E-commerce is conducted using a variety of applications, such as email, fax, online catalogs and shopping carts, Electronic Data Interchange (EDI), File Transfer Protocol, and Web services. Most of this is business-to-business, with some companies attempting to use email and fax for unsolicited ads (usually viewed as spam) to consumers and other business prospects, as well as to send out e-newsletters to subscribers.
The benefits of e-commerce include its around-the-clock availability, the speed of access, a wider selection of goods and services, accessibility, and international reach. Its perceived downsides include sometimes-limited customer service, not being able to see or touch a product prior to purchase, and the necessitated wait time for product shipping.
To ensure the security, privacy and effectiveness of e-commerce, businesses should authenticate business transactions, control access to resources such as webpages for registered or selected users, encrypt communications and implement security technologies such as the Secure Sockets Layer.
Advantages of Using an e-commerce system
There are just too many advantages for integrating an e-commerce system. Below are the main ones :
- Increase in sales
According to reliable statistics, there has been a tremendous increase in online sales over the last couple of years. It is estimated that the revenue of a business that incorporates an e-commerce platform can increase by up to 250%. This is attributed to the fact that most people prefer the ease of access and convenience that comes with e-commerce platforms. This is especially true for those systems that are able to process credit card payments together with payments from top online processors like PayPal. Click here for more tips on how to make more sales online.
- Increase in Customers
It is clear that e-commerce brings in a lot of convenience in terms of payments. This therefore automatically invites more customers and also impulse buyers. The fact that the online payment system may accept different modes of payments makes it easier for the small business to get customers of diverse backgrounds.
- Ability to be open 24/7
Many businesses that do not use e-commerce may find it difficult to be open 24/7 due to the multiple overheads that come with it in terms of staff and utility payments. On the other hand, e-commerce makes it possible for a business to be open and easily accessible round the clock without any increase in overheads. Transactions and payments can continue being made automatically, without your supervision. In case the small business deals in digital goods, the business becomes totally automatic full transactions, including purchase and delivery, will automatically be carried out online.
- Instant processing of transactions
E-commerce enables businesses to transact instantly. This takes away the hassles that come with other modes of payment that may require the merchant to wait up to 30 days (sometimes more) to access their payments. E-commerce transactions clear in seconds and merchants can either receive funds immediately or wait for only 2 or 3 days to get the cash in their bank accounts.
- Increased business reach
A business operating purely offline may have challenges in reaching a wide scope of customers. On the other hand e-commerce has enabled local small businesses to reach international masses. There are no limits to where the internet can reach, therefore through e-commerce platforms, people can pay for goods and services from literally any corner of the world.
- Ease of collecting recurring payments
In case you run a service that requires recurring billing, it is easy to do so with an e-commerce platform. You can create your system in such a way that when a customer makes a purchase, they can opt for their card to be re-billed at a certain frequency. This makes it hassle-free for both you and your customer. As long as they continue using your service, their credit or debit cards will get charged at certain intervals, increasing the predictability of income and eventually the bottom line of a business.