The Benefits of Online Business essay
Nowadays, the use of e-commerce for businesses has become important not only for the purpose to preserve the own place on the market, but also to expand market share in connection with the rapid development of information technologies, increasing the role of the Internet and integrated automation industries. Virtual World Wide Web gives a good opportunity to develop the own online business because it has a global character. Any person can successfully do business online, controlling it by the use of the Internet, regardless of geographic location. In addition, there are many other benefits of online business, details of which can be found in the consideration of the following material. In such a way, we see that the use of the Internet is not only relevant, but it is also essential for companies in today’s environment. Thus, the main aims of this paper are to present the most important reasons for the need to use the Internet for business development, and to demonstrate the benefits of doing online business.
At the beginning, it is important to state that the Internet gives a lot of new opportunities for modern companies to extend their activities and to increase their profits. It has a place because online business is a kind of new economic system which allows to increase sales and to reduce costs. It is undoubtful fact that the development of the Internet has created a new kind of economy with so enormous pace of growth that it has already changed the very concept of a traditional business. Today the economy is a system that uses modern technology, and various companies, which actively transfer their businesses to the Internet, form its basis. For instance, many corporations such as Amazon.com and Ebay.com have successfully dominated the areas in which a traditional type of business prevailed over other companies only a few years ago. Thus, the first benefit of online business is its availability to companies because it is not necessarily to be a large company in order to do successful business in the Internet. Moreover, small and medium businesses have the same chances of profitability, and according to Dilts and Kahai (2004), exactly these companies will be the driving force of e-commerce in the nearest future.
The second benefit is hidden in the fact that the Internet is an ideal environment for doing business. If a company has a traditional place to sale the own good, than a number of its customers is limited, while exactly in the Internet all the users can become potential customers; in this case, it is only important to regulate the mechanism of communicating information to them.
The third benefit of doing business online can be seen in the opportunity to create and maintain the company’s perfect image. The website is no longer a luxury and has many functions, among which are the following: the website strengthens position and raises the company’s image in the market; it is an operational tool for marketing and sales departments; and finally, the website creates a fertile ground for further activities and competition.
To continue, online business allows to increase the list of opportunities for the client. In contemporary business environment, it is a key factor of business success to provide a customer with all kinds of information he needs, and owing to the Internet technology, it is possible to realize a constant support for customers in more efficient way. In such a way, the company’s website should not only contain a standard set of information about the company, its products or services, but also to ensure effective communication between the departments of the company, customers and suppliers. This in turn will increase customers’ satisfaction, which in turn will benefit the company in the way of increasing the profitability of this kind of online business.
The fifth advantage of doing online business is availability of information. For instance, many companies needed at least a few days to bring information about the release of new products or some changes in specifications to their customers just a few years ago. But everything has changed with the emergence of online business because the Internet allows the company to inform all the customers just in few hours by publishing news on the own website.
The sixth benefit is minimization of costs. New technologies make it possible to complete the entire process of the transaction, including: commercial request, offer, purchase order and invoicing. In such a way, simplification of business processes enables companies to significantly reduce their costs. For example, according to Steinbock (2000), a process of the transaction through the Internet reduces the costs of procurement of materials by 5-10%, inventory costs by 25 – 50%, and the administrative costs of procurement, even up to 70%.
The seventh benefit is ability to work 24 hours a day. Thus, the biggest advantage of online business is that it is available 24 hours a day from anywhere in the world both for the company and for its customers, allowing to accomplish sales round-the-clock. The actual location of the company does not really matter, since the monitoring of the implementation and conduct of transactions carried out via the Internet.
The eight benefit demonstrates minimum initial investment because there is no necessity to make a large financial investment for the purpose to create a website. It is possible to find a variety of free or inexpensive programs in the Internet that can help to create a website from scratch. Many business portals give services for its members to develop sites on the base of ready templates, and it is quite inexpensive.
In conclusion, we have discussed the benefits of online business with all the necessary details, and presented the most important reasons for the need to use the Internet for business development. It was proved that the Internet significantly alters the spatial and temporal scale of commerce. Currently, the Internet is a global communication tool without any territorial restrictions; meanwhile, the cost of access to information does not depend on the distance from it, as opposed to a traditional business, where this dependence is directly proportional. Thus, e-commerce enables even the smallest suppliers to achieve a global presence, and to do business on a global scale. Accordingly, customers also have the opportunity to select from all of the global potential of suppliers that offer the required products or services regardless of geographic location. The distance between the seller and the buyer plays a role only in terms of transport costs on the stage of delivery of goods, and this moment allows online companies to calculate the own profits and not to assess damages.
