Advantages and Disadvantages for E-Commerce Business


A business model which allows companies and individuals to buy and sell goods and services over the internet is called electronic commerce.

One can buy goods with the help of a computer, tablet, smartphone, and other smart devices.

Users can buy all the things right from books to groceries, music, book tickets online, etc. through e-commerce today. With the 2020 pandemic things have changed and people even fear moving out of the comfort of their home and stepping out to a nearby local store to buy groceries.

With the advent of e-commerce sites, things have changed. E-commerce websites can deliver anything, anywhere. While sitting on your sofa one can order delicious food with the comfort of being home! Just order and it will be delivered.

There are various types of E-Commerce

Business to Business (B2B)

When products or services are exchanged between business to business rather than business to consumer it is B2B E-Commerce.

Business to Consumer  (B2C)

It is the standard business, the retail part of e-commerce on the internet.

Consumer to Consumer  (C2C)

When consumers trade products or services with each other online it is C2C E-Commerce.

Consumer to Business  (C2B)

When consumers make their products or services available online for companies to bid on and purchase it is known as C2B E-Commerce.

Business to Administration  (B2A)

When a transaction is conducted online between companies and public administration or government bodies it is B2A E-Commerce.

Consumer to Administration (C2A)

When the transaction is conducted online between individual consumers and public administration or government bodies it is C2A E-Commerce. The Government barely purchases products or services from citizens but individuals often use electronic means in areas like education, social security, to pay taxes and for health, etc.

With e-commerce gaining popularity let us now dig deeper to know what are the advantages and disadvantages of e-commerce.

Advantages of e-commerce

  • Ease of doing business
  • Efficient pricing
  • Easy Payments
  • Reach of business/ No geographical limitation
  • Supply chain management is efficient
  • Customized products
  • Low operational cost

Ease of doing business

For a local store to survive, he has to open shop at 8 in the morning and close at 10 or 11 pm. Long hours, right? In the case of e-commerce sites, there is no need to wake up early and open a shop, one just gets the order that the customer has posted and needs to be delivered.

The user can buy things sitting in the comfort of their homes. In short, the user can do anytime and anywhere transaction buy a product online and pay online or has an option of paying when the goods are delivered

Efficient pricing

80% of online shoppers compare prices online before shopping in stores. Customers are experts in comparing prices online and offline. So if I want a product then I can visit two different sites and choose an e-commerce site that offers the product at less price.

Easy Payments

Nowadays the consumer is spoilt for choices while selecting payment options for groceries and other necessities. The customer can pay through cash, card, or other mobile payment (Apple Pay, GPay, MobiKwik, etc) options.

Cash is one of the most ancient payment options used, so it is important for sellers to set up your own payments online. Local stores, supermarkets, and e-commerce websites are now turning to set their payments online.

Setting online payment is an easy and relevant option for sellers as this will lead consumers to easily make a purchase or pay invoices online or through any device at any time.

With in-house online payment, method control is in your hands, flexible and you can make your gateway product customizable. This can lead to increased responsibility for the supplier as maintenance, support, and integration rise. Online payment can also be given to a third party but here cost factor is to be taken into consideration.

Reach of business

Brick and mortar has a limited scope and can sell to consumers who can physically visit and are located nearby while e-commerce has a vast expanse.  Customers can browse through category pages and find products immediately

Customized product

E-commerce sites are smart and can track daily consumer behavior, their likings, and preference. The next time you visit a particular site you have visited before it is likely that it shows your previously browsed product or item in its list. E-commerce websites use this data to present useful and important recommendations and customized products to the end-user.

Low costs

E-commerce does not have to worry about some of the major operational costs that the local store has to incur daily like rent, inventory, cashiers, etc.

Disadvantages of e-commerce

  • Depersonalise shopping experience
  • Lack of trust/ Security concerns
  • Fulfilment problems
  • Electronic data interchange
  1. Depersonalise shopping experience

Women shop for the experience, the feel of the good/material cannot be availed through online websites. In some cases, the actual product might differ from the shown image. The satisfaction of feel and touch that can be gained in stores is never attained in online e-commerce sites

  1. Lack of trust

Consumers sometimes use sensitive information while making online payments like bank information, card details, etc. If this crucial data lands in the wrong hands then problems arise. So customers only prefer to shop at trusted sites.

  1. Fulfilment problems

Consumers need to wait for a long period to get their goods delivered. In a local store, one can get products on the spot.

  1. Limited customer service

If a user has an issue or has to report a problem then a long procedure is to be followed. There are limited hours where one can file a complaint.

E-commerce is the future of shopping. The Indian market is estimated to exceed the US to be the second largest e-commerce market in the world by 2034 and is poised to reach $91 Billion by the year 2023.