Much as we wish there weren’t, there are a lot of misconceptions about E-commerce out there. Not only do these misconceptions affect how E-commerce companies do business, but also with whom they do business. However, the myths and realities of E-commerce businesses can be quickly and easily understood. That being said, here are seven myths that you should leave in your rear-view mirror.
- First thing: All E-commerce businesses are focused on earning a profit. This is not the case. In fact, the goals of the company are determined by both the stakeholders and by the type of company it is. For example, not all E-commerce businesses are for-profit organizations. The reality is that many E-commerce businesses are not-for-profit organizations and have other goals that they are focusing on, not earning a profit. These companies may be focused on tasks such as meeting humanitarian goals or improving human rights. The differences in the types of organizations does not make one type of E-commerce organization more important than the other. Rather, the different types of E-commerce organizations suggests the versatility of the world market, allowing for many different organizations to compete.
- Second thing: All that is needed for successful E-commerce activities is a website. This is not true. In fact, the majority of companies depend on advertising in order to raise awareness regarding their company. Thus, few, if any, do not need to market their products/services. Therefore, the website for the company can be the most well-designed one available and there may still be little/no traffic if knowledge is not spread regarding the company’s existence. However, once the reputation is established, it may be that advertising expenses may decrease due to less requirements for advertising. Regardless, the company will want to ensure that it continues to promote itself in various ways online in order to maintain a strong presence within the market.
- Third thing: Related to the preceding topic, the best price can be found online. This is not always the case. In many cases, the price found online can be used to negotiate in store prices. However, in some cases, it is most effective to utilize E-commerce sites in order to obtain products. This is especially true when purchasing imported goods that may not be found in the home country. As a result, pricing competitively can be effective online as well.
- Fourth thing: Pricing is the most important component of E-commerce. This is not necessarily the case. While it is important to provide a quality product/service at an affordable price, it may be more important to establish customer loyalty.
- Fifth thing: Expenses have little impact on the E-commerce business. In some ways, E-commerce businesses may have more expenses than traditional brick-and-mortar businesses because of international regulations. Furthermore, inflation may cause E-commerce expenses to increase. Thus, the economy is influential in the profitability of many companies, including E-commerce companies.
- Sixth thing: All E-commerce websites are equal. Just as no two brick-and-mortar stores are completely equal, no two E-commerce websites are not equal. In fact, this is especially true in these instances due to the advancement of technology.
- Seventh thing: The internet will provide all necessary advertising for the E-commerce company. With new restrictions on search engines, such as Google, Bing, and Yahoo, advertising is not as easy as it once was online. However, this does not mean that online advertising is impossible. The reality is that the company will need to utilize SEO content in order to advertise effectively.
These myths show that there are many factors in E-commerce that must be considered before focusing solely on this business set-up. To talk more about this, or anything else, please contact us.
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