My previous post had stated about the advantages of e-commerce for consumers. Generally, we admit that e-commerce had ease our life to perform the trade activities such as online banking, online purchasing and so on.
But, can we say that e-commerce only benefit the consumers?
Of course no. E-commerce also can give a lot of benefits to business organizations especially in term of cost reduction and reaching global market. Now, let we see what they are?
- Reduces Costs for Inventory Management
With e-commerce, the suppliers can reduce costs to manage their inventory of goods because they can automate the inventory management using web-based management systems. This method indirectly can save their operational costs.
“Specifically, e-commerce replaces the manual business processes with their automated electronic equivalents to accelerate ordering, delivery and payment procedures. This electronic paradigm has saved businesses billions in operational and inventory costs.” Rafay Ali (2004)
- Reaching Global Market
E-commerce allows the suppliers to reach global market segment. In other words, it allows the suppliers to increase their sales meanwhile decrease the investment costs.
“Organizations can reach global areas that would have been otherwise difficult.” Pallab (1996)
“It expands the marketplace from local and regional markets to national and international markets with minimal capital outlay, equipment, space, or staff.” Cross-Industry Working Team (1999)
- Monitoring the Consumers’ Buying Habit and Interest
The suppliers can monitor the consumers’ buying habits and interests so that they can tailors their offer suit to consumers’ needs and keep the ongoing relationship with them.
“Internet technologies also permit sellers to track the interests and preferences of their customers with the customer’s permission and then use this information to build an ongoing relationship with the customer by customizing products and services to meet the customer’s needs.” William King (2006)
- Reduces Costs To Establish Store Front
The overhead costs to build the physical store front may be prevented to the suppliers who use e-commerce as their business operation.
“A traditional business may have large overhead costs associated with maintaining a storefront. But a web-based business does not necessarily have that type of overhead, which may mean that continued growth becomes easier.” Melissa J. Harvey (2002)
- Reduce Labor Costs
The labor costs can be reduced with e-commerce because the sellers can automate their online store fronts.
“Automated order tracking and billing systems cut additional labor costs, and if the product or service can be downloaded then e-commerce firms have no distribution costs involved.” William King (2006)
- Reduce Advertising Costs
E-commerce can reduce advertising costs because it is easier to update the advertisement using software technology.
“Print advertising can get expensive as there may be a need to update regularly, which requires new work be planned and generated. It is much quicker and more cost effective to update and maintain e-commerce marketing campaigns, especially as technology continues to improve.” eCommerce Optimization (2007-2008)
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