E - COMMERCE Flashcards
What is e-commerce
E-commerce refers to the buying and selling of goods and services, and/ or the transmission of funds or date, using electronic networks such as the internet
What are the advantages of E-commerce
Increased size of target market (i.e. new geographical markets)
Lower selling prices increase demand for price elastic goods
Collect data about customers for for better target marketing
24/ 7 shopfront
What are the costs of e-commerce
Lower barriers to entry (i.e. start up costs)
More efficient advertising spend
Access to more suppliers
Savings to be made on asset base (i.e. rent, wages etc)
Economies of scale reduce average costs
Lower waste due to increased flexibility (match supply to demand)
What businesses is evalution most suitable for
Retailers of products that are easily transportable of downloadable, such as books, music, films, and software
Lower value goods or products that are simple to work / use
Services that do not require the reciever to be physically in the same room in order to provide them - for example - financial services such as banking, insurance and accountancy, and travel srvices
What businesses is evalution less suitable for
Expensive consumer goods that customers want to inspect beforehand (i.e. cars)
Heavy, non-transportable products (ie. Petrol)
Services that need to be provided in person (haircuts, resturants etc)
Industrial products and processes that require large amounts of capital investment
