E-commerce stands for electronic commerce or EC. It is the buying and selling of goods and services using computer network, especially the World Wide Web. In practice, this term and a newer term, e-business, are often used interchangeably. For online retail selling, the term e-tailing is also used.
E commerce is functioning with the help of computers connected to internet. Here a computer network is formed by linking them with telecommunication channels. This system carries messages and images among users and thus an effective exchange of information is made possible.
Conventional commerce and e-commerce
Conventional commerce is taking place when both the buyer and seller meet, talk and came to a conclusion regarding the terms of trade. Both the parties should be present and therefore they should reach at one place to talk together. Moreover, the buyer can select from the limited varieties exhibited and stored by the seller in his show room. If the buyer is not satisfied with the products exhibited by the seller, he needs to go to another seller to select one. It is a time consuming and tiresome effort. In addition to these, the seller must be free, patient and able to enlighten the buyer regarding comparative advantages of each product, with a view to help him in taking a decision.
E commerce is the solution to all these difficulties. It can provide timely and accurate information about all products very easily. It can also exhibit the images of each product; now it is possible to show three dimensional (3D) images of the products. The buyer can very easily go to another shop or seller if he is not satisfied with one seller.
Advantages of e Commerce
• Business is possible at any time. It is open on 24X 7 basis and therefore continuous business takes place on day and night as well.
• Minimum cost is required to set up a business unit. Location, size of the shop, furnishing etc. are not at all worth considering.
• Market is open to whole world. There is no geographical limitation to business area.
• Transactions are possible at lightning speed. Computers can receive and process orders very fast.
• E commerce is the maximum convenient mode of shopping. The buyer can do shopping by sitting in his house or office.
• Customers get opportunity to select products from any shop situated anywhere in the world. They can see and evaluate products of different suppliers and can make best choice.
• E commerce ensures worldwide sales and therefore high volume of sales is possible.
• Sellers need not stock and exhibit high volume of inventories.
Disadvantages of e- Commerce
• A number of fake buyers and sellers may appear on the field. Some of them may be real frauds.
• Customers do not get an opportunity to touch or experience the product. He can see it as image, but should rely on the description available.
• It may take days to get delivery of goods. The seller needs to send goods through post or courier service.
• If the value of goods is too small, it may not be suitable to go for e commerce.
• E commerce is a business which depends heavily on trustworthiness of buyers and sellers. If they are not such kind of people, the business will be in trouble.
• E commerce is a new method of business. A number of people may resist o change from their usual practices.