Top 15 Benefits of e-Commerce for Small Business & Entrepreneurs
What is e-Commerce?
Electronic commerce, or e-Commerce, as it is widely known, refers to the practice of selling goods and services over the internet. We know that for the better part of human history, exchange or buying and selling of goods and services required both parties to be physically present at the place of exchange at the same time. However, at the beginning of the 21st century, such exchanges of goods and services started taking place online, over the Internet. Big companies like Amazon, Flipkart, eBay, Alibaba, and so many others have emerged as giants in the field of e-Commerce. Anything and everything can be purchased through the benefits of e-Commerce today. e-Commerce operates in four market segments, business-to-business, business-to-consumer, consumer-to-consumer, and consumer-to-business.
The method of e-Commerce dates way back to the 1960s when companies used an electronic system called the Electronic Data Interchange to expedite and further the process of transfer of documents. But it was in 1944 that the first e-Commerce transaction was made. In recent years, it is not only big business houses but also small and emerging businesses taken the benefits of e-Commerce.
Growth of e-Commerce
e-Commerce has become a vital part of every economy. The benefits of e-Commerce continued well into 2021 as well. According to a report published in CTV News on November 23, 2020, online sales recorded in the year 2020 exceeded the sales recorded in the year 2019 of $305 billion, a figure that has more than doubled since 2013 and includes business-to-business sales as well as retail purchases. Online sales and purchases have even brought about changes in the spending patterns of people in most countries.
Small businesses have reaped their share of benefits as well. Most small businesses make sure to set up their website to showcase their products and services. That is the major first step, and everything else just flows from there. Businesses with an online presence have been able to continue their set path, despite the ravages of the pandemic. Those businesses without an online presence have not been able to grow as much.
This aspect changed radically with the onset of the pandemic. Lockdowns and quarantines forced retail stores to close, and companies to move their businesses online. In 2020, online shopping pushed retail sales up nearly 4 percent, to $5.6 trillion, compared to the previous year, according to research firm eMarketer. e-Commerce alone grew by 33.6 percent in 2020. Small companies and businesses saw a spurt in their sales amid the pandemic. According to Adobe, based on Adobe Analytics data, US online spending totaled $188.2 billion over November and December 2020, which represents 32.2 percent growth year-over-year.
Benefits of e-Commerce
In the initial stages, many small enterprises have only fiddled around the idea of e-Commerce. But the pandemic has significantly altered this scenario. Let us delve into some of the benefits of e-Commerce for small businesses:
1. Low operational costs:
Running a business online involves a significantly lower cost, compared to setting up a physical store. This is because, in a brick-and-mortar store, there is a lot of investment involved in purchasing or renting out a suitable location. Looking out for a suitable storage location can also prove to be a hectic task, as there are several factors involved. On the other hand, setting up a website requires little to no additional costs and very little capital disbursement. Hiring another to build your business website is also comparatively cheaper, and the cost can be easily recovered from the profits made by sales.
2. Increased revenue:
No matter how much you prefer shopping from a physical store, your options are still limited on account of geographical area. When you move your business online, the whole world is at your feet. You can begin to sell your products on a state, national, or even international level. You can capture the attention of audiences sitting in a completely different part of the world, which is not possible through a physical store.
3. Greater customer branding:
Traditional retail stores relied on branding and customer relationships. However, with the advent of online retail, potential buyers are presented with a myriad of choices when searching for a particular product. The more the searches, the more is the traffic that is driven to the online stores. This results in increased customer acquisition. Marketing has now become a digital concept. Small businesses need only design pages that can be indexed by search engine crawlers, paired with customers’ online search queries. This helps ensure that your product reaches your target audience. Consistent search engine optimization brings in increased sales for the business.
4. Social media traffic:
Social media has grown tremendously over the years and will continue to grow even more. Hence, it is up to the businesses to ensure that they can make use of this growth to their advantage. If a consumer is impressed and satisfied with your products and services, she/he is highly likely to recommend you to their friends and colleagues via social media platforms like Instagram and LinkedIn. Extensive word-of-mouth recommendations over social media urge consumers to go online for their purchases since consumers trust the reviews that they receive online.
5. Customer Analytics and Feedback:
A physical store makes it almost impossible to study customer habits. Vague conclusions from customers wandering in your store are not fruitful. They will not help you to improve sales. When a business moves online, customer feedback automatically moves on to social media. Small businesses can make use of analytics and customer feedback to answer crucial questions about their business. Based on this feedback, businesses can design their products and services to cater to the customized demands of their consumers. This, in turn, will increase sales.
6. Online Presence:
It has been seen in recent years, that most customers prefer online solutions and products. They expect businesses to be available online so that they can shop from the comfort of their homes. Small companies having a flourishing online presence have a greater chance of staying afloat and retaining their target audience.
7. Easy Product Tracking:
Benefits of e-Commerce offer online product tracking. Businesses offering an online presence make sure that their consumers do not face any concerns regarding the delivery of their products. Consumers can quickly track the status of their product when they order it online. Businesses can also track their inventory and stock as per their requirements.
8. Flexible Online Presence:
Unlike physical stores, an online store is open 24*7/365. This means that the business is essentially never shut down, and customers can make a purchase whenever they feel convenient. This round-the-clock availability is a major booster for sales and is a major reason why e-Commerce is important for small and medium businesses.
9. Automated Product Delivery Solutions:
One of the major concerns of small businesses, or rather, any business having an online presence, is making sure their products reach their consumers within the stipulated time. There are various e-Commerce logistics and shipping platforms that help to make this process easier. They deliver products to any part of the world as per requirements.
10. Larger marketing ROI:
The marketing activities of physical stores are limited by geographical boundaries. However, with an online presence, small businesses can cater to the entire world. They can digitally market their products and services, thus bringing in domestic as well as international customers. One such marketing tactic is email marketing. Customers can subscribe to deals, offers, or newsletters offered by these businesses by entering their email addresses. Businesses can, in turn, use these emails to send attractive marketing messages to their customers.
11. Labour cost Benefits of e-Commerce:
Small businesses may not want to hire additional labour at additional cost. A physical store would mean division of labour for each segment of the business. When a business moves online, it can carry on its business with minimal labour, or it can hire labour from different parts of the world working online. This is a major advantage and an employment boost.
12. Time saver:
We have all heard the saying, time and tide wait for none. Today, when time is of the essence, online shopping saves a lot of time for consumers. According to Thinkwithgoogle, 63% of consumers start their shopping journey online. There is no need to stand in long queues at the store.
13. Easier to expand:
Expanding a physical store requires additional investment. On the other hand, growing an online business requires little to no expenses and is very simple. Small businesses can greatly benefit from this additional investment. They can use it towards allocating more storage space for their products.
14. Several Payment Modes:
e-Commerce marketplaces offer a wide range of payment modes, starting from UPI, cash on delivery, card on delivery, net banking, EMI to credit or debit card and pay-later credit facility. Such a variety of payment methods ensures that online businesses do not stop functioning just because one consumer is unable to avail of one method of payment.
15. Product and Price Comparison:
With the advantages of an online business, consumers have the option to choose from a wide range of products and prices. Small businesses which offer attractive discounts and offers on good quality products can greatly benefit from this. Consumers also have the option to view all the details about the products they want to buy. Sellers in physical stores may not have all the available information, and this disadvantage is eliminated when the business goes online.
e-Commerce for ErisnTech
IT and software development company ErisnTech provide e-Commerce web development services catered to their client’s unique and personalized requirements. They specialize in both economics and information technologies to curate the perfect solution for their clients’ needs. Some of the services offered by them are, WooCommerce e-Commerce Development Services and Magento, for a PHP-CI based framework. The core features of their e-Commerce services are content management capabilities, ease of response via mobile, multiple payment options, shipping API integration, search engine optimization and others. Some of the areas in which they provide e-Commerce services are fashion and lifestyle, healthcare, education, beauty, food service, media, hospitality, and others. Do visit ErisnTech to get a clear picture of what you and your business needs.