Question

What are the benefits and risks of making Internet sales?

Answer 1

Internet marketing used interchangeably online marketing, refers to advertising and marketing efforts that use the Web and email to drive direct sales via electronic commerce. and it also includes sales leadsfrom websites or email or other online tools like application used in mobile devices.

The benifits of internet sale or e-commerce operations are as following.

1.Reduction in costs to buyers from increased competition in procurement as more suppliers
are able to compete in an electronically open marketplace.

2.Reduction in errors, time and overhead costs in information processing by eliminating re-entering of data.
3.Reduction in costs to suppliers by electronically accessing on-line opportunities.
4. Reduction in time to complete business transactions, particularly from delivery to payment.
5. Creation of new markets through the ability to easily and cheaply reach potential customers.
6. Easier entry into new markets especially geographically remote markets,regardles of size and location.
7.Better quality of goods as specifications are standardized and competition is increased and Improved variety of goods through expanded markets.
8. Faster time to market as business processes are linked, thus enabling seamless processing and eliminating time delays.
9.Reduction in inventories and risk of obsolete inventories as the demand for goods are fulfilled as and when ordered.
10. Reduction in advertising costs.

Risks involved in internet sale are as follows.

1. Problem of anonymity: There is need to identify and authenticate users in the virtual global market where anyone can sell to or buy from anyone, anything from anywhere.
2.Repudiation of contract: There is possibility that electroni transaction in the form of contract, sale order or purchase by the trading partner or customer may be denied.
3 Lack of authenticity of transactions: The electronic document that are produced in the  an e-Commerce transaction may not be authentic and reliable.
4. Data Loss, Theft or Duplication: The data transmitted over the Internet may be lost,duplicate, tampered with or replayed.
5. Attack from hackers: Web servers used for e-Commerce may be vulnerable to hackers.

6. Lack of audit trails: Audit trails in e-Commerce system may be lacking and the logs may be incomplete, too voluminous or easily tampered with.
7.Problem of piracy: Intellectual property may not be adequately protected when such property is transacted through e-Commerce.