Advantages & Disadvantages of E-Business
So now you know – we all know – how our ancestors probably felt when someone tried to pry away the reins of their horse in exchange for a car key: What is this motorized contraption and why would I trust it when my horse has always been so reliable? The same might be said for the internet and the decision that many small-business owners face as they consider becoming an e-business, or at least adding an e-business component to their offerings.
There are advantages to e-business, as long as you're willing to capitalize on them. And there are disadvantages, which you can counteract if you're determined. If it sounds to you like the Industrial Revolution all over again, you're right. In fact, it's why we're galloping through the Fourth Industrial Revolution – and you're holding the reins.
E-Business Is More Expansive
As you acclimate yourself to this revolution, it's probably not helping your learning curve that people use the terms “e-business” and “e-commerce” interchangeably, as if they were the same thing. They really shouldn't – because they're not.
You could say there is a whisker of difference between the two: E-business – short for electronic business – involves anything and everything about conducting business on the internet: creating a website, helping visitors navigate it, showcasing products and services and any other tactic that successfully converts a visitor into a customer. It also includes the actual buying and selling of products and services.
E-Commerce Involves Sales
This helps explain why when people say “e-business,” they usually mean “e-commerce,” which refers only to monetary transactions. In this way, the terms share the same identity crisis as “marketing” and “sales” – with “marketing” being the more encompassing term that refers to strategy and potentially dozens of activities while “sales” involves selling only.
Clearly, e-business is a more complex and far-reaching proposition – or it can be, depending on the goals for your small business. It could prompt you to assign resources covering finance, human resources, information technology, inventory management, marketing, product development, production and risk management. If it feels as though you're starting another business – or starting your business all over again – you have plenty of company among entrepreneurs who want to make the leap into the latest revolution.
E-Business Can Foster Growth
Like many of your peers, the notion of leveling the playing field with your bigger and possibly better funded competitors could be the primary reason e-business looks so good to you. After all, as long as you create – and continually update – a website, who will really be able to tell who's who, who has more employees and who has the nicer office space? Websites have an exquisite way of leveling the playing field among businesses, which is why it behooves you not to cut a single corner in creating or updating yours.
Promote Goods or Services to a Huge Audience
Just because we don't regularly refer to it as the “World Wide Web” anymore doesn't mean that the internet has lost its global appeal. Far from it. The web has broken down geographical barriers even more than the automobile. It's more like a private jet – with you as the pilot. In other words, if you're a consultant, you don't have to crisscross the globe to see clients; you can limit your travels domestically. And you don't have to ship products internationally, either, which can be expensive. With e-business presenting a world of opportunity, you can chart your own course.
Reach Potential Customers 24/7
And if your customers happen to be located across the globe, in different time zones, so much the better. Your reach has just expanded exponentially. This round-the-clock availability may offer another benefit, especially if you're feeling a bit run down by the long hours it takes to run a successful business: Many entrepreneurs report that an e-business component provides a level of security and comfort that allows them to cut back on their hours. Once an e-business is set up properly, it really can run on “automatic pilot.”
Get to Know Your Customers Better
It's called inbound marketing, and it's revolutionized the way websites perform. That is, instead of waiting to be found amid 1 billion other websites floating around the World Wide Web, inbound marketing captures your ideal customers for you, mostly by providing the content and information they say they want most. There is an entire methodology to inbound marketing, and while it's not difficult to learn, it takes a concerted effort to do it right. But it's worth mastering because it can give you a treasure trove of information about each and every customer that, in another era, would have been elusive or cost prohibitive.
Retarget Customers
Without making a virtual pest of yourself, e-business allows you to “knock on the doors” of your previous website visitors to offer them discounts, bargains and other incentives on products or services they've already expressed interest in. Just don't take “no” as a slammed door, or at least not an angry one. Market research shows that consumers don't mind being solicited with a good deal; in fact, they usually appreciate the opportunity, as long as the efforts don't border on harassment.
E-Business Presents Challenges
Just as your ancestors needed time to transition to the technology of a vehicle, your business will need time to adapt to an electronic presence. With time, effort and the proper investment, e-business can provide a smoother ride if you can overcome:
- Site crashes that can cripple your enterprise. The right hosting platform and tech team can restore your website and your confidence.* The threat of obscurity – no small thing considering how competitive the web has become. The key, again, is investing in inbound marketing, of which search engine optimization also plays a key role to ensure you are “found” in the online universe.
Consider Three More Challenges
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The tactile advantages that brick-and-mortar businesses enjoy, if your e-business includes e-commerce. Customers may grouse about not being able to touch, try on and do side-by-side comparisons of products they purchase online, but research also shows that they're willing to spend more time reading online. Translation: detailed product descriptions, lots of pictures and product reviews are vital.
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The notorious impatience of online visitors. They've made no secret that they will ditch a website that doesn't load in mere seconds. And if a website doesn't conform well to a smartphone, they'll probably move on to the next business in line. Customers are fickle, so having a fast, furious and highly functioning website is a necessity.
- The urge to completely forsake your current business model. It may seem like “everyone” is hawking their products and services online. And there is no doubt that online sales continue to explode, with sales projections at $613 billion by 2020 and more than $735 billion in 2023. The numbers are enough to make any small-business stand up and take notice. But despite being in a steady decline, retail stores continue to generate more sales than online stores, which ought to tell you something. Given the choice, your ancestors may have tried to enjoy both, too: the speed and efficiency after turning the key of technology and the easy-going, tactile pleasure of holding the reins.
References
- Webopedia: eBusiness
- Business Zeal: The Advantages and Disadvantages of E-business That You Should Know
- Computerworld: The difference between e-business and e-commerce
- Magneto: 5 Advantages and Disadvantages of Ecommerce for Businesses in 2018
- Oberlo: 20 Ecommerce Advantages and Disadvantages You Need to Know
- Statista: Retail e-commerce sales in the United States from 2017 to 2023
Writer Bio
Mary Wroblewski earned a master's degree with high honors in communications and has worked as a reporter and editor in two Chicago newsrooms. Then she launched her own small business, which specialized in assisting small business owners with “all things marketing” – from drafting a marketing plan and writing website copy to crafting media plans and developing email campaigns. Mary writes extensively about small business issues and especially “all things marketing.”