eCommerce or electronic commerce is a popular format to run and grow a business in the information technology age. Because of its technical integration with profound business practices, eCommerce has emerged as a significant source of increased revenues and reduced cost. The integration of internet technology and database management systems, enable companies to operate their business in a more organized way.
eCommerce curbs costs that are underutilized or extra added cost to your balance sheet at the end of the financial year. The concept of e-store reduces business transaction cost in the following ways:
Efficient Process: Electronic selling nearly minimizes the requirements of the order processing such as papers for invoice generation, billing errors and manual tracking of sold items at a retail outlet. Electronic selling is a more efficient system, which saves a company's time, money and manpower efforts. This translates into hassle free services without bearing much manpower cost, required at the time of check out from a physical outlet. In addition to that, least inaccuracies and minimum transaction errors enable eCommerce staff to enjoy the focus on more profit-generating activities.
Obsolete Brick & Mortar: e-stores curb the cost of physical outlet establishment and later on its maintenance cost. E-store's counterpart – a retail store's total earning is further divided into numerous expenses such as the maintenance of the ambience of the outlet, electricity bills, employed workforce's salaries, telephone bills, equipment and machines to keep the records and inventory, security systems and lease. However, the income generated from an e-store has a fewer elements to spend on, between the process of getting an order and delivering it to the customers.
Optimized Inventory Management: Managing inventory is an expensive asset. Whether selling automobiles or apparels, one has to spend a good amount of money on their showcasing, storage, packaging & other stock keeping requirements. All these extra costs deploy profit margins significantly. Whereas, an e-store does not require physical space to display and store items; however, the element of packaging cost is applicable to an e-store format also, but it does not act as an extra cost, because the packaging is required for the sold items and not for unsold items.
Reduced Payment Process Cost: A physical retail outlet requires personnel, telephones, computers and payment machines to complete the payment process; whereas, for e-stores, companies only require a good payment gateway to host their transactions successfully, and in a secure environment.