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The electronic commerce has changed the business style drastically in the last few years. E-commerce is the way of online trading. The concept of business using e-commerce is significantly different from traditional business concept, theoretically and practically. The e-commerce development is perhaps the technology with highest commercial impact.
Theoretical difference in between e-commerce business and traditional business:
Any business is identified by its inputs and outputs. A business takes some input, adds some value to it, and generates the output. The value addition may be done by transformation of product or by addition of service. in traditional trading the inputs are raw materials or semi processed goods. Whereas, in e-commerce trading the inputs are basically the customer information or target market information. In traditional industry the output is finished product, in e- commerce trading the output is either service or information bundle coupled with physical product dispatching. In physical trading information doesn?t play a significant role, but processing is. In virtual trading information is the base of the whole system.
Practical difference between virtual e-commerce aided trading and conventional trading:
In case of virtual trading there exists no actual shop, all the shopping is done using the online product catalogue. This diminishes the establishment costs involved in the business. Along with the shop, the need of physical sales executives is also eliminated. The sites interactive nature is your guide and salesperson. This lessens the employee number and salary expenditure of the business. While doing online payment a part of the transacted money is deducted by the bank which is supporting your e-payment gateway. This money is taken as the processing cost. In case of physical stores there is no such deduction. All the money that you get from your sales goes to your account. During any dispute in between two nodes of the supply chain a physical business needs to bear the hassles of physical transport of product and need to compensate financially. As the supply chain of virtual trading is also mostly non-physical in nature and involves less handling of goods, it faces fewer hassles during disputes. In traditional trading the goods re handled many times. From the main production house it goes to different suppliers or retailers. From them it goes to smaller dealers and finally reaches the showrooms. Virtual trading involves less handling of goods. This lessens the risk of the product damage. The customer base of normal trading needs a huge time to develop. As it is based on goodwill and the publicity is less powerful. The e-commerce customer base depends on the effectiveness of the site mostly. The marketing and spread of market is faster here.
E-commerce is a powerful business tool. With the increasing popularity, e-commerce is perhaps the future of all business.
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