3.3.4 Making marketing decisions: Benefits of e-commerce to a business.

Question 1

Outline the benefits to e-commerce to a business.

Answer 1

Saves costs.

Saves time.

Facilitates customisation of products.

Inventory (Stock) levels can be reduced.

E-commerce improves cash flow.

Question 2

Outline how saving costs is a benefit of e-commerce.

Answer 2

Orders can be processed cheaper as there is no need for paperwork and records can be kept digitally.

Question 3

Outline how saving time is a benefit of e-commerce.

Answer 3

Quicker to process orders digitally - lack of paperwork and postage required.

Regular customers - database will already hold the necessary details so orders can be processed much more quickly - fewer administrative staff will be needed.

Question 4

Outline how facilitating customisation of products is a benefit of e-commerce.

Answer 4

Improved communication between suppliers and customers - customer orders can be met more quickly.
Reduced lead times - customers can specify exact requirements and the product can be made to match their needs.

Question 5

Outline how reducing inventory levels is a benefit of e-commerce.

Answer 5

Greater mass customisation and the ability to tailor-make specific products - no need to hold such high levels of inventory.

Details are sent immediately to supplier who makes the product to meet the specific requirements of the customer.

Question 6

Outline how improving cash flow is a benefit of e-commerce.

Answer 6

Reduced need to hold inventory - businesses don’t need to pay large sums of money to buy inventory, nor do they require such large storage areas in which to hold the inventories.

Question 7

Define E-commerce.

Answer 7

The buying and selling of goods and services through the use of electronic media.