The term e-commerce, short for electronic commerce, describes all trade on the Internet, including the purchase and sale of goods on the Internet.
E-commerce is often equated with the sale of products through one’s own online shop. But there is also the so-called marketplace model: If you as a founder do not want to deal with the complex technology of online shops, marketplaces such as eBay or Amazon can be a good alternative.
Numerous retailers offer their goods there and the platforms ensure that everything runs smoothly. Commercial dealers can enter their products into the tried and tested system and reach customers worldwide. On the other hand, online shop operators such as travelthatsfun.com must have to comply with some legal framework conditions when creating and running their shop. This serves in particular to preserve the data security of the customers.
Advantages of online trading for companies and customers
E-commerce, in particular online shopping, of course, offer both companies and customers numerous advantages:
- Speed: purchase processes can be carried out and processed without delay; the product arrives very quickly
- Customers can order around the clock and are not tied to retail opening times
- Convenience: Customers can leaf through online catalogs from home, browse shops, choose the product they want and pay for it
- Overcoming spatial distances
- Many e-shops offer a 24-hour service; generally quick response time for problems and inquiries
- A better comparison of price and product
- Customer needs are met optimally; there is high customer satisfaction
- High efficiency: online shopping not only accelerates the sales process, but also minimizes personnel costs
- Transaction costs are low: shop systems, inventory and checkout automatically monitor inventory and cash flow; the establishment of branches may become superfluous
Disadvantages of e-commerce
- Complex implementation
- Advertising effort and costs
- Payment and data security are complex to implement
- High competition and price pressure
- No personal customer contact, lack of personal advice
- Shop dying
Is e-commerce suitable for your idea?
Whether as a supplement to brick-and-mortar retail or as a travel industry business: e-commerce offers founders many opportunities. Even though online trading also has some disadvantages, the advantages that you can gain from opening an online shop outweigh the disadvantages.