Benefits of E-Commerce

To Organizations
● Expands a company’s marketplace to national and international markets. With minimal capital outlay, a company
can quickly locate more customers, the best suppliers, and the most suitable business partners worldwide.
● Enables companies to procure material and services from other countries, rapidly and at less cost.
● Shortens or even eliminates marketing distribution channels, making products cheaper and vendors’ profits
higher.
● Decreases (by as much as 90 percent) the cost of creating, processing, distributing, storing, and retrieving
digitizable products and services (e.g., music, software).
● Allows lower inventories by facilitating “pull”-type supply chain management (see Appendix 2A). This allows
product customization and reduces inventory costs.
● Lowers telecommunications costs because the Internet is much cheaper than value-added networks (VANs).
● Helps some small businesses compete against large companies.
● Enables a very specialized niche market (e.g., cattoys.com).

To Customers
● Frequently provides less expensive products and services by allowing consumers to conduct quick online
searches and comparisons.
● Gives consumers more choices in selecting products and vendors.
● Enables customers to shop or make other transactions 24 hours a day, from almost any location.
● Retrieves relevant and detailed information in seconds.
● Enables consumers to get customized products, from PCs to cars, at competitive prices.
● Makes it possible for people to work and study at home.
● Makes possible electronic auctions that benefit buyers and sellers (see Section 4.2).
● Allows consumers to interact in electronic communities and to exchange ideas and compare experiences.
To Society
● Enables individuals to work at home and to do less traveling, resulting in less road traffic and less air
pollution.
● Allows some merchandise to be sold at lower prices, thereby increasing people’s standard of living.
● Enables people in developing countries and rural areas to enjoy products and services that otherwise are
not available. This includes opportunities to learn professions and earn college degrees, or to receive better
medical care.
● Facilitates delivery of public services, such as government entitlements, reducing the cost of distribution and
chance of fraud, and increasing the quality of social services, police work, health care, and education.