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E business models vs traditional business model

Updated on November 30, 2015

Advantages of E-Business

The twenty first century methods of doing business have drastically changed from that of the twentieth century. Technology has made it possible for consumers to buy a product without having to leave the comfort of their own home. With the single click of a button you will not only be able to purchase a product but you can also determine the quantity of items you want and you can choose whichever shipping speed you desire. Having this new found technology saves consumers a lot of time and in some cases a lot of money but with the good of this technology comes the bad. This brings us to the question “what are the advantages/disadvantages of using e-business as oppose to traditional business models?” Personalized service, high quality customer service, convenience, low cost marketing, and student friendly are advantages of e-business models whereas less security, less privacy, no physical proximity to products, limitation to items you can sell, and purchase to delivery time are disadvantages of e-business models.

When a customer shops consistently on a certain site it makes it easier to determine what it is that the consumers like and what is affordable to them. As you may or may not know the four P’s in marketing are product, placement, price, and promotion, and in the case of e-business personalization becomes the fifth P. Due to these websites studying our buying behavior it will make it easier for us to shop through promoting products that they know we already maybe interested in. This is contrast to the traditional business which requires you to walk around a store until you find something that you like. Moreover, no matter how many times you shop as a certain store in some cases the employees will have a hard time trying to determine your buying behavior because of the vast amount of customers being served daily (Zeepedia).

High quality customer service is also a major a major advantage in e-business. Technology has become so advanced that is allows each consumer to write a review on product purchased in a matter of minutes. This technique enables businesses to improve their products. In some cases it also allows the consumer to return the product in the event that the product has malfunctioned upon use and he/she may receive a refund. Most Traditional business models prefer that you email them your complaint and complete a survey which may or may not be right away or promptly. Even if read there is no guarantee that the product or service will be improved (Zeepedia).

Having an online site that is available to you 24/7 is a very convenient way of doing business. This allows consumers to purchase products or items that are needed promptly without having to wait until the store open. As opposed to the traditional business which runs on a strict schedule, time is not a factor in the e-business world. In the long term this becomes an advantage for consumers all over the world who may have different time zones (Zeepedia).

Certain e-business sites such as Amazon and EBay allows consumers to market their own products. This allows consumers to not only make a profit and market themselves to millions of people but they also make it affordable for to market your product through the use of low cost effective marketing. By doing so it allows you as the consumer to use many online tactics such as email marketing, article marketing and social media (Facebook, Twitter, Instagram, etc.) marketing. Through using these social media you are enabling yourself to bring in a huge amount of online traffic onto the website in which you are selling or promoting your products (Lorette).

If you are a student in college then you appreciate certain sites such as Amazon or EBay. This is because books that maybe sold in Nassau from upwards to $200 dollars can be sold cheaper on Amazon for as little as $60 or even cheaper. Due to sites like these being student friendly and even give a 15% off on school items during back to school it helps students and also their parents to save money that can be used elsewhere. This is one of the main advantages for college students because of the ability for us to get great deals without having to depend on borrowing other student’s notes or books. Colleges also recommend that students go online to purchase books as well because they agree that it would in fact be cheaper and cost friendly to order the book from online.


Disadvantages of E business

As previously said in the introduction, with the good/benefits of this technology comes the bad/limitations. This brings us to the disadvantages of e-business. In the online world there is less security. Although each website promises that your personal information will be protected there is not a 100% guarantee. Any professional hacker or someone who is good with a computer can break into a system and gain access to your financial information which can give consumers a sense of vulnerability. This is in high contrast to a traditional business where if an employee steals your personal information they can always be tracked depending on who worked that shift.

Every time you purchase a product from an online store it enables the store to send you email about the different sales that they are having. If a store can easily email you without you knowingly subscribing to that site then it makes you wonder how much privacy do you really have. With that being said did you know that cookies, in computer terminology, can be used to track consumers’ online behavior. Although, in some cases, it can be helpful in reference to personalization it can also be considered as a breach of informational privacy. Unfortunately this can also take place within a traditional business where you may use your credit card. This will allow certain stores to send you emails and in the case of BTC text messages about trivia games which can also make you question your privacy (Zeepedia).

Even though shopping online is more convenient than having to walk around a store it also makes it difficult for you to examine a product closely to ensure that you are receiving a great working product. This comes as a major disadvantage because you never know what you will receive via the internet and certain products are non-refundable. This is why when using e-business you work more on faith than actuality. In the traditional business world you can feel the product, find out how it works, test the product out and you can even receive a warranty based on the product that allows you to bring it back in the case that it malfunctions unexpectedly (Zeepedia).

Another main disadvantage of e-business is that there is a lack of growth in certain sections such as food. The food section has not benefitted in growth of sales on sites such as Wal-Mart or Amazon Fresh because of the food product being non-perishable. When going on such sites consumers do not look for food product because they prefer to go into the store and buy it for themselves. This makes it difficult for these items to be sold because consumers prefer electronics, clothing, books, and other items (Buzzle, 2012).

Purchase to Delivery time can also be seen as a disadvantage to many consumers. This is because you may order an item on the 15th of August and it may not be delivered until the first week of September. This makes it difficult for students, if they ordering books, to keep up with homework given from a text book. It also makes it difficult for other consumers who may need an item as soon as possible. This is in contrast to a traditional business where you can purchase the item right then and there and take it home upon purchase (Gordan, 2014).

There is no telling where the business world will be ten years from now. With the upgrade of technology each year who knows where the e-business world and the traditional business world will stand. But, as of right now many people are migrating towards e-business because of their high quality customer service which allows you to write reviews on the spot. It also provides personalized service that studies your buying habits making it easier for you to shop. Although e-business has a lot of advantages it also has as many disadvantages such as less security than that of a traditional business, less privacy, and you cannot examine or hold a tangible item making it difficult for you to determine the effectiveness or the product. However, in ten to twenty years there is a high chance that the security of such sites will improve drastically making their consumers feel more secure. Until then we can only buy a product based on trust that the seller is in fact legitimate.



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