I recently answered a question on Yedda, and thought my response may be valuable to others wondering about e-commerce, so I’m sharing it here as well:

Check out this interesting answer on Yedda

How can your company benefit from e-commerce?

Lames,

Its hard to answer your question accurately without more information about what kind of company (size), what line of business (segment), and that the end product is.

Furthermore its hard to quantify without understanding the present state and operation of a company that will be “enabling” e-commerce (and in essence e-business - I see you asked about this in other questions).

Lets just say for the sake of this exercise that we’re speaking of a small business that started as a small shop selling baked goods. They decide to create a website and do e-commerce. One of the biggest bets for e-commerce is a favorable ROI. Generally speaking, its expected that the investment to create the ‘electronic commerce’ channel will return at a multiple over time.

Here are the high level benefits:

1. Expanding the reach of you product/brand - By creating an online identity you can expand beyond your traditional marketing channels and be exposed to people, far and near, by ways of paid (Search Engine Marketing [SEM], Online Advertising [Banners, Sponsored Links, etc.]), and natural ‘organic growth’ (Word of Mouth, Search Engine Optimization [SEO - ranking of your page as it relates to amounts of links to it out in the internet], Bloggers, etc.).

2. Expanding the reach of your business - So all these new people who are now aware, exposed to, and interested in your products will now want to buy your products. With e-Commerce, you can have an online catalog, and shopping cart which will enable online orders. While this may prove a bit challenging at times (depending on how you ship your goods, if they are perishable, what’s the best logistical and cost effective way to ship, etc.) once you establish a system, with the right providers (UPS, FedEx, any big carrier has flexible options for small businesses) you are no longer limited to those people who see or know of your store locally.

3. Improving processes - If your operation is a relatively new, but hard working business, chances are the introduction of e-commerce will also allow for increased efficiency in your order taking and fulfillment processes as well as managing your client and partner contacts. Orders can be inputted, managed, viewed, modified and tracked on your computer, and can be made available to your customers online as well.

Ordering of ingredients, packaging, and anything else that you require to run a smoothly operating business can be inputted into your system, and you can monitor inventory as well as easily place orders using templates and view your past activity and adjust where necessary.

4. GROW YOUR BUSINESS - In summary all of the above should aid in the growth of the operation by increasing sales, customer satisfaction, leading to more production, increased margins and growth. If implemented correctly (meaning building an e-commerce platform of the right size - not too small, but also not too big and full of unnecessary components) the return on investment of going electronic should be very high.

I hope you find this information useful. Of course there are many more variables and elements to consider, but this should provide a pretty good base.

Best, Itay.

Topics: e-commerce, international trade, global sourcing, import/export

Answered by Itay. on February 01, 2008

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