The lower costs of running an e-commerce store versus a physical store translate to cost savings for the consumer. It’s cheaper for a business to operate a physical store, which means customers come back again and again, plus, they’re also able to give out a lot more discounts (look here for more details). E-commerce is an important source of new customers and new income.

Advantages and Disadvantages of E-Commerce Businesses

E-commerce also allows businesses to provide much more personal customer service. This is something Amazon, Walmart, and other large retailers can’t do because they don’t have physical locations and people don’t go to their stores. In the physical world, shoppers are reluctant to approach someone on the phone to ask their question because they fear being talked down to.

On the flip side, a physical store means consumers get to interact with people, see the product in person, and even get a chance to talk about what they like, what they don’t like, and even how they would like it to be modified. All of this customer service has a lot to do with the price of products. The greater the physical proximity of the customer to the product, the lower the cost of goods because customers are more willing to pay a lower price for service and interaction.

As an example, Amazon is known for its price-matching and returns policies. If you don’t like a product, you can return it within 15 days for a refund of the purchase price. On the flip side, stores usually don’t offer this option and in fact frequently say that it’s impossible to return a product because they’re too expensive. And, while Amazon is a retailer, I’ve also seen stores advertise that they only accept cash and check.

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