The advantages of electronic commerce can be classified on the basis of benefits it provides to business, consumers, nation and the society.
Advantages of E-Commerce to Business
1. Decrease in cost
Th» cost incurred on advertisement and communication is lower as the business uses e-mail and online advertising channels, The cost incurred on human resources is also low as most of the business processes are automated. Middlemen are eliminated to a considerable extent as there is a direct link between the business and the consumers.
Due to effective supply chain, the cost incurred on maintaining inventories is reduced.
2. Effective customer service
E-commerce through internet provides up-to-date information about the business and its products to customers. By answering customers’ queries quickly and arranging immediate delivery of goods, a business organization is able to win the loyalty of customers. Effective communication and quick delivery of goods lead to total customer satisfaction.
3. Increase in revenues
Decrease in cost; increase in sales help the business to enjoy greater profits. The business being open 365 x 24 x 7, fetches revenues throughout the year.
4. Transaction efficiency
Automation of business processes helps the business to streamline its operating processes. Efficient procurement cycles reduce delivery delays. Minimum time taken to complete transactions also results in transaction efficiency.
5. Effective information management
E-Commerce helps business to create, process, distribute, store and retrieve any information cheaply and quickly. The above benefits enable a business organization to remove any communication gap between the business and consumer, or between business and business associates or between business and its employees.
Communication is considered as the lifeblood of any business organization. Good information management enables the top level management to take quick decisions and make use of the business opportunities at the right time. E-Commerce helps at every stage for an effective information management.
6. Global reach
Business organizations are able to send messages worldwide with the help of electronic medium, explore new markets and reach globally at lower cost. E-commerce helps to attract customers and business clients from anywhere in the world due to global reach of the internet.