The Home Depot E-Business

The Home Depot

Home depot started as a brick-and-mortar business back in 1981, when it first became public, and is now engaged in e-business. Home Depot is one of the biggest home improvement retailers in the world, selling products in all of North America and via its websites. E-business has affected Home Depot’s business processes in many ways. Home depot has a massively productive supply chain; each store stocks about 30,000-40,000 different products; In contrast, the online selection exceeds 700,000 products (Soni, 2015). Additionally, thanks to E-business, home depot also offers an enhanced selection of products through their company websites, www.homedepot.com and www.homedecorators.com.

E-Business has been very beneficial to home depot, some of the advantages of e-business are that it allows for superior merchandise customization and reduction of space constraint in the stores, as well as improved sales productivity metrics (Soni, 2015).There are, however, limitations to E-business – especially with a company like home depot - most of which consist of logistical challenges. Transitioning to E-business was not an easy step, “In addition to selling vanities, humidifiers and garden hoses, it has to figure out how to get 130-pound Jacuzzi tubs and iron patio sets from warehouses to customers' doors within days” (Banjo, 2014). Home Depot had as estimated $78.8 billion of sales last year, of which only 3.5% were online sales (Banjo, 2014). Despite this low percentage, home depot is growing faster than its competitors and therefore plans to invest $1.5 billion this year for technology and supply chain enhancements that will connect its stores and internet business, including their new online fulfillment centers such as blinds.com and other website acquisitions (Banjo, 2014).

There are several benefits and risks associated with using and not using the internet for business transactions. One of the major benefits related to using the internet for business accomplishments is increased exposure. Exposure is one of the greatest rewards achieved from moving a business online. People from all over the world are able to find the business, see what they offer and place an order from the comfort of their home and personal computers. Without internet presence businesses, such as home depot, limit themselves to just local customers, word of mouth and print advertising (Writing, 2015).

Risks related to using the internet for business transactions include legality, fraud, startup costs, and internet security. Legality is an issue because the product or products being sold might not be legal in some or all areas therefore shipping to these areas without knowledge of the local legal laws might open a business to liability and prosecution. Also, some locations require sales tax to be collected on all internet sales therefore the business has to be setup to collect the appropriate state sales tax in order to avoid problems with the state revenue departments (Writing, 2015).Fraud is a another big issue with web based business activities because there are few ways to tell if the person initiating