What are the uses of computer in business and economy?

Answer 1

E-commerce is the buying and selling of products and services on the internet, and it seems to be the wave of the future. How does it work? It is pretty simple. Someone gets on the Internet and shops around. After they find a product they want, they can purchase it; all they need is a credit card. They will fill out the order form and submit their credit card number with it. Then the transaction goes through a transaction sever and then to a credit company to check and make sure that the person shopping has good credit. Then, if the credit is approved, the transaction will carry on to the manufacturer or the small business and you will get a message on your computer saying the order is complete. Finally, the product will be delivered to your house via the mail. Small business owners can benefit from E-commerce by selling their products on the Internet to customers that they were not able to reach before. For example, one small company in Albuquerque New Mexico called Barnhill Bolt Co. Inc. had been selling nuts and bolts locally for the past 40 years. The company decided to sell their nuts and bolts online in 1994. The company is now getting orders from all around the country and some from overseas. "Since its web presence, the company, all 25 employees, has had total sales of 5-20 million a year" (Tribune, August '99). Small business like Barnhill Bolt Co. can also benefit from E-commerce by buying products to help run their business. This is called a "business to business" transaction on the web (Webreview). If I am a car repairman and I can buy oil filters over the web and have them delivered to my shop cheaper than buying filters locally, then I will make more profit when I work on a car. E-commerce allows for more competition so you do not have to settle for local products and prices. Another benefit of E-commerce is that it can help a small business grow into an international business. The Internet is world wide, so if you have products on-line then you can build business relationships with people overseas.

Larger retailers can also provide their products using E-commerce. This will allow for all customers, large accounts or small, to buy their products. It will help the sales representative of a corporation serve a customer that buys the same amount of the same product at a certain time of each month, otherwise called an automatic re-buy. The customer can log onto the web sight and order what he or she needs. Then the sales rep can follow up the order with an e-mail to see if everything is going all right. This will save the customer time and money as well as the sales representative.

E-commerce seems so simple, you build a web page, put your products or services on it, and then you make lots of money. So why don't all businesses use E-commerce to their advantage? Well there are some downfalls to E-commerce.

The first downfall of E-commerce is that not everyone is technology happy yet. Many people are not ready to purchase products over the Internet because they do not trust the system. "In 1996 only 14% of people actually purchased something over the net, whereas it is projected that 45% of people will actually purchase something in the year 2000" (Current Analysis). As you can see, the numbers are projected to keep increasing at a steady rate when people begin to accept technology and gain enough trust to be comfortable with the system. Nevertheless, if you have a product that people are willing to buy now, are you ready to deliver? This could be a downfall for a small business if they cannot handle all the business they receive. "Selling your product without a strong fulfillment process is bad business. Customers will just not come back if they have had a poor delivery experience" (Michaels), which will hurt any business. If you are a small business that is trying to grow and you have a bad reputation, good luck. The last downfall may not be a downfall for all. It may only be for people that are just starting a business and do not have a lot of money. The cost of having a web page built with a database for all your customers can come at an expensive price. The average web page, with a database, runs around "$500 to $800 for a simple page with one or two links and low maintenance or $2000 to $5000 with many links and high maintenance." (Christy, FHTC) If you have a small business and you spend $500 to $5000 to have a web page built, then you are going to want people to visit your site, which it could be hard to get your URL out to the public. If people do not know about your web-site, they cannot shop or do business with you on the net.

For larger businesses sales representatives, e-commerce can be harmful because it takes away from the personal touch of doing business. A salesperson cannot see the facial expressions or know exactly what the customer wants and feels by selling over the Internet. He or she still needs to make personal contact with potential customers to help the customer see the benefits in the purchase that they are about to make. The salesperson can provide detailed information about a product as well as personal testimony of the product. A customer cannot receive the full details of a product by looking at a computer screen.