Ecommerce - the reason why people sell online

Posted by Mords1944 on November 21st, 2020

For companies that produce goods or services, e-commerce through the creation of e-commerce sites is an opportunity to develop a new sales channel. This has already happened in the past thanks to the combination of technology opportunities and organizational solutions based on the availability of sales force and money.

This new electronic channel has two exclusive features compared to the previous channel:

a) It is global and can reach potential customers who are anywhere in the world.
b) It has relatively low development costs and is therefore also available to smaller companies.

E-commerce is global

Electronic commerce means that the company must start thinking in relation to the global trade policy. The prices of websites and promotional offers are visible on the internet for customers in each country.

If this kind of globalization becomes too scary, it is possible to fall back on sites dedicated to specific markets in local languages, but a skilled customer will notice any differences in the offers on the various websites online.

E-commerce sites are an option for SMEs

It should be emphasized that this new advertising channel has lower costs than existing ones, and in particular it is able to handle increasing amounts of contacts without the need to increase advertising space or staff.

The low cost investment required to develop this channel is a great opportunity for small to medium sized businesses to compete with larger ones. To enter the business market, you do not need to have suppliers, branches or stores, except what is strictly necessary to maintain physical contact with customers. The development of electronic e-commerce will remove protective barriers previously represented by geographical distance.

Ecommerce improves business intelligence

If the products are either digital or easily transportable (ie packages or parcels), it is almost irrelevant to buy them from your country or a remote retailer. In fact, these products can be easily shipped in real time via the network, in the case of digital products, or within a few hours via shipping companies in the case of physical products.

The separation of these barriers will emphasize the importance of business information and creativity in the promotion of their own products and services. Since we can easily buy English books on discounted international websites, why should we waste time sorting through a library locally where they cost more and will not be available until much later.

Ecommerce sites eliminate the distance between companies and markets

Many businesses through e-commerce sites can establish a direct channel with their end customers. It bypasses the traditional distribution chain and tries to grab some of the value of the product that was previously left to middlemen downstream.

Direct contact with end customers can significantly reduce the cost of product marketing. Some of the savings are retained by the company with obvious profit benefits, and other savings can be transferred to the market in terms of reducing the selling price.

Even with suppliers, electronic commerce can take place to bypass intermediaries and go directly to manufacturers (in this case, we are talking about e-procurement website). Even in this case, the benefits are obvious:

- The company would have more choices.
- They would probably pay less for components or raw materials.
- It would be possible to reduce the lead time for refilling by automating the relationship with the supplier.
- Reducing the delivery time will result in a reduction of the security stocks.
- The reduction in inventory could prevent the requirement to increase storage space and physical infrastructure.

E-commerce increases the quality of communication and service

One of the clearest benefits of an electronic channel, represented by e-commerce sites, is the ability of the company to get in touch with their end customers without an intermediary.

This means the ability to recognize and treat each customer individually in a personal way (mass customization). Many banking websites ask their customers to specify their needs or interests; for example, a customer may be interested in financing services, others in asset management services and so on. The result is a customer profile that produces a similar profile for the commercial offer: therefore, the website configures itself based on the interests the customer has declared and only shows offers that are presumed to be compatible with his needs.