mid-1990s”.
1979: Michael Aldrich invents electronic shopping
In the year 1979, Mr. Aldrich introduced electronic shopping by connecting a TV to a payment processing computer via a telephone line.
Thus closed information systems were opened and shared across secured data transmission lines to the outside parties. And therefore, this technology became the foundation of modern eCommerce.
After this event, a series of events took place which includes, the formation of Amazon, eBay, Etsy, etc.
Pros of eCommerce business
After a discussion of the history of eCommerce and its founding principles, we ought to concentrate on the advantages of eCommerce. The merits of eCommerce are listed below.
Low financial costs
The startup money or the initial amount to start an eCommerce business is very low. As you have got an online portfolio to represent the same, you will need less space to run your eCommerce business.
An eCommerce business runs 24*7*365 and thus offering a major advantage at its site. Also, as it has got its presence availability more than a conventional store, it will have a fair chance of increasing sales in the extra time offered.
A seller can sell internationally over the internet if he’s got an eCommerce face to his business. This, in turn, increases the overall sales of the seller as he has got opportunities of a kind.
The attractive photos on the product page induce impulse buys. As photography just changes the scenario of a presented object. An object in the picture looks much more attractive and appealing to buy as compared to a real object.
This pleasing tactic helps the sellers get more sales and profit margin out of their product.
Eliminates the need for a physical store
Whether you’re located in a big city or small town, if you’re doing eCommerce business, you will not need a physical store. You will need only photographers and content writers to present your store on the web.
By the way, you will need inventory to manage all your returns and process orders.
Digital items can be sold for no overload of work
All thanks to eCommerce digital products as software, games, music, etc. are sold instantaneously. So the seller doesn’t need to worry about warehouse costs for keeping just digital items.
Easy to scale up
It is easy for an eCommerce business to scale up while climbing the ladders of success. While a traditional business usually takes months to reach a remarkable scale, an eCommerce business usually takes weeks before it sets off.
Keeping contact with customers
Keeping contact with customers is often easier with an eCommerce platform. An eCommerce merchant captures the customers’ information in the form of their email, phone number, etc. This can be further used to create contacts with the customer such that the customer agrees to buy again from the same online portfolio of the seller.
eCommerce allows you to track logistics when a product is ordered on the platform. Nowadays they provide real-time tracking of the ordered product. This is an advantage as compared to the ‘brick and mortar’ model.
Cons of eCommerce business
After the pros of eCommerce let us discuss some cons of the topic as well. There are negative aspects of every positive object. Let’s find out some cons of the eCommerce business.
Website Crash: You can’t sell
The major problem of an eCommerce business is: it is dependent upon a large number of internet constraints such as:
- Viable internet connection
If the website is overloaded with traffic it crashes. This process closes your eCommerce business for good until the site is refurbished to live.
eCommerce is highly competitive
As discussed eCommerce is growing at an unbelievable rate. With such a rate of increment the business is very competitive. Furthermore, the situation of COVID-19 has forced people to turn into eCommerce modules. With such an unavoidable crowd that is seeking a ‘success chance’ of its own, making way is definitely very difficult.
Shipping your products
The next problem that comes to you is shipping the product to the customer. It sounds simple but shipping with the information provided by the customer in any area is a difficult task.
Many consumers still prefer a personal touch
Many consumers still are ‘vintage-styled’ and like the personal touch of the product before buying it. For such old-fashioned customers, the eCommerce business has always been too advanced and fatigued platform without satisfying the quest of the customer.
Security risks and credit card fraud
There has always been a security risk on the online web platform. As per Statista, “In 2020, the state with the highest losses in fraud complaints was California, where a total of around 400.91 million U.S. dollars was paid to fraudsters. The state with the second-highest losses was Texas, with about 203.05 million U.S. dollars paid out to fraudsters”.
With such an amount of fraudulent money, one can imagine the damage done to the economy.
Shopping is about sharing gratitude
Shopping sometimes becomes a matter of mutual affair. A relationship is built with the shopkeeper while spending time with him/her. This relationship flourishes into benefits for both the shopkeeper.
One can not offer such a relationship in an eCommerce business.
Conclusion: Good or bad for eCommerce business?
eCommerce sometimes offers great value over price on products that are otherwise very difficult for the consumer to find out. Offering many advantages and disadvantages eCommerce is the emerging market of the era. Saying it bad for business is just ‘too foolish’.
Talking about the goods it had have done to the business is uncountable. It has brought the global markets, separated by distances together. Therefore, from my perspective eCommerce has always been good for business in spite of its cons.