Friday, April 10, 2009

What are the Disadvantages of Ecommerce?

Ecommerce, a shorter term for electronic commerce, was initiated sometime in the 1990s. It has changed the way businesses operate. People can simply go online to shop for things. This includes trouble-free payment and having the product delivered right at your doorstep. However, there are several disadvantages of ecommerce apart from all its ease and comfort.

It’s one thing to be able to physically examine a product you want to get. Ecommerce doesn’t allow you to do this. A buyer can only bank on their expectations of the product, the information provided by the supplier and the reviews from other customers in making their purchase.

Disadvantages of Ecommerce / The waiting game

The time spent on waiting and actually wondering if, not when, the product will arrive before they actually get their hands on it can be a process that is both uncertain and long for them as opposed to that of going into a shop, having the privilege of scrutinizing the product before buying it and going home with it totally satisfied. Assurance of customer contentment should be one of the disadvantages of ecommerce that online establishments should consider to rid.

When customers don’t get what they expect and are disgruntled with the product bought from an online shopping site, it would take quite a lengthy process in complaining and sending it back. When they do that, one question on their minds would be, “Who would shoulder the postage expenses?” When customers send products back, they don’t have the assurance of getting their money back. Seeking for legal action will also be burdensome for the customers especially in cases when there is an issue of distance.

The risk of credit cards

Paying for a product by credit card can also pose as one of the disadvantages of Ecommerce. A card holder can be skeptical with security issues on the card information and their finances as well. Hacking has become rampant nowadays and the fear of such can discourage consumers from doing online shopping.

Shops provide personal interaction with buyers. Sales agents are hired to wait on customers and answer their queries. This personal touch is lost in Ecommerce. Business is done with machines and computers that the customer is detached from everything else. However personal an online shopping site is designed, it still doesn’t live up to the service given by attendants. There’s no such thing as being treated well as a consumer by personalized customer service.

Who are you dealing with?

The disadvantages of ecommerce can also be experienced by companies engaging in it. Constant and religious updating of product information can be tedious and time-consuming. Doing business on a high scale also equates to high production cost, not to mention numerous phone calls and mailings necessary to keep the business up-to-date and maintain clientele.
some disadvantages and constraints of e-commerce include the following.
1. It is possible to visit a local music store and walk out with a compact disc or a bookstore and leave with a book. E-commerce is often used to buy goods that are not available locally from businesses all over the world, meaning that physical goods need to be delivered, which takes time and costs money.
2. Unable to Examine Products Personally: If we buy products through the internet, we are not able to examine the products physically and the quality of the product. Images of the products may be available for viewing. But we can’t buy the product by seeing the image on the internet. There is a risk involved in the quality of the product that the consumer is purchasing.
3. The biggest disadvantage of e-commerce is the issue of security. Even with the improvements with data encryption, there is still the danger of someone getting a hold of your personal and financial information. If someone gets your credit card, they can go to one of these sites and purchase items without proving who they are. All they need is your name and credit card number which is already printed on the card.
4. Reduced marketing/advertising expenses compete on equal footing with much bigger companies; easily compete on quality, price, and availability.
5. The Internet is an effective conduit for visual and auditory information: seeing pictures, hearing sounds and reading text. However it does not allow full scope for our senses: we can see pictures of the flowers, but not smell their fragrance; we can see pictures of a hammer, but not feel its weight or balance. Further, when we pick up and inspect something, we choose what we look at and how we look at it. This is not the case on the Internet. If we were looking at buying a car on the Internet, we would see the pictures the seller had chosen for us to see but not the things we might look for if we were able to see it in person. And, taking into account our other senses, we can't test the car to hear the sound of the engine as it changes gears or sense the smell and feel of the leather seats. There are many ways in which the Internet does not convey the richness of experiences of the world. This lack of sensory information means that people are often much more comfortable buying via the Internet generic goods - things that they have seen or experienced before and about which there is little ambiguity, rather than unique or complex things.
6. Normally, customer will only limit to certain area.
7. The company needs well-skilled and trained workers to maintain and create the ecommerce facilities of the company. Many companies prefer to outsource their development and programming tasks to decrease labor costs.
8. A company can have a website and exist within the Internet but there may not be enough people visiting the site and purchasing services or products from the company. The Internet provides less expensive advertising but also because of its sheer vastness and the existence of websites of established businesses, it is critical to create a website that is “sticky” enough to attract market share and create loyalty among the acquired market share.