E-commerce - Trading of goods and services via the internet.
Global Reach - Unlike physical stores, e-commerce breaks geographical barriers, allowing businesses to sell their products to customers around the world
24/7 Accessibility - E-commerce is accessible at all times, and does not require employees on hand to monitor the store. The reduced costs of labour and convenience for customers to buy products whenever and wherever they would like will only help increase profits.
Access to Information - Customers can easily find out more information about a product or business online, and can compare similar products between competitors to make an informed choice of which to buy.
Consumer Reviews - Customers have been empowered by e-commerce, allowing them to post consumer reviews on the pages of the product within the e-commerce store. Marketers can use the feedback to gain an understanding of the public’s perception of the product, its weaknesses and strengths.
Barrier to Entry - Technology has significantly reduced the barriers to entry in the form of set-up costs of a physical location and staff.
Market Development - The global reach of e-commerce will remove geographical restrictions of business location to provide the business immediate access to international markets. The business will enjoy a larger potential customer base to increase sales revenue, potentially allowing the business to expand its operations and utilise economies of scale to lower unit costs of production and increase profitability.
Overhead Costs - Without geographical restrictions, businesses can benefit from having a centralised location for storage and distribution to customers within a large geographical scope. This reduces overhead costs associated with having multiple physical locations for retail and storage, increasing the net profit margin and profitability of the business.
Promotion Costs - Digital advertising is inexpensive compared to traditional above-the-line and below-the-line methods of promotion. Additionally, social media platforms and web browsers such as YouTube, Google, Instagram and Facebook, provide targeted ads that will be shared with a specified demographic or characteristic of users of the platform; the business can profit from a more effective promotional campaign aimed at only its target market segment.
Direct Channel of Distribution - E-commerce enables manufacturers to cut out intermediaries in their channels of distribution as customers from around the globe will be able to use the e-commerce platform to purchase the products directly from its manufacturer. This eliminates any profit sharing with intermediaries, allowing product prices to be lowered and gaining the business a pricing advantage over businesses with multiple layers in their channel of distribution.
Product Descriptions - Businesses can provide in-depth information about the product on its online stores, giving the business opportunities to emphasise differentiations that make their product better than competitors’.
Price Transparency - Customers will be able to compare prices of similar products between competitors easily on the internet. The price transparency will be a major advantage for businesses with good management who are able to cut costs so as to lower prices without sacrificing profitability.
Business to Business (B2B) - E-commerce catered for the needs of other businesses, such as corporate banking, suppliers of raw materials, and consultancy services. They offer raw materials, finished parts, services or consultation that other businesses need to operate, grow and profit.
Business to Consumer (B2C) - E-commerce directly catered for the consumer of the product. B2C businesses have direct channels of distribution where the product is sold to end-consumers without any intermediaries.
Consumer to Consumer (C2C) - E-commerce platform, such as eBay and Amazon, that provides customers opportunities to trade with each other. C2C websites earn revenue by charging a commission fee to sellers.