E-commerce is very effective in reducing the cost of acquiring new customers because advertising is generally cheaper and more targeted than other media. The electronic interface also allows e-commerce merchants to ensure that orders are internally consistent and that orders, receipts and invoices match. E-commerce allows businesses to move most of their customer support online, giving customers direct access to databases or manuals. This usually results in significant cost savings while improving the quality of service. E-commerce stores require far fewer skilled employees. E-commerce can also save on inventory carrying costs. The faster you can order and deliver inputs, the less inventory you need. The impact on costs associated with reduced inventory is most pronounced in industries with limited shelf life (eg bananas), industries affected by rapid technological obsolescence or falling prices (eg computers), or industries with a rapid flow of new products. loses. (eg books, music). Shipping costs increase the cost of many products purchased through e-commerce and can add significantly to the final price, but significantly reduce the distribution costs of digital products such as financial services, software, and travel, which are important sectors of e-commerce.
While e-commerce drives the decentralization of some intermediaries, it also increases their reliance on other intermediaries and entirely new intermediary capabilities. Intermediary services that can add cost to e-commerce include advertising, secure online payments, and shipping. Being an e-commerce merchant and setting up a store is relatively easy, offering a huge number of products that consumers can easily overwhelm. This increases the importance of using advertising to establish a brand name and thus create familiarity and trust with consumers. For new e-commerce startups, this process is expensive and represents significant transaction costs. The inherent characteristics of e-commerce, such as openness, global reach, and lack of physical clues, also make them vulnerable to fraud, thus increasing certain costs for e-commerce merchants compared to traditional stores. New technologies are being developed to secure credit card use in e-commerce, but the need for increased security and user authentication increases costs. A key feature of e-commerce is the convenience of shipping purchases directly. For types such as books, shipping costs are incurred, which in most cases increases prices, negating many of the savings associated with e-commerce and significantly increasing transaction costs.
Through the Internet, e-commerce is rapidly expanding into an open, fast-moving global marketplace with more and more participants. The open and global nature of e-commerce has the potential to increase market size and change market structure, both in the number and size of players and the way players compete in international markets. Digitized products can cross borders in real time, consumers can shop 24 hours a day, 7 days a week, and businesses are increasingly facing international online competition. The Internet helps businesses expand their existing markets by removing many of the distribution and marketing barriers that can prevent them from accessing foreign markets. E-commerce provides an affordable and efficient way to lower information and transaction costs and strengthen customer-supplier relationships for operating in foreign markets. It also encourages businesses to develop innovative ways to advertise, deliver and support their products and services. E-commerce on the Internet offers the potential of a global market, but certain factors such as language, transportation cost, local reputation, cost, and ease of access to the network undermine this potential to some extent.
2. Workplace and Labour Market
Computers and communication technologies allow individuals to communicate with one another in ways complementary to traditional face-to-face, telephonic, and written modes. They enable collaborative work involving distributed communities of actors who seldom, if ever, meet physically. These technologies utilize communication infrastructures that are both global and always up, thus enabling 24-hour activity and asynchronous as well as synchronous interactions among individuals, groups, and organizations. Social interaction in organizations will be affected by use of computers and communication technologies. Peer-to-peer relations across department lines will be enhanced through sharing of information and coordination of activities. Interaction between superiors and subordinates will become more tense because of social control issues raised by the use of computerized monitoring systems, but on the other hand, the use of e-mail will lower the barriers to communications across different status levels, resulting in more uninhibited communications between supervisor and subordinates.
That the importance of distance will be reduced by computers and communication technology also favours telecommuting, and thus, has implications for the residence patterns of the citizens. As workers find that they can do most of their work at home rather than in a centralized workplace, the demand for homes in climatically and physically attractive regions would increase. The consequences of such a shift in employment from the suburbs to more remote areas would be profound. Property values would rise in the favoured destinations and fall in the suburbs. Rural, historical, or charming aspects of life and the environment in the newly attractive areas would be threatened. Since most telecommuters would be among the better educated and higher paid, the demand in these areas for high-income and high-status services like gourmet restaurants and clothing boutiques would increase. Also would there be an expansion of services of all types, creating and expanding job opportunities for the local population.