E-commerce: Advantages, Disadvantages, and Possibilities

In the ever-evolving digital landscape, where commerce and connectivity intertwine to create vast networks of trade and communication, my journey has been both extensive and enlightening. With two decades of experience in website development and digital marketing, I have witnessed firsthand the seismic shifts that have transformed how we buy, sell, and interact.

In today's digital scenario, e-commerce has become one of the most widely used modes of business transactions. In fact, it has grown to be an integral part of the global economy. In a way, E-Commerce has brought a new way for businesses of all sizes to reach out to new customers and new markets. 

But, even with its vast impact, E-Commerce is not without its own limitations and disadvantages. As a means of guiding you in understanding the concept better, I thought of checking out the advantages, disadvantages, and limitations of E-Commerce in this blog post.

What is E-Commerce?

E-commerce stands for Electronic Commerce. Perhaps the concept does not need an introduction or definition, as almost every one of us is involved in making use of E-Commerce. However, for the sake of definition, E-Commerce refers to the process of purchasing goods or services through the use of the Internet.

Typically, an E-Commerce service comes with a virtual storefront that offers a title, image, and description of a product or service. When customers see a product and wish to buy it, they can add it to the shopping cart and check out with their credit or debit card. As soon as your payment is successful, the e-commerce service provider will make arrangements to send the products to your doorstep through a delivery service.

What are the advantages of E-Commerce?

On the face of it, E-Commerce does come with several huge advantages and benefits. We will take a look at the best advantages that an E-Commerce service offers you.

• It offers you a more comprehensive reach

The primary and colossal advantage that you stand to gain with E-Commerce is that it offers you a wider reach. You will have a limitation with a physical storefront but with an E-Commerce service, you will have the benefit of reaching almost an entire country, or even beyond it.

Apart from the broader reach, you will also be able to offer multilingual services to your customers. Using platforms like Shopify lets you set up your own shop front virtually.

• It comes with a Lower cost

Setting up and maintaining an E-Commerce service comes very easy and straightforward. In fact, you would also find them more affordable and seamless. In contrast, setting up a physical shop comes with a vast range of costs.

For setting up a physical store, you will need considerable investment in the form of rentals, overheads, wages, insurance, utility payments, and more. These overhead costs can take a toll on your finances and reduce your profits.

An E-Commerce business can be offered with a minimal cost and can be operated from home or from a small storefront.

• You can provide a detailed product description

An E-Commerce service can provide the customers with more detailed information about the products. This may not be possible with a physical storefront due to the limited space available. 

The E-Commerce service is an excellent option for providing detailed information on every product that you sell. This can be done through product videos and customer reviews. This can ensure that your customers tend to get a better shopping experience when compared to a physical storefront.

• Ability to process multiple orders at once

If you have sufficient hosting resources, processing multiple orders at once should be straightforward. The online stores have the ability to handle thousands of customers at once and process a vast number of orders at once.

The automation tools available with the E-Commerce service and hosting providers ensure that you can handle multiple orders with minimum disruption.

• A highly personalized service

It is much easier to offer customized services to customers than to brick-and-mortar stores. You can use data and technology to offer highly tailored services to your customers. You can even provide them with personalized updates based on their past purchase history.

If your service has a login feature, you can provide them with personalized greetings. You can also offer personalized ads to your customers based on their browsing history and purchase history. These additional gestures can go a long way in providing more value to your customers and enhancing their shopping experience.

• You can be online 24 x 7

Your online store is open 24 x 7. Your potential customers need not wait for you to be open between 9 am and 9 pm. You will be able to serve your customers every hour. The automated systems will help you handle every aspect of your customer’s requirements when you are away.

Having an online store that is open 24 hours a day will help you meet the demands of the customers with their varied shopping habits. That way, you can comfortably serve the night owls or even the early risers with extensive customer service. As for my personal experience, most of my purchases were made early in the morning, when I have just woken up and just idly browsed through my phone with a fresh mindset. This freedom is what binds the customers to your brand.

• It promotes impulse buying

The impulse buying is an excellent advantage that E-Commerce can help you with. These online shopping services can be helpful in getting your customers to buy things on impulse. Offering a product listing along with related products and attractive ads can make the customers choose to shop for something even when they are not really in need. 

Traditional stores do not offer the immediate satisfaction of browsing for products and buying them. Unlike conventional stores, E-Commerce services are not hindered by issues such as limited stock or long lines. 

That brings me to a few purchases I made just on an impulse. I was browsing a popular E-Commerce service for a cat toy, and by the time I left the store, I had bought a couple of other products that were not even distantly on my wish list.

• It offers you an excellent scalability

One huge advantage you can have with E-Commerce over traditional stores lies in the scalability that the online stores offer you. With a physical store, you have a limit to the extent to which you can extend your presence. 

E-commerce services make it very easy to have a proper inventory and set up your store. You can keep on adding more products, provide more customer-centric services, and enter new markets with practically no stress or issues at all.

Are there any disadvantages with E-Commerce?

Well, yes. As with any other invention or innovation, E-Commerce also comes with its own disadvantages. Understanding the Cons should help you plan your business strategies in a more positive manner. 

• Lack of personal touch

Didn't I mention that e-commerce offers the best options for personalization? That may make you feel confused when I say personal touch here. I was talking about the human touch that may be missing in the case of E-Commerce services.

The satisfaction we are likely to receive when interacting with the salespeople is missing when you choose E-Commerce. In the case of services like boutiques, this may be highly essential and important. Customers tend to be elated and feel valued when offered a human touch.

• No tactile experience with a product

No matter how well the demo video might be made, customers will miss out on the touch or the tactile experience with the product. I personally feel this to be a considerable impediment- especially when buying jewelry and similar other products.

Even in the case of clothing accessories, footwear, and the products that belong to this genre, I really miss out on the physical touch. Experiencing the fragrance when buying perfumes can be yet another example I tend to miss out on a lot. 

• Online frauds

This is another vast drawback that may drive the customers away from the E-Commerce services. Not that every E-Commerce service is a fraud, but there are chances that there are several that belong to that category. And this negative publicity can affect your own business.

Even when you may have stringent security measures implemented to safeguard your consumer interests. But, there are hackers who somehow gain access to your customer credentials and make purchases using their cards. Since most of the customers save their credit card details on the E-Commerce services, fraudsters can steal these details once they gain entry to the customer profile.

• Shipping times can be a huge concern

Delivery times can be a massive concern in the case of many E-Commerce services, and this can often make your customers unhappy with your services. Most of the E-Commerce services outsource the shipping to third-party delivery partners. 

Sellers may not have control over the delivery partners. Some customers may be reluctant to shop on E-Commerce sites because of the longer delivery times. If you want to win over your customers, you will need to develop a prompt and upfront delivery service.

I had once ordered a laptop from a prominent E-Commerce service. It was shipped promptly, but I don't know what happened midway, and it went back to the seller. The delivery partner did not assign any reason for the return. 

• Heavy competition

There has been a lot of competition in the online space. With the ease and simplicity offered in creating and setting up an online store, just about anyone can set up an online store. You will need to work really hard to make your E-Commerce service to beat the competition.

Certain niches can be quite competitive. It can be really difficult and, at times, impossible to beat the established players in your niche. In essence, the success of your online store is largely dependent on the hard work you are willing to put into your online venture.

• A little downtime can cause a loss of customers

For a successful E-Commerce business, your site needs to be up and running at all times. If your web hosting service or web server has any issues, you may end up losing a good number of valuable customers.

The E-Commerce scene is very competitive and customers you lose once may not be that easy to return. The customers who have a negative experience with your site may also share their negative experiences with their friends which can further deteriorate your image. This is likely to result in a huge revenue loss. 

Limitations of E-Commerce

Even when E-Commerce business may have a few disadvantages, they can be handled effectively if you opt for the right strategies. However, the E-Commerce service can inherently have its own limitations as well. 

Let us check out a few limitations that an E-Commerce business suffers. 

Technical limitations

E-Commerce relies on technology. That would make it essential for you to invest in tools and services to effectively and efficiently run your business. You need to have an excellent technical background and knowledge to handle the business more effectively.

That aside, an E-Commerce business also needs your customers to have good technical expertise. Without the proper knowledge of how to browse for products, add them to the cart, and check out, your customers may feel handicapped in making purchases.

Downtimes can be another reason that may affect your site and its service quality. This can be more pronounced for a self-hosted E-Commerce website.

Legal limitations

An e-commerce business needs to work with a host of legal compliances. They may include compliance with business policies, licensing and accreditation, and data-related laws. If you are working with established E-commerce services like Amazon or Flipkart, you will need to abide by their business strategies. 

If you are dealing with healthcare or financial products or services, you must check out the legal guidelines governing these specific products. You will also comply with the laws that govern the use of customer data. These can include how you access, store, and use customer data.

Limitations concerning logistics

One of the toughest tasks that you will need to take care of when handling an E-Commerce business is to handle the logistics. Shipping and warehousing are a couple of issues that you will need to take excellent care.

Shipping costs can eat into your profits. That would be more so if you are partnering with high-profile delivery partners. However, partnering with small-time delivery partners is likely to result in delays in deliveries. Striking the right balance between the parameters can prove to be extremely difficult.

To Conclude..

Well, that was a complete insight into E-Commerce and the complete spectrum of services that it covers. I assume I have covered almost every aspect of the advantages and disadvantages of the sector. 

However, even with the drawbacks and limitations, the E-Commerce business is not going anywhere. Have a clear vision in your mind about what you wish to do with the E-Commerce sector and take your own call. Remember that E-Commerce is here to stay and beating the limitations it has is the best way to achieve better standards in the right spirit.

If your e-commerce website isn't live yet, or if you haven't started marketing it, we're here to assist. Share your needs with me, and I 'll suggest the perfect platform for you, along with a tailored quote.