P2 - Impact of E-Commerce

Advantages

24/7 Opening- Because an E-Commerce business is all online it can be open all the time. This is because they don’t constantly need people working to sell the products and maintain the website. This is an advantage to a chocolate company because then the company can have more time to make money. Compared to a shop, websites don’t have business hours. So, overall it is an advantage to the company as they make more money than what they would if they were just a normal high-street store.

Global business opportunities-This is an advantage to a chocolate company because it widens the range of people that they can sell things too. They aren’t confined to one section of a country. This again will make them more money as they can have more people accessing the website and then buying their products. With the company going global this also may mean that other companies that are interested in what they are selling can show their interest and maybe take shares out in the company which will make it expand and again, bring in more money.

Starting up and running costs are low- The reason starting up costs are so low is because all the business would have to pay for is the domain name and also pay for someone that can help with the design of the website. After that they don’t really have to pay for anything else, where as a shop would have to pay massive amounts of rent and massive amounts of money for other things. Another reason why the running costs are low is because the company won’t have to pay labour costs to their employees because a business on the internet can be run by one or two people. Again this helps with the amount of income and the amount of profit they are making.  So this is an advantage to a chocolate company because it increases profit and also prevents massive amounts of loss in profit.

Ease of access by customers- Most people in the world now will have a computer with internet connection. This makes it a lot more convenient for people to access a website and buy what they need rather than going to the shop and getting it. If it is easy to access the website it will make the customers want to keep coming back and buying things of the company therefore again making the business more money. So the advantage for a chocolate company because it’s  for customers to access is that it will make the company more and more money.

Increased Income- This is a big advantage to a company because this is what every company will aim for. The whole point of a company being a company is to earn money and increase the amount of money they make per year. This is an advantage because the more money you make the better. All the advantages above help the chocolate company increase income because they make the whole process of shopping online easier and more convenient.

Disadvantages

Customers aren’t able to see the products­-All the customers are able to see a picture of the products but they sometimes might not be the exact same as the actual product. Also if there aren’t any sizes put on the webpage then the customer won’t be able to see the size of the product just by looking at the picture. This is a disadvantage to a chocolate company because the customer may be fussy on like the type of chocolate there getting and the quality and they also wouldn’t know what size the bar is, so this might make people think twice about buying it.

Delivery Costs- As well as paying for the actual product people that buy online have to pay the postage and packaging and the delivery costs. Therefore this is a disadvantage as they have to pay a bit more for them to be able to actually get the product. Unlike when you go to the shop you only have to pay for the actual product. This would be a disadvantage to a chocolate company because people won’t want to buy the product if there is a high delivery cost therefore reducing how much money the company would make.

Customers are unsure whether to trust the business- Because on a website a lot of people can’t tell whether or not they trust a business then they just have to go with what they think is best. This is a disadvantage to a chocolate company because if their website doesn’t look trust-worthy enough then people won’t want to purchase anything from the business therefore it will lower the income that the business usually receives.

Security-There are big security risks with buying products off a website, people don’t like doing it because they feel like someone will be able to get their bank details and hack their bank accounts taking all their money. This means companies most of the time use PayPal to ensure people that the payments they make will be safe. This is a disadvantage to a chocolate company because if people don’t think the website is secure then again they won’t buy from the company losing the company money. 

Lack of personal attention- People don’t spend as much time paying attention to buying things online because they think everything’s there for you. This means they might make a mistake and it is a disadvantage to the chocolate company because they might lose their money and also the company could be blamed for fraud which then gives the company a bad reputation.