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Home » Business & Finance

Benefits and Limitations of E-commerce You Should Consider

Michael AustinBy Michael Austin Business & Finance
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We live in a world where everything is going digital, including stores. E-commerce, which is the act of selling products and services online, has transformed the market place on a global scale. People no longer need to visit brick and mortar stores to buy things. This has created an opportunity for many people to start a business.

Benefits and Limitations of E-commerce

Just think about it, by 2019: it is estimated that there will be 1.92 billion digital buyers.

worldwide. That is a large number of people willing to buy things online. And the number is only going to increase from there.

Luckily, having an e-commerce store is not that complicated. There are even a number of e-commerce builders that can help you get the job done with ease. However, you can’t just jump in without having all the facts.

Just as there are benefits, there are also limitations of e-commerce. This article is going to look at both the benefits and limitations of e-commerce.

Table of Contents

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  • 1] Benefits of E-commerce
    • 1) Opens up New Markets
    • 2) You Save Money
    • 3) Sell Unlimited Copies of Digital Products
    • 4) Easier to Scale
    • 5) E-commerce stores are available 24/7
  • 2] Limitations of E-commerce
    • 1) Technological Limitations
    • 2) Some Consumers Still Prefer Physical Stores
    • 3) Can’t sell Perishable Goods
  • E-commerce: Consider Both Benefits and Limitations

1] Benefits of E-commerce

Benefits of E-commerce

In 2019, 13.7% of all retail sales across the globe will come from e-commerce. That is what is driving people to consider e-commerce as a viable source of revenue. It is estimated to reach 17.5% by 2021, showing that e-commerce is slowly becoming a vital part of the buying experience.

This means it is opening up a lot of opportunities for entrepreneurs worldwide.

Here are more benefits of e-commerce to consider.

1) Opens up New Markets

Once you set up your e-commerce store, people can access it from anywhere in the world. This is convenient for people who are not located in urban areas, allowing them to buy goods they wouldn’t otherwise be able to since there are no physical stores in their area. For such people, they are left with no choice but to go online and hunt for what they need.

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Opens up New Markets

For you, this means you open yourself up to new markets that aren’t local to your area. As mentioned earlier, these types of buyers are on the rise, meaning it allows you to improve your business model to cater for the influx of new customers and the subsequent growth.

2) You Save Money

One major complaint about operating a brick and mortar establishment is the rent. Not having to incur monthly rental expenses means massive savings. Furthermore, these savings can be channeled back into your e-commerce business, allowing you to scale accordingly.

Another plus of operating an online store in the rentals department is that you don’t have to worry about utility and other maintenance bills as well. There is also no need to remodel the space to accommodate your products. This also means you also don’t have to worry about returning the place to its original setting when leaving.

3) Sell Unlimited Copies of Digital Products

If you would like to sell things like ebooks, video games and music, then an e-commerce store is the best setup for you. You aren’t limited to shelving space, meaning you can sell an unlimited amount of these items. By offering unlimited stock, there is no cap on how much you can earn.

Plus, people find this model enticing because it allows them to access their purchase instantly. No need to wait hours for it to be delivered.

On top of that, you also save on payroll expenses. You don’t have to hire a lot of people to help you sell digital products on a website.

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You’d be surprised to know how much money top shopify dropshipping stores are making, and without a doubt you can replicate their success.

4) Easier to Scale

With an e-commerce store, you can easily scale your business by increasing your catalog as well. Remember that you are not limited by any physical space. This means you can pretty much offer your customer base anything you’d like.

Off course, when you scale up, logistics becomes a nightmare. But, luckily, logistics can be scaled as well to keep things moving and profitable.

5) E-commerce stores are available 24/7

What do you think is the number one reason people shop online? If you thought it was because the shops are open 24/7, you are correct. Plus, the benefit of always being open means more sales and profits for you.

2] Limitations of E-commerce

Limitations of E-commerce

Now that we have discussed the benefits, let us talk about the limitations of e-commerce that you will encounter.

1) Technological Limitations

The e-commerce business model requires that each one of your customers have an internet connection. Sadly, the internet has not reached everyone. Also, while it is relatively easy to purchase online, not everyone knows how to do it. This means people who aren’t knowledgeable enough about the internet or e-commerce will shy away from it.

These are people you can’t reach no matter what.

2) Some Consumers Still Prefer Physical Stores

Some people simply can’t be sold on e-commerce because it eliminates three things that are integral to their buying experience.

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  1. Personal touch – These people value the face-to-face relationship building that comes with purchasing items physically.
  2. Experiencing the product before buying – For example, when people are buying clothes, they like to wear them to make sure they fit and look right. E-commerce doesn’t allow for this.
  3. Security – Due to credit card fraud, many people just don’t feel safe purchasing online.

3) Can’t sell Perishable Goods

You can’t sell everything on the internet. Perishable goods are out for a number of reasons.

  • To get the products on their doorstep on time, your customers may have to make a lot of calls and send a lot of emails.
  • And in case of total dissatisfaction, it can be hard to return the item or get a refund.

E-commerce: Consider Both Benefits and Limitations

People are buying things online, and many people want to get in on the action. If you are one of them, then you are in for a treat. Now is the time to capitalize on the growth of e-commerce. And as you can see, there are some benefits to it. These include access to new markets, business scalability and the fact that you don’t have to worry about rent.

On the other hand, there are also limitations of e-commerce. These include technological limitations and the fact that you can’t sell perishable goods.

Now that you know the benefits and disadvantages of e-commerce, you can see that the benefits of venturing into e-commerce outweigh the disadvantages. And with the world becoming increasingly digital, it just makes a lot of sense.

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Michael Austin is an expert writer who loves creating engaging and easy-to-understand content. With years of experience, he specializes in writing well-researched articles that inform, inspire, and entertain readers. His clear and simple writing style makes complex topics easy to grasp. Whether it's trending news, helpful guides, or expert insights, Michael’s content is designed to be valuable and SEO-friendly, ensuring it reaches the right audience. Stay connected for his latest articles!

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