Internet services are the current mode of communication. This is a result of technological advancement. Technology changes have greatly advanced every aspect of humankind. Concerning this, the business world has not been left behind. They too have assimilated these changes in technology. People once used barter trade as a form of trade, and later they introduced currencies that enhanced and simplified trade. This has even gone further to the introduction of online trade known as electronic commerce which has made things even simpler. This clearly shows that internet and communication services have been advanced in a major way enabling easy trade around the globe thanks to the introduction of computers.
Ward (2000) defines e-commerce as the vending of goods or services online. She further states a specific definition of e-commerce as the execution of financial transactions electronically. E-commerce in simple terms is trade by the use of the internet. In e-commerce, every step of the whole happens over the internet.
E-commerce is classified into different categories to suit different classes of buyers and sellers. Sial (2009) explains five different types of e-commerce. The first is Business to Consumer denoted as (B2C). As the name proposes, it is a type of business that happens between the business and the consumer over the net. There is a direct link between the manufacturer and the consumers of his products. An example is a biscuit company selling its products to a certain family over the internet.
Business to Business denoted by B2B is the second type of e-commerce. This type of e-commerce involves selling products and services between businesses. In this business form, an individual consumer is not engaged. A good example is where a wholesaler sells a product online and since the wholesaler does not manufacture the product, it therefore first purchases the product from a manufacturer before trading it through the internet.
- The third type is Consumer to Consumer (C2C). As the name suggests it enables exchange of goods and services between two individuals.
- The fourth type is peer to peer (P2P). It helps people to distribute computer resources without going through a central server. This requires the parties to mount the essential software so that they can converse on the same level.
- The last type is the m-Commerce type. This enables transaction to be conducted by use of mobile gadgets. Business can be carried out easily by the use by the use of cell phone (Sial, 2009).
- The first and the second type that is B2C and B2C respectively are the most commonly used types of e-commerce as they attract more profit to the business owners. The third, fourth and the fifth types are as well used but not with utmost importance as the level of profit attraction is very low.
Every thing in this world has its own benefits and limitations and e-commerce is not exceptional. There are many advantages of e-commerce. According to Laudon and Traver (2004) e-commerce has enabled businesses to be conducted any time of the day, week or the year. In this method traders do not require to open their stores and wait for customers to come and buy their products, instead they trade their products globally online at the comfort of their office or sometimes at their home. E-commerce has enabled buying and selling of anything in the world as long as there is internet connectivity. The best thing about it is that one is able to transact globally without being charged for the distance they are communicating (Laudon & Traver, 2009).
Coe (2003) points out that the communication setback is not a threat to in e-commerce. The messages relayed across the world are received immediately; thus consumers do not have to wait for weeks before they receive quotations.
Coe (2003) further states that the market space in e-commerce is enormous. In e-commerce traders’ consumers and suppliers are in the global market who also are trading with the rest of the world.This makes it easier for the traders to be able to look for other suppliers that are selling the same products at a better price. Consequently, traders are able to locate potential markets for their products.
Other advantages of e-commerce include customer outsourcing, and reduction of costs, among others.
Some of the short coming of e-commerce include; the time taken to deliver the physical goods. The time taken to deliver these goods may be long and the process may also become expensive as e-commerce is more involved in getting goods which are not locally available (Coe, 2003, p.45).
The second is the ambiguity of the physical goods supply and delivery. In this type of trading, the consumers are sometimes not certain of the conditions of the products they are purchasing. For instance if a consumer receives a damaged commodity they rarely get an opportunity to complain and get a replacement (Coe, 2003).
E-commerce is suitable only certain products which are to durable.This is because where perishable goods are involved there is uncertainty of whether the commodity will survive the trip and arrive in good safely despite the presence of highly specialized equipments (Laudon &Traver, 2009,p.23).
Returning goods online can be a hard task to the recipient. Extra costs are involved and one is not sure as to whether they will reach their destination or the refund of money will be done. This is centrally to the other means of trading where in case of such occurrences replacement or refund is done conveniently.(Laudon & Traver, 2009).
Services and products that are commonly known are best suited for e-commerce. Those that are new and unexpected are really hard to transact through e-commerce (Coe, 2003).
E-commerce does not provide face to face communication and this majorly affects business performance. E-commerce gives information via the websites and this limits the personal interactions. With this a business will never get the feedback of how people react towards their services and products. The information they might get is very minimal which make them unable to re-strategize their marketing and business plans.
Payment of goods and services in e-commerce is done electronically. Thus with e-commerce the chances of hacking of credit cards of the consumers and being used for illegal purchases is high.
The limitations and benefits of e-commerce keep re emerging every so often, beyond those explored by this research paper. For one to reap the benefits of e-commerce, certain legalities must be looked into. In this current era, people are becoming lazy and looking for short cuts to do things and they even forget the legal technicalities surrounding their businesses.
In customary commerce, it was really hard to start a business. A potential businessman had to set up his business in accordance to the rules and regulations laid down by the government. This helped a lot to reduce fraud, copyrights were protected and customers’ privacy and security was guaranteed. This is not what is really happening today and it is as a result of existence of legal and implementation frameworks which are not strong enough (Nasir, 2004). The following are some of the recommendations to improve on the faults of e-commerce.
Some states have persuaded the use of e-commerce through validation. Countries like Australia have passed many acts to tenacity the legal issues and make e-commerce legitimate. They have passed an Electronic Transaction Act (ETA) which helps in contractual dealings to be done electronically and this act has also enabled people to use electronic signatures to gratify any legal obligation (Nasir, 2004).
Privacy and security of the customer in e-commerce is not highly guaranteed currently. The information provided by the customer passes many hands and therefore the security to be offered is minimal. Therefore the businesses should device ways of dealing with this. Nasir (2004) suggest that businesses should integrate measures so as edge the access of customers’ information by illegitimate parties.
Currently governments are setting up a strong legal framework to enhance protection towards many businesses. The aim is to control the use and exposure of personal information by the businesses. Privacy legislation is premeditated to protect customers’ personal information (Nasir, 2004).
Nasir (2004) say that legislation over e-commerce is a dilemma to many even to date. Many questions arise when a transaction has been initiated. For example, if one buys a chair in the local store and finds some defaults with it, he can easily return it and if the store attendants are unwilling to sort the issue then he can further sue them. This is not the scenario in the e-commerce world where the goods involve a person in another country and even more badly an intermediary in a third country. Thus, ones rights are reduced and the question remains as which country one will seek legal protection over the matter.
To conclude, we can thank the inventors of the modern technology of e-commerce. This has made the world become a better place. One can easily purchase goods and services offered in a far off country. Therefore this can be viewed as trade in the world being brought at your doorstep. Gone are the days where you had to carry goods with you and go looking for someone who has what you need and he wants what you have. This type of business had a lot of barriers because it was difficult to find such a person. As they say and inventors do not get satisfied with what they find, they keep researching and inventing even if what they have currently is a great success. Do you agree? Then wait for more advanced for of trading.
Coe, J. (2003). The fundamentals of Business-to-business sales & Marketing, McGraw Hill: New York.
Laudon, K.C. & Traver, C.G. (2004). E-Commerce: Business, Technology, society. (2nd Ed.): Boston.
Nasir, A. M. (2004). Ubiquity: Legal issues involved in e-commerce. Vol. 4. Web.
Sial, S. (2009). Types of E-Commerce.
Ward, S. (2000). Ecommerce.