There are many advantages and disadvantages when switching to e-commerce. Some advantages include reduced costs, you reach a larger market, and you eliminate the use of intermediaries. Some disadvantages include security risks, the cost of computers, servers, and software, and that you need employees that are able to use and fix the system, or hire them.
When considering adopting e-commerce it is important to realize that your company will not constrained by time or space when people are purchasing your products online. More and more businesses are making the move, and adding the benefits of e-commerce to their company. A study conducted by the University of Texas reported that the Internet economy generated more than $300 billion in U.S. revenue in 1998, and that
a company may expect to receive more than 50 percent of all revenues via e-commerce in the next two to three years. Business-to-business e-commerce as well as customers shopping online can drastically improve a business’s profits.
There are several kinds of servers available that are geared toward small businesses wishing to start up online. These include Microsoft’s Internet Information Server 4.0, IBM’s Netfinity 3000, and Hewlett-Packard’s NetServer E 50. All three servers are priced between $2,000 and $3,500. But buying the server equipment is only the beginning. You’ll also need to choose a network infrastructure. The type you select will depend on the size of your business, how tech-savvy you are and how often you plan to modify your catalogs. Some good midrange packages are Catalog Builder from The Vision Factory, iCat Electronic Commerce Professional Suite 3.0 from iCat, and Microsoft Site Server 3.0 Commerce Edition. These packages cost between $1,495 and $9,995 and include features such as indexing, searching, and a virtual shopping cart.
Perhaps the most overlooked aspect of e-business is the potential for decreasing expenses. Companies are finding that developing a full-featured website has the potential to decrease phone calls, shorten transaction time, reduce publishing and mailing costs, and more. Owners report they spend as much time on trips to the bank (18%), inventory (18%) and payroll (9%) as they do on customer service (44%). Time spent on these administrative activities translates to lost productivity. Overall the benefits definitely outweigh the drawbacks, and I would recommend including e-commerce within the business.