Ecommerce

Over the past several years, the internet has become a major source for information and a huge component of the sales and marketing arena. Electronic business, or e-business, is defined as a form or procedure for conducting transactions by allowing consumers to buy products and services using the internet. Thus, providing a new model of business, which sanctions these groups to operate at a high level of efficiency and aggressively participate in the global network economy. However, along with these benefits also comes a negative side to e-business, which includes such things as unreliable service, and most notably, an increased risk for identity theft. In the following paragraphs, examples will be given of types of e-businesses and the impact and effect they have on the global market.

EBay is a prime example of how quickly an e-business can achieve world-wide success. EBay is a website that allows consumers to buy and sell merchandise from online auctions. Its primary appeal stems from its simplicity, as it is incredibly easy to use, both from a buyer and seller’s standpoint. Online auctions can be viewed by anyone in the world, giving consumers an endless possibility of items to bid upon. Sites like EBay and Amazon.com are unique in the fact that their livelihood is contingent upon the internet for success. Since these businesses do not have physical locations for consumers to shop in, they rely primarily on their websites to fuel future growth.

Wal-Mart, the world’s largest discount retail chain, has also jumped on the e-commerce bandwagon. After noting the success of other e-commerce sites, this retail super-giant began offering a vast array of products available on its website. This has become an all-too-familiar phenomenon, as thousands of brick-and-mortar companies have turned to the web to reach a broader consumer market. By turning to this type of sales technique, these businesses are able to increase profit margins by providing a convenient way to shop for products offered in their physical locations.

E-businesses definitely have their perks and advantages. For starters, online shopping sites level the playing field. Buyers have access to thousands of stores, which makes shopping anywhere from Neiman Marcus to Wal-Mart a possibility. This is a tremendous convenience for shoppers in rural areas, as oftentimes shopping in higher-end department stores would entail a road trip to the nearest city. These online stores also reap the benefits, since they are able to appeal to a larger consumer base.

A second positive attribute of e-commerce is that it is a relatively inexpensive way for a business to expand. By providing goods and services online, sellers have immediate contact with buyers across the globe. This is a huge advantage over similar companies that do not use this form of business, because it enables them to expand their customer base by not being limited to just one location. This is typically what happens due to the confines of an actual or physical setting.

Many businesses, especially smaller ones, benefit from e-commerce because they do not have to incur the cost of building and planning a real store. Since e-commerce has skyrocketed in popularity, a great deal of business owners are running their operations from home. The result is fewer expenses, ultimately making the business more profitable.

Finally, consumers reap enormous benefits from e-commerce because it is a fast and convenient way to shop. Buying gifts and such online is an ideal solution for the person who hates holiday crowds or just prefers to “window” shop from the comfort of their home. Another positive aspect for consumers is that it is a superb way to do comparison shopping. This empowers buyers by ensuring that they are making educated purchases so that they are getting the biggest bang for their buck.

Although there are numerous advantages to e-commerce, there are also some disadvantages. Identity theft is the number one factor discouraging buyers from purchasing goods and services online. As e-businesses first began to take off, frequent stories of stolen credit card numbers and the misuse of personal information caused many consumers to become hesitant about shopping online. In a survey conducted by Gartner Inc. in May of 2005, “more that 1 million consumers have been tricked into divulging their personal information to senders of so-called phishing e-mails, with financial losses totaling nearly $1 billion”, (Identity Theft Concerns Grow, Tools Lacking, June 2005). This poses serious challenges for online businesses since they must implement new security measures to keep online payment sites secure.

Unreliable service can also be a major downfall of e-businesses. Sites such as EBay must deal with situations in which the buyer never receives the item