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The Benefits of E-Procurement and E-Commerce in Business

In the last few years, the practices of e-procurement and e-commerce have changed the course of businesses everywhere.  Not long ago, the purchasing of supplies, services and merchandise was exclusively accomplished through phone calls, catalog orders, and personal sales visits.  Online purchasing options, however, have opened up many new choices for companies as well as customers.  At this point in time, one can buy almost anything electronically. 

Obviously, every company must make purchases.  E-procurement, or the process of supplier exchange, provides a way for businesses to reduce costs and find significant savings.

A purchase that is not made online usually must pass through many hands in order to be approved, documented, filed, etc.  The obvious result is a longer waiting period for ordered materials.  Because of the complications of manually processing purchase orders and other paperwork, switching to online business transactions can reduce both the cost and time spent on the ordering process.  Rather than using their workdays to print, fax, or mail documents, purchasers can use this saved time to create and maintain business relationships with suppliers.

For businesses wishing to sell products, e-commerce can be an excellent way to save large amounts of money.  It has long been known that customers often appreciate the flexibility of being able to shop from home.  Catalogues, flyers, and postage, however, can become very expensive ways to conduct business.  A company that is able to provide online shopping alternatives for its customers will have a high advantage in reduced expenses.

Offering products and services online also eliminates or cuts down many of the costs involved with customer service and care.  Traditionally, many orders have been placed and received by phone.  Transactions made online save expenses, both in phone charges and in the amount of employees needed to answer the phone. 

Many times, companies also send follow up emails to their customers.  This is another way to keep in contact and have positive interaction without needing to employ many customer service representatives.  Additionally, much more information is available to customers online.  This information includes things like the status of a person’s order, a list of frequently asked questions, or shipment tracking.  All of these things can be relayed through email, again, saving the sales company a lot of unnecessary expense in the way of customer service telephone calls.

Customers who shop online can search a website’s catalog for exactly what they need.

There is much more information available to them than what would be able to fit in a traditional paper catalog.  E-commerce also enables a business to make more sales offers to its purchasers.  By listing related available items for customers, or showing items that others have purchased in conjunction with the item being bought, a company is much more likely to reap additional sales without much effort.

Another advantage of e-commerce is the opportunity for customers to shop over a longer period of time, if they prefer.  They can make decisions and fill their online “shopping carts” without actually purchasing anything until they know exactly what they want.  For a customer, this is a valuable benefit, although this could also be a potential downfall to companies due to price comparisons.  One thing to note, however, is that E-commerce usually cuts costs in such drastic ways that online companies are able to sell their products at much lower prices than they would otherwise be able to offer.

However, it is important to note that the Internet will never be able to create the same social appeal as a physical store.  For some people, shopping in a face-to-face environment is important, but for others, the idea of shopping in anonymity can actually be more appealing.  Those who prefer a personal and social shopping experience may still find the low prices and convenience of online shopping worthwhile.

The world of e-commerce is not without its challenges.  One aspect of business that may prove difficult is finding ways to actually direct people to a company’s site, and causing them to want to return.  Also, it can sometimes be a challenge to stand out from other competitors.  As the Internet opens up new opportunities that can be taken advantage of by anyone, this in turn creates more fierce competition for an online business.

Despite the unique challenges that online commerce can pose, it still seems to be a viable alternative to the former, more expensive model of conducting business.  In order to keep current with the rapidly changing times, it would be advantageous for any company to consider taking their business to the online world.



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