ELECTRONIC-Commerce How It
Is Affecting American Industry
The Internet over the past few years has seen a huge increase in online businesses and consumers. Electronic-commerce is expected to generate $36 billion in revenue during 1999, up 140% from last year alone. With such a huge amount of money to be made on the Internet it is becoming very appealing for small businesses and start-up companies to try and make their niche in e-commerce. The Internet is drastically affecting the way companies and people conduct business now. E-commerce encourages growth in existing as well as new businesses because of lower overhead costs, the huge consumer base and the freedom of information flow. However the online revolution has created a large amount of competition for consumers between businesses despite the fact that the public does not yet have total confidence in the e-commerce market.
The Internet is a free and seemingly boundless medium that is distributed to over 200 million people worldwide. This creates a large market for companies that are competing on the Internet, which acts as a level playing field. Small companies can compete with larger vendors by getting their product and prices seen by anyone interested online while not being limited by their locale or to just their local area consumers. Another reason why e-commerce is so attractive are the low star-up costs required to start a company. A basic site can be created with as little as a couple hundred dollars, a computer and a little imagination. A business can then be run from a home or network instead of a large expensive building where many employees and machines are needed. Because of this online businesses can sell their products for much less by passing their savings onto the customers.
An e-business is also easily updated and overhauled with some minor html coding. This also gives the consumer much more information and freedom over their purchases. The greatest thing about the Internet is the immense amount of information that is supplied by the online businesses. Companies can now cater directly to the consumers needs through a comprehensive website which details their exact information. Consumers also have the freedom to shop around on numerous other sites or do research on the product from their homes. A store can only provide the product with the limited information given on a box or by a third party that does not always give you the freedom to search and find the important information needed to make purchases. The Information Super-Highway gives the consumer total control over there needs because of the information that is distributed.
There is however a downside to e-commerce. People do not feel completely confident about buying online as of yet. When you make a purchase on the Internet you must give your credit card or other important information like social security numbers and e-mail addresses. Customers are also weary about giving away this kind of information because some companies use this information to find information on their customers and even sell it to other companies. The Internet is also a new medium that does not yet have many laws governing it, which can also lead to some misgivings by consumers.
The freedom that the Internet creates makes it easy for companies to flourish with giving their customers great results. With one out of every three Internet users shopping online, there is a gigantic market out there. This also creates a very competitive market, because you are not just competing in a small region, but throughout the whole nation. Even though it might be very cost effective to start an online business, to sustain one takes a lot of work, creativity and most importantly sales. A current example of the way e-commerce has affected American Industry is IBM. They are a huge computer manufacturer that has been losing money over the sales of there personal computers. This is because they are being undercut by e-commerce businesses where it is much cheaper to go and buy a better product then the one IBM offers. This has caused IBM to pull their computers out of all stores and now sell exclusively on the web. This way they can save a lot of money and be more competitive in e-commerce where a great majority of computers are being bought and sold now days.
Even though there are some reservations about the Internet it is a very exciting entity that is creating a large free enterprise market for an international audience. Internet shopping is expected to increase by at least 50% into the millennium, which leaves much room for growth and new opportunities for new and adventurous companies. E-commerce has opened up a new market in American industry that is forcing companies to become part of the online revolution or suffer the consequences in the long run. The freedom of the Internet combined with the huge amounts of information make for a more easily accessible environment that will revolutionize the way all business is conducted in the future.
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