Explain the postives of introducing an e-commerce system to an organisation

by ellouise1997hotmailcom (student)

Amazon sell worldwide which means they can sell products to more people and have an advantage over companies that do not sell across the world. This means that customers have the chance to purchase products from all over the world in the comfort of their homes. E-commerce makes this possible as the store can be accessed anywhere in the world with internet access. This beats traditional stores because only the people who are in the area of the store can go in and buy products, not everyone in the world like e-commerce can do.

Amazon allow 27/7 trading which means that a customer can log on whenever they wish and buy products. Customers are more likely to do this as it’s easier and more convenient for them. Trading can be carried out day or night and unlike some businesses, there is no closing time. Because websites can be automated, there doesn’t need to be any staff like there is in highstreets stores. This also means more customers can shop when it’s convenient for them.

Amazon would have been easy to set up because they don’t need premises, electric, water and other essential things when opening up a traditional store but only need a website and things that need to maintain the site. Relatively low start-up and running costs means it’s easy for people to start their own business. For a traditional store, you will need to buy property to have your store, overheads like electric and shelves to hold the stock which can all add up to be pricy. For an online store, you only need to pay for the start-up costs of a website and staff to maintain the website rather than all the overheads of a traditional store.

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Amazon will have deals in which makes them more competitive against other online stores. Amazon will try to provide the best prices in order for more customers to shop with them instead of other stores. One thing that is used today is comparison sites and therefore the cheapest stores will be the stores customers shop with and Amazon will want that to be them. Online stores can be more competitive by providing the chance for customers to save money using special deals. This makes them more competitive because other stores may not have online stores or their products may be too expensive. E-commerce can do this because when customers sign up they can get a welcome email with a discount code or they can regularly send discount codes via emails and then the customer can enter it on the checkout page which you cannot do when you are in a traditional store. This will make them more competitive as they can provide discounts better than their competitors, gaining many customers due to the good deals.

Amazon have good search facilities which allow the customer to search for what they specifically want; they also have filter options which allow the customer filter for the cheapest product first or the closest item to them or even brands and colours which means it’s easier for them to find the exact product they need. E-commerce stores allow products to be found in just seconds with their special search facilities. This benefits the customer by allowing them timely retrieval of information. Online stores can have searching facilities that can reduce the amount of items shown so that the items that are shown are what the customer wants. For instance, allowing to pick a category such as beauty or film and games. This cannot be done in traditional stores because you have to search the whole store.

When someone wants to buy something from Amazon, as soon as they log in, they are greeted with a message and a list of products they may be interested into and this may make them more likely to buy new products. This information will be gathered with cookies which will record all of the items they have looked for in the past and then recommend similar items when they next log in. It’s hard to gather information about customers in traditional stores but online it is easier. This is because customers need to register as members to purchase items. The business can then tailor their services to suit the customer.

When you search for something on Google the first thing that may show is a link to Amazon which can provide them more customers. Once a business has an e-commerce facility, added ways of income available. For instance, pay-per-click advertising.

Amazon can provide discounts to their customers which will make customers want to buy the products and also make them shop with them again. Fluid pricing is used in Amazon. For example, they have a function which says if there are 5 items left, the price will decrease as they want to clear the stock quickly and allow new stock to take its place. Online stores may have discounts to encourage shop online and online stores can also take advantage of fluid pricing which is difficult in traditional stores. Online stores can make use of fluid pricing which is where they alter the prices of their stock depending how much they have left. Online stores can also set up algorithms which help to determine the optimum price to make an overall profit. In addition, they can have a function which compares prices between their store and other competitive stores and can then change their prices accordingly. Traditional stores cannot do this.

Amazon make use of fluid pricing by looking at trends of popular items and then setting prices slightly higher because they know they will sell the item meaning a larger profit for them. If they see that there are certain items that they cannot sell as well, they can reduce the price which will make customers want to buy the items. Fluid pricing means that shops can put stock that is in high demand at a higher price and stock that is in less demand at a lower price so that customers will buy all the items. Fluid pricing means that they will be making more money either way as if they become popular the prices will rise. This allows all product to be sold.

Explain the postives of introducing an e-commerce system to an organisation

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