Question

Online sales are popular among consumers. Discuss the advantages of e‐commerce systems. What are the risks to companies who use e‐commerce? What controls are needed to prevent these risks? Why should a company continuously monitor the capacity of its e‐commerce system?

Explain your ideas in your initial post.

Answer 1

E-commerce refers to commercial transactions conducted electronically on the Internet. Online sale, which is a part of e-commerce, are very popular among consumers.

ADVANTAGES:

1. Cost Efficient: Carrying out e-commerce transactions are very much cost efficient, as there is no requirement of a physical place for interaction of buyers and sellers.

2. Rapid: Transactions can take place at a rapid pace due to the advancement of technology.

3. Less Labour: Requirement of labour is very less. A few skilled labours can fullfill the requirements of the system. This has helped the economies who are facing labour shortages.

4. Wide coverage: E-commerce can cover a wider geographical in a cost effective way.

Risks to companies who use e‐commerce:

1. Data Theft: Customer data is the main driving force in case of a online sales. Marketers target customers using data, which is of much importance now. Thus, companies using ecommerce are exposed to this greater risk. A data leak may even become a threat to it's existence.

2. Trust Builing: With transformation of sales from physical form to online form, the physical presence have ended, thus it became difficult to have a relationship of trust and confidence.

3. No Personal Touch: There are kind of goods which people prefer to buy only if they get a personal touch of it, so as to make sure, it is the one they require. Examples of such goods are clothes, shoes, etc. Thus, companies engaged in such business find it difficult to move to this form.

Controls are to prevent these risks:

The business houses should set up a good and efficient control system to prevent such risks. These e commerce companies should carry out rapid innovation so as to sustain in the market and eliminate all the difficulties.

A good control should be exercised over Data so as to prevent data theft.

The companies should try their best to resolve the complaints of the customers in best and efficient manner possible, so that a relationship of trust can be created.

They should carry out innovations, which will try best to give a personal touch to goods requiring so. For example, they a provide free return policy.

Why should a company continuously monitor the capacity of its e‐commerce system?

Technology is changing at a rapid pace. This is the most fastest growing thing in the world at present. If a company doesnot continously monitor the capacity, it may soon face a crisis, which in turn will thow them out of the business at once. Thus, it is in the best interest of the company, that the capacity should be continously monitored.