E-commerce is a highly efficient way to conduct business. Selling online enables a company to reach ...

1. How does e-commerce reduce business transaction costs?
E-commerce is a highly efficient way to conduct business. Selling online enables a company to reach
potential customers while reducing costs associated with a brick-and-mortar operation.
Reduced Capital Costs
Selling online lets businesses reach customers without the expense of building or renting stores.
One website can sell merchandise to customers worldwide without the cost of a physical store.
Reduced Labor Costs
E-commerce reduces labor costs.
Selling online reduces or even
eliminates the need for salespeople.
Companies can still offer customer
support, but the cost of online
customer service representatives is
less than a traditional sales team.
Reduced Marketing Costs
Advertising online is more cost
effective than other advertising
methods. In most cases the return on
investment is much higher for online
advertising campaigns than traditional
print, television or radio advertising.
Reduced Distribution Costs
E-commerce companies ship their products from centralized warehouses. This eliminates the need to
stock multiple stores and reduces the total distribution costs. Also, many e-commerce companies
pass shipping costs on to their customers.
Warning
Although e-commerce can significantly reduce the costs of running a business, companies must still
abide by sound business practices. E-commerce customers demand high levels of customer service,
product guarantees and return policies, just as customers of traditional businesses do.

2. Source:
Ecommerce Education: Benefits of Ecommerce
http://www.answerbag.com/q_view/190459
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