E-COMMERCE Unit 2 Business Development GCSE Business Studies

E-Commerce Involves trading over the Internet, may be with: –Customers –Other businesses Opens business to the worldwide market Increases competition

Advantages of E-Commerce for a Business Wider global market has a number of key benefits: –The business will become better known –attract a greater number of customers –have opportunities for increased sales and increased profits –take advantage of economies of scale. Keep ahead of competitors, particularly if they do not use e-commerce No need for expensive showrooms and premises. This is a major cost saving. Advertising costs are kept to a minimum, it is cheaper to advertise on the Internet. The business is always open so there are opportunities for sales at all times.

Advantages of E-Commerce for Customers Shop at a time convenient to them Wider choice of goods Shop around for the best deals Website can give detailed information Immediate transactions Repeat orders are easier – details are stored

Disadvantages of E-Commerce for a Business Wider global market has a number of key drawbacks: –Competition with a large number of others –Designing and updating the website is expensive –Market research needs to be carried out. This will take a lot of time and money. The business has to pack products very carefully and distribute them over a wider area. This adds to the cost. Not suitable for all types of business e.g. certain groups, such as the elderly, may find computers intimidating.

Disadvantages of E-Commerce for Customers Security issues e.g. card details Must have Internet access Product quality issues Not suitable for all goods e.g. very large or perishable Returns can be difficult Loss of personal touch – no salesperson to ask