The Rise of E- Business Essay Example | Topics and Well Written Essays - 1750 words

The Rise of E- Business - Essay Example E-business receives due attention due to several reasons. These reasons belong to two main categories: benefits for the suppliers and benefits for the customers. Each of these categories shows how beneficial this new mode of conducting business is. Briefly, e-business is the market for goods and services, which exists online. The suppliers make their goods and services available online, through the websites of their companies. Customers visit these websites, go through the online catalogues and finally select and order their chosen product online. They usually make the payment for these goods and services online as well, after which the supplier couriers the goods to their physical addresses. The efficiency and speediness of this innovative new medium of trade has gained it much popularity throughout the world, as people in both developed and developing countries benefit from this advantageous new option today (Berreby, 2010). Firstly, e-business has led to immense profitability for the supplier side of the market. These suppliers rejoice the numerous advantages virtual trade has over store-based, physical trade. It eliminates the need of large amounts of tangible capital, thus making it a very profitable venture. It replaces the need for inventory and stock collection concerning future predictions of demand. Apart from this, it is also an effective way to keep track of all transactions, since they are all recorded online. Finally, the e-business is one that helps tap into markets all over the world, that is, to reach customers in every country; instead of just the country, the supplier lives in (Li, 2007). These numerous benefits to conducting a business online have led to a sharp rise in e-business over the last decade. Whenever a business is set up, one of the most essential factors to consider is how much startup capital it will require. This refers to the land, buildings, offices, stores, etc. This property needs to be bought or rented, maintained, paid ta xes for and depreciated. All these costs can combine to form a significant chunk of the costs of the business. Apart from this, a large number of employees are required for the upkeep and maintenance of the property, be it repair people, janitors, or other maintenance staff. These numerous employees increase the costs of running a business greatly, and are sometimes responsible for a great cut in profits. E-businesses, however, do not require such buildings and property. The costs of maintaining an online website, although substantial, are not as great as the costs of hiring or buying and depreciating physical property (Karake-Shalhoub, & Qasimi, 2006). This is a major attracting factor for people who choose to start e-businesses. Apart from this, the inventory needs of a physical business are also huge. The seller needs to budget according to the next month, and for this she needs to predict demand for the following period and then order and store that amount of goods in inventory, until they are sold. If any of these inventories is not sold by the end of the next period, it needs to be accounted for, check for expiry and included in the calculations of the following month’s inventory. This procedure takes up a lot of time, money, and effort, and often leads to wastage of goods and shortage of storage space (Stanford-Smith, & Chiozza,