The Disadvantages of E-Business

by Jack Gordon; Updated September 26, 2017
closeup on young woman with credit card using tablet pc

Although the Internet has continued to prop up mom-and-pop e-businesses to compete alongside large companies in meeting customer need for variety, online-based stores still face several challenges. Operating your e-business successfully means going beyond offering access across a range of platforms -- from desktops to smartphones -- you must provide timely delivery and transaction data security. Just as your website offers the convenience of purchasing at the click of a button, you need to invest in systems that ensure public trust and confidence in your company.

Security and Integrity Issues

Hackers are adept at manipulating online business websites to harvest financial data. The information you require of your customers -- shipping address, credit card details and email -- potentially provides ample resource for hackers to initiate identity theft. This risk keeps some people from shopping online. You have to assure customers of the security of their personal data as they interact with your e-business. Ensure site integrity by investing time and money in learning and implementing good security measures, including digital signatures and data encryption, to protect client information lest it falls in the wrong hands and lawsuits ensue.

Purchase to Delivery Time

As much as the Internet has the advantage of processing orders and payments in real time, this has little benefit to the customer who requires the purchased item equally fast. Unlike brick-and-mortar businesses, purchases from your e-business typically have a time lag from purchase to delivery of the physical goods. Some customers would rather go to the physical store and pick up the item unless it's of a digital kind, such as an e-book or music file.

Momentary Intangibility

The personal touch is a missing factor in online transactions. An e-business normally offers the customer no physical proximity to the items purchased until delivery. Experiencing the feel, taste or smell of a product can influence the decision to buy. Unless it's a repeat buyer, your typical customer would want to feel the texture of the leather wallet, the comfort of the shoe or smell the cologne before ordering. The absence of an opportunity to physically examine the product places a major limitation on e-businesses.

Sectoral Limitations

Not every company can participate in e-commerce. Some are challenged in terms of expertise and availability of technology, while others carry products that can't be shipped economically. For example, some large, odd-sized items may be uneconomical to transport across state lines, making it difficult to sell them online. Other products may be legally restricted, depending on state and federal laws, such as certain explosives, ammunition and alcoholic beverages.

About the Author

Dr Jack Gordon, the Chief Technology Officer at Strontium Logistics, is a 20-year veteran of the engineering and marketing business who favors stiff drinks, good debates and developing innovative digital marketing strategies to help companies grow.

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