Limitations or Disadvantages of Electronic Commerce

Limitations of Disadvantages of E-Commerce

Though e-commerce offers many advantages to customers, business, society and nation, there are still some areas of concern that need to be addressed. The following are some of the limitations or disadvantages of e-commerce.

1. Security

The biggest drawback of e-commerce is the issue of security. People fear to provide personal and financial information, even though several improvements have been made in relation to data encryption. Certain websites do not have capabilities to conduct authentic transactions. Fear of providing credit card information and risk of identity limit the growth of e-commerce.

2. Lack of privacy

Many websites do not have high encryption for secure online transaction or to protect online identity. Some websites illegally collect statistics on consumers without their permission. Lack of privacy discourages people to use internet for conducting commercial transactions,

3. Tax issue

Sales tax is another bigger issue when the buyer and seller are situated in different locations. Computation of sales tax poses problems when the buyer and seller are in different states. Another factor is that physical stores will lose business if web purchases are free from tax.

4. Fear

People fear to operate in a paperless and faceless electronic world. Some of the business organizations do not have physical existence, People do not know with whom they are conducting commercial transactions. This aspect makes people to opt physical stores for purchases.

5. Product suitability

People have to rely on electronic images to purchase products. Sometimes, when the products are delivered, the product may not match with electronic images. Finally, it may not suit the needs of the buyers. The lack of ‘touch and feel’ prevent people from online shopping.

6. Cultural obstacles

E-commerce attracts customers from all over the world. Habits and culture of the people differ from nation to nation. They also pose linguistic problems. Thus, differences in culture create obstacles to both the business and the consumers.

7. High Labour cost

Highly talented and technically qualified workforce are required to develop and manage the websites of the organization. Since internet provides a lot of job opportunities, business organizations have to incur a lot of expenses to retain a talented pool of employees,

8. Legal issues

The cyber laws that govern the e-commerce transactions are not very clear and vary from country to country. These legal issues prevent people from entering into electronic contracts.

9. Technical limitations

Some protocol is not standardized around the world. Certain software used by vendor to show electronic images may not be a common one. It may not be possible to browse through a particular page due to lack of standardized software. Insufficient telecommunication bandwidth may also pose technical problems.

9. Huge technological cost

It is difficult to merge electronic business with traditional business. Technological infrastructure may be expensive and huge cost has to be incurred to keep pace with ever changing technology. It is necessary to allocate more funds for technological advancement to remain competitive in the electronic world.