Electronic business has become a growing
platform new entrepreneurs use to start a new business, but just like every
other aspect of life there are always disadvantages. Most of our class is going
to use this forum as an opportunity to show the positive sides to electronic
business and the different aspects of it. I thought that it would be useful to
also understand what the difficulties and problems with starting a business on
a strictly electronic basis. Knowing both sides of about a topic, allows your
knowledge of that topic to grow.
One thing that might cause owners to
be hesitant when looking into starting an electronic business is that there is
security issues it could cause. Security issues are raised in multiple areas of
the business. First issues electronics could cause can seriously jeopardize the
business data integrity. Viruses could shut down a business network or cause
data to be disorganized and out of date. Also the Internet is a open source of
valuable information, that can be accessed pretty easily by an outside source
with the knowledge of how to hack into systems. “Viruses cause unnecessary delays, file
backups, storage problems, and other similar difficulties. The danger of
hackers accessing files and corrupting accounts adds more stress to an already
complex operation.”[1] Hackers can also wreck havoc with customers of the
business that is only operable electronically. Most e-business relies on
collection of payment through credit card information. Once a customer
purchases a product and inputs their different information, the company’s
database will most likely store their information for later use. “There
are tools or options available to hackers whereby they can not only monitor but
also control any data communicated over the internet.”[2]
With the information in an accessible place,
hackers can get in and steal the indentity of the company’s customers. Problems
in this area are could mean the difference between the success and failure of
the company. If a reputation of a company becomes known that their data and
customer information are unsecured and liable to being hacked, the business has
a slim chance of ever seeing any success unless they are able to fix the
problem and prove it to the consumer.
Another
disadvantage is the total disconnect that the consumer has from any kind of
customer service, making it extremely difficult to establish oneself as a
reliable business. “The
faceless nature of an e-business causes an issue of trust, which remains hard
to resolve.”[3] Without being in physical proximity
to the merchandise, electronic businesses face an unique problem that normal
businesses would not. Being able to hold the product of purchase prior to
making the decision to buy is a key element that e-businesses must overcome. A
customer must trust that the products they see and are purchasing online will
be the same product that they receive at their door and they must trust the
quality of the advertised product. Also there is no customer support like one
would receive in a retail store. For example, if it were a sporting goods
electron business, and a customer was interested in purchasing a new set of
golf clubs. Normally one would want to swing the clubs and maybe hit a few
balls, which in the store would be no problem. This cannot happen online. Also
they would be able to hear the differences, similarities, positives, and
negatives of different brands and clubs alike from a sales rep who has
knowledge of the products. Online on must rely strictly on the descriptions of
the products to make their details.
E-businesses
also must contend with the challenge of first bringing customers to their
website, and following a purchase must find a way to make their website
likeable enough to generate return customers, and build a client base. For
companies that just start both online and not, their only way to get their name
out there is advertising, but what makes e-commerce unique is there is no
storefront that will do advertising for itself. Their building is their
website, and they must make it appealing not only to bring in customers but
keep them as well. Timing is also an issue. Consumers are used to seeing an
item, purchasing it, and taking it home right away. This is obviously
impossible for online business. This disconnect is one of the main troubles
that e-businesses will face in order for their company to grow. First the order
must be processed, then properly shipped which all takes time, taking away from
customer satisfaction. “If you sell physical goods, shipping it halfway round the world
might take several days, weeks or even more.”[4] A lot of smaller
businesses only option is to outsource their shipping, only handcuffing the
company even more. It is a major disadvantage to have the growth and success of
a electronic business company to be in the hands of a third party shipping
department, whose interest in the business is the same as the owners. It is imperative that for these companies
their shipping departments at top of the line and do not make mistakes, because
it will only make them lose customers. “Only
those e-businesses that can ensure delivery of the product to the customer in a
timely and safe manner can survive.”[5]
Electronic
business markets are only going to grow larger and larger as technology
advances, and more and more young people will choose this as an option rather
than open a non e-commerce style business. It is the future on how businesses
will be operated. Being fairly new to the world means that their will obviously
be issues. I thought it would be a good idea to make some of these
disadvantages known, to show that with all the good there is still some bad.
But there is a bright future ahead. By being able to pinpoint the sources of
issues now, allows us to see what is flawed and make a conscious effort to fix
what need fixing, to make electronic business into the best, most secure,
consumer friendly, and timely way of business. But to conclude, this post
touches on a few of the disadvantages someone may face when starting an online business.
[1] http://www.manjeetss.com/articles/advantagesdisadvantagesecommerce.html
[2] http://www.zeepedia.com/read.php?e-business_disadvantages_of_e-business_e-commerce&b=10&c=29
[3] http://www.brighthub.com/office/entrepreneurs/articles/66427.aspx
[4] http://tokokoo.com/2010/07/advantages-and-disadvantages-of-e-commerce/
[5] http://www.brighthub.com/office/entrepreneurs/articles/66427.aspx
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