eCommerce versus Traditional Commerce
by Ron Kurtus (14 November 2011)
Although both traditional commerce and e-commerce concern the buying and selling of goods and services, e-commerce performs a different way for marketing and purchasing.
Traditional commerce usually consists of an interaction between salesperson and buyer in a place of business. E-commerce is usually done completely online and is impersonal. There are distinct advantages and disadvantages in e-commerce.
Questions you may have include:
- What is traditional commerce?
- What are e-commerce steps?
- What are the advantages and disadvantages of e-commerce?
This lesson will answer those questions.
In simple terms, traditional commerce consists of marketing to reach potential customers, getting together with the customer in a place of business, agreeing on a sale, and making the exchange of goods and money.
Common marketing techniques used to reach potential customers include mailings, phone calls and advertisements.
Then the buyer and/or the salesman are the active parties involved in a sale and exchange.
In one case, the buyer initiates the purchase by either going to the store to buy or calling on the phone and making an order.
In another situation, the salesman goes to the home or place of business to make the sale, or he calls on the phone to make the sale.
A third method combines action from both parties. The business' sales department mails a catalog or other material, and the customer then makes a purchase from the catalog.
These methods all apply to business-to-consumer (B2C) as well as business-to-business (B2B) sales.
eCommerce, online commerce or e-commerce uses e-marketing to reach potential customers. There are two forms of eMarketing: push-marketing and pull-marketing. Push marketing consists of sending out emails and ezines, as well as posting online ads on various websites. It is pushing information to the people. Pull-marketing is having a website where customers seek out information about your products. Social marketing is also used in pull-marketing.
The buying and selling is similar to the traditional mail order catalog method, except that orders can be performed online from a website. The business' sales department posts a Web site with an online catalog. The buyer then selects items from the online catalog and makes the purchase, either online or by phoning or mail order. A valid credit card is required to make a purchase.
Although the buyer is really using an online catalog, the metaphor of browsing a store with a shopping cart is often used in e-commerce. This allows the customer to put items in the shopping cart to hold until checkout or when the purchase is finally made.
These methods also apply to both B2C and B2B sales.
Advantages and disadvantages of e-commerce
There are advantages and disadvantages for both the seller and buyer in online commerce.
Advantages for the seller include:
- Access to worldwide markets
- Minimal marketing and sales costs
- Can compete with larger companies
- Can track purchases and use data to recommend other items to the customer
Disadvantages to the seller include:
- No personal contact
- Worldwide competition
- Online fraud
- Often difficult tot get people to know about and visit the site
Advantages for the buyer include:
- Can find hard-to-get items from his or her chair
- Reduced cost
- Automated cost-comparison available
Disadvantages for the buyer include:
- Must pay for shipping and wait for delivery
- Cannot see or feel the product before making a decision
- Cannot easily return item or get support
eCommerce uses traditional, as well as new marketing methods. Traditional commerce usually consists of an interaction between salesperson and buyer in a place of business. E-commerce is usually done completely online and is impersonal. There are distinct advantages and disadvantages in e-commerce.
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