E-Commerce

Today the world is a buzz with the number of Internet business that crop up each week offering products or services for sale. Many have asked what are the pros and cons of such a venture; especially without having a physical storefront presence. Well as with most questions it certainly depends on the business and the model. For example attempting to operate a full service restaurant that depended solely on menu items to the paying clients could present quite a challenge.

However utilizing e-commerce to augment a food service business can improve a business; Dominos, Papa Johns, NutriSystems, Food Delivery Services, and full service restaurants that provide online ordering for pick up orders such as the Outback Steakhouse Chain.

When we think of a stand alone e-commerce business offering a tangible product a variety of advantages come to mind. The first being, less overhead connected to the operation, staffing, and upkeep of not having a store front location. Second is by using a credit card feature on the website being paid immediately for each transaction before the customers receive your products.

Depending on what type of arrangement you are able to work out with your suppliers it may even be possible to operate with little or no inventory. This way after you receive an order you place an order with your supplier who then drop ships the order to the client from the supplier’s location suing your branded packaging. This business model is quite common with e-commerce sites.

Another advantage is your ability to have a global presence at very economical costs. My personal experience in setting up an EBay store was 74% of my clients were from outside the United States. I confess that this was not in my plan but it created no particular difficulties.

Also many e commerce sites also are able to squeeze a bit of profit out of the shipping costs; which adds additional revenue. An online store can offer a much larger selection of products without having the inventory in place; all they need is a photo. Tracking customer types, locations, purchases, history can be built in to the software system used for placing orders. Finally an Internet store never closes because the transactions are automated; so one does not need an employee to handle the sale.

Of course nothing is perfect and some disadvantages do exist the first is security; with all of the fraud that has occur over the Internet business must insure the safety of their customers information and communicate that to them.

This brings up another disadvantage in terms of technological advances; new and improved software and systems are developed almost daily. A business must be prepared to be constantly reviewing the opportunities to upgrade to the more improved products.

This does dovetail into a third fact in that ii is true one does not need to be a computer and software expert to develop an e commerce business. It will however be important to have a staff member of a supplier that is knowledgeable in such areas along with search engine and e marketing applications. Sometimes returns can be a difficult process for a customer to deal with online since the product must be shipped back received credited all of which is much easier at a brick and motor storefront.

Yet not everyone has access to the Internet and some are intimidated by it. Also some business develop a model solely on reaching and expanding within their local region or community so they may feel an online store is not important for their business model.

What most do seem to agree on is that having some sort of Internet presence in business today is important.