E-Commerce: Advantages and Disadvantages

ecommerce photo
Photo by melenita2012

The advantages of E-commerce have been widely discussed in research journals and textbooks, but the disadvantages are rarely mentioned.

Advantages of E-Commerce

Lower overall costs to setup and maintain than a physical store or a mail-order catalog.
Global Reach: A business can reach a broader market on a national or even international level.
Always open for business: The business is always open 24/7.
Convenience: Provides convenience to customers enabling them to shop anytime, anywhere and (if mobile ready) on any device.

Disadvantages of E-commerce

Limited to shoppers with Internet access: Not every potential customer has access to the internet or is computer literate, thus limiting the customer base to those who have internet access and are computer savvy.
Lack of the opportunity to test / feel / touch the product in person. (Which some customers who like to shop online for lower prices have found a way around that! they do go to a physical store (such as Best Buy), test the product and then order it online.
Lack of the personal human interaction: Some people, even the computer savvy, cherish the human factor especially when buying an expensive item, such as a piece of jewelry.
Privacy issues:  Some people just fear sharing personal information.
Security concerns: Many potential customers try to avoid online shopping due to the negative propaganda about hacking and identity theft, publicized by news agencies and others. This creates fear, paranoia and lack of trust.
Competition: Nowadays, it is easy for anyone to build an online store in a relatively short period of time. This creates competition and confusion among potential customers trying to sift the good and trustworthy stores from the bad.
Having an online store with prices displayed, has the risk of competitors knowing the prices and entering into price wars with the business.
There is always the risk of customers after seeing the prices, to go and search for cheaper prices elsewhere to buy the same product that they see on the website. (We’ve seen people copying images of a piece of jewelry from BlueNile.com and going to local jewelers and try to duplicate the item for less!)