4. Digital Trading ✅

Question 1

What is Digital Trading?

Answer 1

Digital trading refers to ordering, buying, selling and paying for products and services using the internet. Marketing of goods and services over the Internet.

This can be with:
– customers
– other businesses

Question 2

What are the advantages of digital trading for a business? (x7)

Answer 2

 An effective website will give the business a professional image.

 Provides access to a global market.

 Increased sales due to a larger market and the fact that people can trade digitally 24/7/365.

 Website information can be updated
quicker than business documents, such
as catalogues.

 Digital trading could lead to lower costs
for the business.

 Cost effective way of promoting the
business to many customers, through
search engine listings.

 Some businesses will not need a high
street location or expensive showrooms; this is a major cost saving.

Question 3

What are the disadvantages of digital trading for a business? (x7)

Answer 3

Costs associated with the design,
maintenance and updating of the website.

 New staff with expertise in this area may
need to be appointed or existing staff
retrained – all of which adds to costs.

 Technical difficulties can lead to a poor
corporate image.

 Security concerns can be a problem,
especially when dealing with people’s
money or personal details.

 Costs will be incurred through the delivery of goods to customers.

 Adds additional legal and security issues.

 Increase the level of competition faced by the business.

Question 4

What are the advantages of digital trading for a customer? (x5)

Answer 4

 Can shop from the comfort of their own
homes.

 Can shop at a time convenient to them
– 24/7/365.

 Have their products delivered without
the inconvenience of visiting a shop.

 Can access important information, e.g.
price comparison, online reviews.

 May benefit from lower prices due to
reduced costs placed on the business.

Question 5

What are the disadvantages of digital trading for a customer? (x9)

Answer 5

Details on website may be inaccurate, e.g. stock levels/contact details.

 Not all customers may have access to a computer or the Internet, or indeed have the necessary skills to navigate it.

 Orders placed can be difficult to change if the customer makes an error while ordering.

 There is the possibility of being defrauded if the website is not secure.

 On secure websites credit card or personal details could be intercepted.

 There will be a time delay between ordering the item and the delivery of it, this can also be expensive.

 Reliance on technology functioning
properly.

 Loss of social interaction.

 Products may appear different on the
website, meaning goods will have to be
returned and postage costs paid.