What is e-commerce?
E-Commerce is the sale of products and services over the Internet. It is the fastest growing segment of our economy. It allows even the smallest business to reach a global audience with its product or message with minimal cost. The sale of products or services on your Web site can generate sales that will make the difference between success and failure. Even Walmart, the largest retailer in the world with one billion dollars sales per day, could not anticipate the increasing wave of Internet business.
- 180 million people in the US use the internet at least once per month.
- In 2005 there were approximately 1.08 billion people worldwide who used the internet at least once a month. This grew to 1.6 billion in 2010.
- The online population has hit 73% of all U.S. adults.
- The average income of Internet households is over $72,744, making the Internet user a very attractive customer for you to target.
Is an e-commerce Web site right for your business?
Probably. Much depends on the nature of your business. Web site such as Amazon.com and Barnes & Noble have established their hold over the book market, and their sheer size, name recognition and the relationship of trust they have with their customers allows them to dominate this market with good pricing (due to economies of scale) and remarkable customer loyalty.
Probably. Much depends on the nature of your business. Web site such as Amazon.com and Barnes & Noble have established their hold over the book market, and their sheer size, name recognition and the relationship of trust they have with their customers allows them to dominate this market with good pricing (due to economies of scale) and remarkable customer loyalty.
However, if you own a local bookstore,
there are several ways to reach new customers, get them to know you
better and have them keep coming back for more. You might want to offer
notices of special promotions or readings by authors. Trust will become
the cornerstone of building your e-business. As Warren Buffett has said,
"If you don't know jewelry, know your jeweler."
A Web site doesn't need to exist solely
to sell your product online. It could supplement the sales of your
already established retail store. If you sell a unique product, such as
wheat grass or gourmet chocolates, you might find success reaching
others around the country (or the world, for that matter) who do not
have access to these products in their own towns.
Using the Internet for conducting
e-commerce will not assure you of being able to compete favorably with
large established competitors. They already have the inventory, delivery
and marketing systems in place, and they can deliver the groceries as
cheap (or more cheaply) than you can. Yet, the beauty of the Internet is
that it provides a global audience of potential customers and it never
closes.
Your customers will have access to
information about your business 24 hours a day 365 days a year. You can
add pictures, audio, video, news, and so much more. Your customer will
even be able to buy from you 24 hours a day. So, your Web site address
should be promoted everywhere including your stationery, sales forms and
advertisements.
A website can transform a local business
into one engaged in global commerce. But you will need to be aware of
the advntages and disadvantages of international trade outlined in our session 11 in the Business Expansion course.
