Siddhyanga Technologies Pvt Ltd

Advantages and Disadvantages in doing an online business or an eCommerce store

All businesses based on their business model have pros and cons. It is very critical to find those and plan our strategies accordingly. Here we pointed out the advantages and disadvantages faced in an eCommerce.

Advantages in eCommerce business

There are many well-known advantages which many businesses especially in eCommerce miss easily to consider when making decisions. Here we have listed those which can be used as a checklist for all businesses and move forward to focusing just on their business goals:

1. eCommerce & Reduced expenses

Currently, technology is facilitating many businesses to go online or start an eCommerce store at a very low cost at fast pace. Businesses no longer have to spend a large budget on advertisements through traditional mediums, nor worry about the expense of office space, etc.

2. Opportunity to Sell Globally

In a physical store, only a limited amount can be acquired and then sold to a limited audience or consumers. But on the other hand, an eCommerce store is limitless with respect to the target consumers and also if modelled correctly can lead to a zero inventory store. Your customers can make a purchase anywhere and anytime, especially more people are getting used to shopping on their mobile devices.


3. Higher ability to expand and be flexible

The growth of an online business is not limited by the availability of physical space. Even though logistics can become an issue as one grows, it’s less of a challenge compared to those for running a brick-and-mortar store. eCommerce merchants can scale up or down their operation quickly, and take advantage of the unlimited “shelf space,” as a response to market trend and consumer demands.

4. Highly targeted marketing and customization

eCommerce platforms give merchants the opportunity to serve up personalized content and product recommendations to registered customers. These targeted communications can help increase conversion by showing the most relevant content to each visitor.

5. Selling made easier through eCommerce

Merchants can only provide a limited amount of information on a product in a physical store. On the other hand, eCommerce websites can have information such as demo videos, reviews, and customer testimonials to help increase sales.

6. Higher ability to track customers and analytics

Whether you’re sending visitors to your eCommerce website through SEO, PPC ads or a good old postcard, there is a way to track your traffic and customers’ entire user journey to get insights into keywords, user experience, marketing message, pricing strategy, and more.

7. Faster sales of digital products

For businesses that sell digital goods, eCommerce allows the delivery of products within seconds of making a purchase. This satisfies consumers’ need for instant gratification and helps increase sales, especially for low-cost items that are often “impulse buys.”

8. Enhanced feedback and feed-forward

Customer feedback can be collected easily through the website in eCommerce, which can be then used to improve the quality of the products or services. Merchants can also create promotions and deals on the fly to attract customers and generate more sales.

Disadvantages in eCommerce business

As all business eCommerce too has few disadvantages which if properly managed can lead to faster growth and the business will flourish. On the other hand, if ignored can lead to a disaster:

1. Internet availability and connectivity for eCommerce

This is pretty obvious, but don’t forget that your customers do need Internet access before they can purchase from you in eCommerce ! Since many eCommerce platforms have features and functionalities that require high-speed Internet access for optimal customer experience, there’s a chance you’re excluding visitors who have slow connections. eCommerce businesses rely heavily (or solely) on their websites. Even just a few minutes of downtime or technology hiccups can cause a substantial loss of revenue and customer dissatisfaction.

2. Online security and fraud issues

More and more businesses and organizations in eCommerce have fallen prey to malicious hackers who have stolen customer information from their database. Not only could this have legal and financial implications but also lessen the trust customers have in the company. Credit card fraud is a real and growing problem for online businesses. It can lead to serious consequences such as loss of revenue, penalties, and a bad reputation.

3. High market competition

With online shopping or eCommerce, consumers can compare many products and find the lowest price. This forces many merchants to compete on price and reduce their profit margin.

4. Complex online rules and regulations

If an online business or eCommerce sells to customers in different territories, they’ll have to adhere to regulations not only in their own states/countries but also in their customers’ place of residence. This could create a lot of complexities in accounting, compliance, and taxation.

5. The Inability of having Physical experience

Some consumers value the personal touch they get from visiting a physical store and interacting with sales associates. Such personal touch is particularly important for businesses selling high-end products as customers not only want to buy the merchandise but also have a great experience during the process which is difficult in eCommerce. For example, no matter how well a video is made, consumers still can’t touch and feel a product. Not to mention, it’s not an easy feat to deliver a brand experience, which could often include the sense of touch, smell, taste, and sound, through the two-dimensionality of a screen.

Know more about eCommerce and the effects of COVID-19 on it here.

Want more help? Include us in your endeavor towards a sustainably developed future. Contact us to start the journey.

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We deliver high quality, affordable products & services to meet the objectives and goals of our client. Which majorly include Website/App development, Digital Marketing, SEO/SMO etc. Click on Inquire for any of your technology need we got you covered.

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