Electronics Commerce

• Electronic commerce (e-commerce) is the buying and selling of

products and services online. It can also refer to the transfer of funds
or data over the internet.
• Ecommerce works by connecting sellers with customers and allowing
exchanges to take place online. It can work in many different ways and take
many forms. Here’s a general overview of how the process can look:
• The seller chooses online selling channels, like a website or social media, and
promotes products or services for sale.
• Customers find the products or services and place orders.
• A payment processor enables the exchange of the goods or services electronically via
payment options like credit cards or digital currencies.
• The customer receives a confirmation email or SMS along with a printable receipt.
• If the transaction is for goods, the seller ships the products and sends the customer a
tracking number via email or SMS. If the transaction is for a service, the service
provider can reach out to schedule and complete the service.
• Along the way, many ecommerce tools and technologies work together to
help make online purchases possible. On the technical side, the transaction
can depend on data, logistics, warehousing, supply chains, and other
systems and processes.
 Types of e-commerce
• Business-to-business (B2B): Transactions between businesses
• Business-to-consumer (B2C): Transactions between businesses and
consumers
• Consumer-to-consumer (C2C): Transactions between consumers
• Consumer-to-business (C2B): Transactions between consumers and
businesses
• Business-to-business (B2B): B2B ecommerce refers to transactions between businesses.
In this model, businesses sell products and services to other businesses.
• Business-to-consumer (B2C): B2C ecommerce involves transitions between businesses
and individual consumers. It is the most common type of ecommerce, and includes
online retail stores that sell products and services directly to end-users.
• Business-to-government (B2G): B2G ecommerce involves transactions between
businesses and governments. Examples include government procurement portals where
businesses can bid on contracts to provide goods or services to government agencies or
departments.
• Consumer-to-business (C2B): C2B ecommerce is the inversion of the traditional B2C
model. In this type of ecommerce transaction, individual consumers offer products or
services to businesses. This model is most often seen in freelance or gig economy
platforms, where businesses can hire individuals for various tasks or projects.
• Consumer-to-consumer (C2C): Consumer-to-consumer ecommerce involves transactions
between individual consumers. In this model, individuals sell products or services
directly to other consumers through online platforms. Examples include platforms
Craigslist or Etsy, where individuals can buy and sell used items or homemade crafts.
 A few common business models are:
• B2C: Businesses sell to individual consumers, sometimes called the
“end customer.”
• B2B: Businesses sell to other businesses. Often the buyer resells
products to the consumer.
• C2B: Consumers sell to businesses. C2B businesses allow customers to
sell to other companies.
• C2C: Consumers sell to other consumers. Businesses create online
shopping destinations to connect customers.
• B2G: Businesses sell to governments or government agencies.
• C2G: Consumers sell to governments or government agencies.
• G2B: Governments or government agencies sell to businesses.
• G2C: Governments or government agencies sell to consumers.
 Advantages of E-Commerce
• Global marketing reach: E-commerce provides the sellers with a global
reach. They remove the barrier of place (geography). Now sellers and buyers
can meet in the virtual world, without the hindrance of location.
• Relatively low operating costs: Electronic commerce will substantially lower
the transaction cost. It eliminates many fixed costs of maintaining brick and
mortar shops. This allows the companies to enjoy a much higher margin of
profit.
• Accessibility and convenience: Ecommerce owes its rapid growth in part to
the ease of access to products and speed of placing purchases. Once set up,
an online store is open 24 hours a day without the need to be monitored or
staffed like a physical store. Customers can browse a broad selection of
offers from around the world, from anywhere with an internet connection,
and place purchases with just a few clicks.
• One other great advantage is the convenience it offers. A customer can shop 24×7.
The website is functional at all times, it does not have working hours like a shop.
• It provides quick delivery of goods with very little effort on part of the
customer. Customer complaints are also addressed quickly. It also saves
time, energy and effort for both the consumers and the company.
• Direct access to customers: The internet gives businesses direct-to-
consumer access along with the ability to build relationships with specific
audiences and earn customer loyalty. You can tailor your brand image and
marketing to fit customer wants and needs right down to special offers and
personalized product recommendations.
• Advances in technology: A wide range of specialists and businesses,
including Software as a Service (SaaS) providers, are continually innovating
and finding new ways to improve the online shopping experience. Emerging
technologies like artificial intelligence (AI) increasingly play a role in helping
with tasks from managing stock levels and storage to delivery and returns.
Customers can also make voice-assisted purchases, enjoy personalized
shopping experiences, try out products with augmented reality, and more.
• Electronic commerce also allows the customer and the business to be in
touch directly, without any intermediaries. This allows for quick
communication and transactions. It also gives a valuable personal touch.
• Increased selection of products. Retail brands have the flexibility to
offer a wider selection of products through their online store online
compared to their physical brick-and-mortar stores. Many retail brands
also offer consumers access to exclusive inventory and promotional
offers that aren’t available elsewhere.
• Delivery personalized experiences. E-commerce businesses can
personalize everything from onsite search to dynamic pricing and
curated product recommendations. With an AI-powered e-commerce
platform, you can upsell, cross-sell, and present products that customers
are most likely to be interested in, thereby increasing revenue-per-
customer
• International or cross-border sales opportunities. As long as a
customers can place an order online and the e-commerce store can
capture the revenue from the sale, then ship the product or service to
the customer’s location, online stores aren’t limited by geographic
location as brick-and-mortar stores are. An ecommerce store allows
your business to reach more customers, globally — maximizing selling
potential.
• Economic growth: Ecommerce has contributed to economic growth
by creating new business opportunities, stimulating innovation, and
fostering entrepreneurship in the digital economy. It has allowed for
heightened economic activity for those who might have been absent
from the global economy, including entrepreneurs in developing
countries and female business owners.
 Disadvantages of E-Commerce
• The start-up costs of the e-commerce portal are very high. The setup of the hardware and the
software, the training cost of employees, the constant maintenance and upkeep are all quite expensive.
• Although it may seem like a sure thing, the e-commerce industry has a high risk of failure. Many
companies riding the dot-com wave of the 2000s have failed miserably. The high risk of failure
remains even today.
• At times, e-commerce can feel impersonal. So it lacks the warmth of an interpersonal relationship
which is important for many brands and products. This lack of a personal touch can be a disadvantage
for many types of services and products like interior designing or the jewelry business.
• Limited interaction with customers and products: If your business relies on interacting with customers
in person, it could be a challenge to expand into ecommerce. Alternatively, if you prefer communicating
with customers via email or phone, this drawback might be a huge plus. But keep in mind customers
could be deterred by a limited ability to test out or try on products. You’ll also need a system for handling
returns or exchanges. A related challenge? If you work with a third-party fulfillment provider like
a dropshipper, you might not have the ability to inspect products and assess their quality.
• Security is another area of concern. Only recently, we have witnessed many security breaches
where the information of the customers was stolen. Credit card theft, identity theft etc. remain big
concerns with the customers.
• Then there are also fulfillment problems. Even after the order is placed there can be problems with
shipping, delivery, mix-ups etc. This leaves the customers unhappy and dissatisfied.
• Reliance on technology: While technology can be a major benefit, technical
difficulties can negatively impact sales. Just as a hiccup in your supply chain
can prevent timely delivery of products, internet issues or a hard drive failure
could cost you time and money. Remember, for every technical issue you
might encounter, there’s probably a solution or a preventative measure you
can take, like backing up your data regularly. You can also lean on the reliable
infrastructure of an established store like Amazon.
• High competition: A low barrier to entry can translate to high competition.
It’s important to select products with care and conduct thorough competitor
research to zero in on profitable product ideas.
• Once you find success in a niche, be on the lookout for counterfeiters and
other forms of infringement. Look into ways of dealing with bad actors
like Amazon’s Report a Violation tool. Available to brands registered in
Amazon Brand Registry, a free resource to help you build and protect your
brand, this tool lets you search the Amazon catalog for potential
violations of your active trademarks, copyrights, and patents.
 Examples of E-Commerce
• Amazon
• Flipkart
• eBay
• Fiverr
• Upwork
• Olx
• Quikr
 Challenges in Ecommerce
• Consistency across channels: As Omni channel ecommerce becomes the norm, it’s crucial to ensure a
consistent experience across platforms. This requires creating a seamless, cohesive set of messages and
customer interactions across various channels including social media, live chats, email, ecommerce stores,
and phone calls.
• Data security: As ecommerce collects some of the most valuable information a consumer might share –
credit cards, bank accounts, and shipping addresses – it's imperative to create solid data security practices
with built-in redundancies and strong encryption. These processes should be frequently tested to combat
fraud, cyberattacks, and data breaches.
• Global trade and compliance: Many ecommerce organizations sell goods over international borders,
meaning they’ll interact with myriad regional regulations. These might include data protection laws (such
as GDPR), product safety regulations, and local laws around taxation, all of which need to be assessed and
complied with.
• Market saturation and rising consumer expectations: Particularly since 2020, when the popularity of
online shopping exploded, consumers have high expectations for vendors. Legacy ecommerce
organizations face competition from DTC outfits and smaller vendors, while customers increasingly want
perks like free returns and same-day shipping.
• Supply chain management: Managing inventory and order fulfillment, depending on the size of the
business, can be a challenge in itself, particularly if an organization is engaging multiple suppliers.
• Technical issues: Downtime and technical glitches can be devastating for an ecommerce business, not only
in terms of lost sales but in consumer trust. Managing several channels at once and ensuring a seamless
 Components of e-commerce Infrastructure

• E-commerce infrastructure is the software, hardware, network, and services

that support an online store. It includes components like payment
gateways, web servers, and content delivery networks (CDNs).
• When choosing an e-commerce infrastructure, you can consider things like:
• Scalability and flexibility: Whether the infrastructure can meet growing demand
• Security: Whether the infrastructure has adequate security measures
• Technical compatibility: Whether the infrastructure is compatible with the technical
needs of your business
• Cost-effectiveness: Whether the infrastructure is cost-effective for your business
• Payment gateways: Should accept multiple payment methods, meet security
standards, and reduce friction at checkout
• Web servers: Store and serve pages to users, and process HTTP requests from
browsers. This is a system that stores data, such as customer information, routinely.
It helps restore the system to the last saved state in the event of a system failure.
This ensures that the business can quickly and easily recover from any potential data
loss. Backup systems can also be used to transfer data from one system to another,
allowing for greater flexibility.
• Content delivery networks (CDNs): Distribute content to edge locations around the
world to improve page load times
• Order fulfillment and logistics / Shipping and Fulfillment: Flexible solutions are
needed to manage increasing order growth. In ecommerce, shipping and fulfillment
refer to the process of receiving, processing, and shipping orders to customers. It
also includes shipping tracking and order fulfillment.Shipping and fulfillment are vital
for any online business to be successful. This makes sure customers get their orders
quickly and are happy with them.
• Some examples of providers that offer this service, ShipBob, ShipStation, Fulfillment by
Amazon (FBA), Deliverr, etc.
• Scalability/Load Balancing: The ability of the infrastructure to perform well under increased
workload. This is a process for distributing incoming traffic and requests across a group of
servers. It helps to improve the performance of an ecommerce system. This gives no room
for failure in the system and ensures the system can handle the increased demand from
online shoppers. It also helps to prevent any server from becoming overloaded with requests
and also helps to improve customers' shopping experience.
• API (application program interface): A protocol or tool for building software applications
• Network: Provides the communication path between users, processes, applications, and
services
• Security and Fraud Prevention: Protecting ecommerce websites from cyber-attacks and
fraudulent activities is important. To protect customers, use fraud protection technologies
like SEON, Signifyd, Kount, Cybersource, and more. For the safety and security of customers
and their data, ecommerce security and fraud prevention are crucial.
• Backup System: This is a system that stores data, such as customer information, routinely. It
helps restore the system to the last saved state in the event of a system failure. This ensures
that the business can quickly and easily recover from any potential data loss. Backup systems
can also be used to transfer data from one system to another, allowing for greater flexibility.
• Customer Service: Customer service in ecommerce is providing
support to customers before, during, and after a purchase. This helps
customers find what they need, provides shipping and delivery info,
and also resolves order issues. This is critical for any ecommerce
business.
• Inventory Management: This is the practice of tracking and
controlling the inventory of a business’ product. It includes
maintaining stock levels, ordering new products, and tracking sales. It
is important to keep accurate records of inventory to ensure customer
satisfaction and product availability. Inventory management helps
protects against loss due to theft or damage and can help identify
areas of opportunity to improve efficiency.
Communication network for electronic commerce
• Communication networks used for electronic commerce include the
internet, intranet, and extranet. These networks allow computers to
connect to each other, enabling communication and data transfer.
• Types of communication networks for electronic commerce
• Internet: A network that connects computers to each other.
• Intranet: A network that allows employees to communicate with
each other.
• Extranet: A network that connects buyers and suppliers to
coordinate activities.
How communication networks are used for electronic
commerce
• Electronic funds transfer (EFT): A system that allows buyers to
electronically transfer money to sellers.
• Electronic communication network (ECN): A system that automatically
matches buyers and sellers of securities.
• Online auctions: A consumer-to-consumer (C2C) platform that allows
buyers and sellers to transact online.
• Classified advertisements: A C2C platform that allows buyers and
sellers to transact online.
• Social media: A channel for marketing and promotion strategies.
• Email marketing: A channel for marketing and promotion strategies.
• Website content: A channel for marketing and promotion strategies.
Payment systems for electronic commerce
• E-commerce payment systems are digital methods for customers to
pay for goods and services online. They include credit cards, debit
cards, digital wallets, bank transfers, and cryptocurrency.
 Disadvantages of Electronic Payment System

• Security Concerns: Electronic Payment Systems are susceptible to

security breaches, including hacking, phishing, and identity theft.
• Technical Issues: Electronic Payment Systems rely on technology, and
technical glitches or system failures can disrupt transactions.
• Fraud Risk: Despite security measures, Electronic Payment Systems
are not immune to fraud. Unauthorized transactions, stolen
credentials, or fraudulent activities can occur, leading to financial
losses for individuals and businesses.
• Privacy Concerns: Users may be concerned about the collection and
storage of personal information by electronic payment providers.
• Transaction Fees: Some electronic payment systems impose
transaction fees, which can add up over time.
 Impact of electronic commerce on Business
E-commerce has had a significant impact on businesses, including small businesses,
by increasing revenue, reducing costs, and improving customer experience.

Revenue
• Increased sales: E-commerce allows businesses to reach a wider audience, which
can lead to increased sales and revenue.
• New markets: E-commerce allows businesses to access global markets and tap into
new markets.
Cost
• Lower operational costs: E-commerce allows businesses to reduce the cost of rent,
utilities, and other overhead costs.
• More targeted marketing: E-commerce allows businesses to reach their specific
audience at a lower cost than traditional advertising.
• Customer experience
• Better accessibility: E-commerce allows customers to shop
whenever convenient, which can improve the consumer
experience and sales potential.
• Faster buying process: E-commerce allows customers to browse
websites online and buy products without having to leave home.
• Other benefits
• Visitor tracking and analytics: E-commerce allows businesses to
track visitors and analyze their behavior.
• Faster time to market: E-commerce allows businesses to respond
faster to buyer and market demands.
• Expanded Market Reach and Global Accessibility: One of the most
significant impacts of ecommerce on business is its ability to break
down geographical barriers, providing businesses with access to
global markets.
• Global Access: Before e-commerce, businesses were often limited to local or
regional markets. Today, even small businesses can reach international
audiences, opening up new revenue streams and growth opportunities.
• Niche Markets: E-commerce allows businesses to cater to niche markets by
connecting with specific customer segments, regardless of location. Products
that might have limited demand locally, like eco-friendly goods or specialized
gadgets, can find a global audience through online platforms.
• Increased Competition and Innovation: The impact of e-
commerce on business has intensified competition, driving
innovation across industries.
• Competitive Landscape: The low entry barriers of e-
commerce allow new businesses to enter the market easily.
This has increased competition, pushing companies to
continuously innovate to stay relevant. In this competitive
space, businesses that fail to adapt risk being left behind.
• Innovation in Product and Service Delivery: Many e-
commerce businesses are experimenting with new business
models, such as subscription boxes, dropshipping, and direct-
to-consumer (DTC) approaches. These innovations have
expanded product offerings and improved the overall
customer experience.
New Employment Opportunities: The growth of e-commerce has
created a wealth of new job opportunities.
• Job Creation: E-commerce has increased the demand for digital
marketing specialists, software developers, logistics managers, and
customer service representatives. These roles are essential for
businesses to successfully operate online.
• Gig Economy Growth: The expansion of e-commerce has also fueled
the gig economy, with freelancers offering specialized services in
content creation, digital advertising, and last-mile delivery.
• Challenges and Risks of E-commerce: While e-commerce offers many
benefits, it also presents certain risks that businesses must address.
• Cybersecurity Concerns: The rise in online transactions has
increased the risk of cyberattacks, making cybersecurity a top
priority for businesses. Protecting customer data and ensuring
secure transactions are essential for maintaining trust and
credibility.
• Rising Consumer Expectations: Consumers now expect faster
shipping, seamless returns, and excellent customer service. E-
commerce businesses must meet these demands to retain
customer loyalty and stay competitive.
• Impact of E-commerce on Business Strategy: The impact of e-
commerce on business strategy has been profound, pushing
companies to adopt digital tools and strategies.
• Digital Marketing and SEO (Search Engine Optimization): In today’s
e-commerce-driven world, digital marketing is an essential
component of business strategy. Companies invest in SEO, content
marketing, and social media to drive traffic and increase their
online visibility. This allows businesses to reach their target
audiences with precision.
• Data-Driven Business Strategies: Businesses now rely on data to
inform every aspect of their strategy. From product development
to pricing and customer engagement, data analytics enables
companies to make informed decisions and adjust to market
trends in real time.
• Impact of E-commerce on Business Models: E-commerce has
significantly reshaped business models, enabling new ways of selling
products and services.
• Shift to Digital-First Models: The shift from traditional, in-store
shopping to digital channels is one of the most transformative
impacts of e-commerce on business models. Companies can now
operate solely online or use hybrid models that combine digital
and physical retail.
• Emergence of New Business Models: E-commerce has introduced
various new business models, such as dropshipping, subscription-
based services, and direct-to-consumer (DTC) models. Each of
these models offers businesses new ways to generate revenue and
reach customers.
 • Legal Issues faced by E-commerce Businesses
• Terms of Service/Policies: If the terms of Service or Policies are not clear, then the business might face legal hurdles. Having a clear, lawful
policy regarding the use of the site, purchases, returns/refunds, privacy practices, etc., helps in avoiding any future legal issues. Having
well-drafted terms of services and policies acts as a contract with users and helps in preventing any future dispute.
• Intellectual Property Infringement: If someone uses the intellectual property of another company without the consent of that company,
then the other company can claim damages in huge amounts for infringement. Hence, intellectual properties should be handled with care
and protection such as Trademarks, Copyrights, Patents, etc., to protect the brand assets and avoid infringing on others. Licensing issues
may also apply in such cases.
• Data Security and Privacy: Most e-commerce platforms contain sensitive information of customers which is mostly collected via contact
forms, through customer registrations. If the regulations regarding data protection are not followed, then it may cause data privacy
concerns. Following regulations regarding securing sensitive user data stored on the systems helps to prevent cyber attacks and leaks.
• Tax Compliances: Navigating complex sales tax laws, especially if selling products in multiple U.S. states or internationally may require tax
collection, reporting, and audits. Not complying with the prescribed rules and regulations might lead to serious legal implications. Hence,
in order to avoid any legal tax implications, tax laws should be followed mandatorily.
• Advertising/Marketing Regulations: Unauthorized sellers cannot resell the products legally that differ from the original product. Every
business must ensure truth in advertising claims, proper disclosures, CAN-SPAM compliance for emails, etc. Issues like fraud could lead to
consumer class action suits. Adhering to safety standards, labelling and warning requirements to avoid injury lawsuits if selling physical
goods. Hence, all the marketing regulations and laws should be strictly followed in order to avoid any legal issues related to the marketing
procedure or products.
• Accessibility: E-commerce websites must be accessible to the customers in the most smoothest way. There should not be any complexities
or disabilities while using the site, and all the laws must be followed before initiating any site. Violations of the laws could lead to
enforcing lawsuits in some industries as well, giving rise to future legal hurdles.
• Contract Management: A contract is the most essential form of any business and is treated as a safeguard against any complication that
arises. If the clauses in a contract have any ambiguity, in such cases, it becomes complex to handle disputes arising in business. A well-
drafted contract without any confusion protects the interests of the business in case of disputes.
• Consumer Protection Act, 2019: The Act seeks to protect consumer rights against unfair trade practices and
liability for defects. E-commerce businesses must comply with the consumer protection laws in India.
• Information Technology Act, 2000: It is a primary legislation that deals with data privacy and reasonable
security practices. The act provides legal recognition of electronic contracts and digital signatures.
• Goods and Service Tax (GST) Act, 2017:m E-commerce businesses involved in the selling of goods or services
are subject to the provisions of the GST Act, which imposes a tax on the supply of goods and services. The act
requires E-commerce platforms to register under the regime of GST and collect appropriate taxes from the
customers.
• Copyrights Act, 1957: E-commerce business faces issues related to Copyright and Trademark infringement.
The Copyrights and Trademarks Act, of 1957 gives protection to the owners of Intellectual Property Rights
and allows them to take legal action against infringers.
• Indian Contract Act, 1872: The act governs contracts that are made electronically; i.e., E-contracts, and
provides certain guidelines for the protection and regulation of Electronic Contracts.
• Indian Penal Code, 1860: Various cybercrimes such as hacking, cyberstalking, identity theft and data theft are
mentioned under the act and punishment for these offences is also provided under the same.
• Information Technology (Intermediary Guidelines) Rules, 2011: Guidelines for the intermediaries, such as e-
commerce platforms and social media platforms are provided in order to protect the privacy and data of the
users.
• Consumer Protection (E-commerce) Rules, 2020: These rules state the responsibilities of e-commerce
towards consumers, mainly providing accurate information about the product or services, grievance redressal
mechanism, etc
 Ethical issues in E-commerce
• Online Piracy: It's when an unauthorized party takes ownership of
electronic intellectual property. This may happen out of ignorance of the
law. In other cases, it may accidentally happen.
• Imitative Logos. Your logo is an essential part of your branding. It's designed to
represent your business to your target audience. To spend less, others copy an
already existing design.
• Plagiarized Content. Starting businesses might not have enough budget for
content marketing. They may copy blog posts, newsletters, product descriptions,
captions, etc.
• Image And Video Theft. High-quality photos are a must for an excellent website.
Copyrighted videos are also important for advertising. These marketing tools can
be expensive. Some people think it's better to steal them for their own website.
• Be original: Create your own content. Hire content writers, photographers, and
other content creators to create something new for you.
• Web Tracking: Online companies track individuals' movement on their
web activities with log files.
• They will use the data to install software that can pluck relevant information
from files in-house.
• The tracking software and the special files called cookies can monitor your
customer's stored tracking history.
• Vulnerable Data Lakes: A data lake is a storage of a large amount of
raw data.
• It may sound like a good thing. But don't be fooled!
• Data lakes are like hoarding data subjects, and I hope they may be useful
someday.
• And they are prone to security breaches.
• Cyber-Squatting: This refers to registering an existing domain name
with the intent of selling it for a higher price.
• The people who do this are called cyber squatters. They usually target well-
known organizations.
• The person or firm registers and purchases an organization's domain. Then,
they will extort the original trademark's owner. The payment occurs when
they get the price they ask for.
• To protect your business, you can leverage authentication and non-
repudiation.
• Web Spoofing: This electronic deception relates to an attacker
creating a fake website. They will make it look like the original website
to bait customers for their credit card details.
• With a fake website, they can reveal the credit card numbers of your
customers. They can also access personal details belonging to customers,
such as bank account details.
• For instance, the bogus website can be called amaz0n.com. They use the
number "0" instead of the letter "O".
• Unsuspecting visitors will enter their information unknowingly.
• Email Spamming: Spamming means when attackers send users a
bogus email that contains viruses or malware. Malicious programs
delivered quietly can steal information on your computer.
• It can also include clickable links that defraud them. This activity is called
phishing.
• Others also broadcast unwanted advertisements to customers.
• To avoid phishing and impersonation attacks from your domain, it's important
to establish solid email security
• Unreliable Customer Service: When customers have issues or
questions about your product or service, they will contact you.
• And as a standup business, you commit yourself to providing the best
customer service.
• Unethical businesses, however, do the opposite. They may decline to answer
emails or any other communication efforts.
• With their refusal, they hope that the customer will just give up on their
issue.
• That means it will be too late for them to request a chargeback from their
credit card company.
• Counterfeit Products/Services: Selling knock-offs is not only illegal, it
hurts both creators and consumers. Uphold intellectual property rights,
source authentic products, and be vigilant against counterfeiters. Protect
your brand and ensure genuine quality for your customers.
• Unclear Return Policies and Hidden Costs: Surprise returns shouldn’t be
a nasty surprise for anyone. Make your return policy clear, easy to
understand, and fair. Avoid hidden restocking fees or complicated
procedures that discourage returns. Remember, a smooth return
experience fosters trust and repeat business.
• Ignoring Customer Concerns: Communication is key! Don’t leave
customer complaints unanswered or buried in complex support systems.
Listen attentively, respond promptly, and offer genuine solutions.
Remember, happy customers are your biggest brand ambassadors.
Ethical Benchmarks Your e Commerce Brand Needs To Follow

• Transparency. By being transparent, you let your customers know what data
you are collecting and what you will use it for. Display your data policy to be
more trustworthy.
• Integrity. Your foundation should have clear policies and guidelines for you
to follow. That way, you can rightly manage any wrong behavior.
• Trustworthiness. Fulfill all your promises and commitments to your
customers.
• Respect. Value your customers' rights and privacy. Protect their information
to the standard of your country's laws.
 Electronic Data Interchange
• Electronic Data Interchange (EDI) is the computer-to-computer
exchange of business documents in a standard electronic format
between business partners.
• Electronic data interchange is the concept of businesses electronically
communicating information that was traditionally communicated on
paper, such as purchase orders, advance ship notices, and invoices
 Advantages of EDI Systems
• Lower Costs
• Reduced Errors
• Increased Speed and Accuracy
• Increased Efficiency
• Improved Relationships with Customers & Partners
• Increased Data Security
• Improve Data Exchange
• Improving Relations with Customers and Partners
• Improve Visibility & Access to Real-Time Data
• Better Scalability
• Gain a Competitive Advantage
• Standardize Formats to Simplify Data Exchange
• Increase Employee Productivity
• Reduce Carbon Footprint
• Lower Costs: EDI systems eliminate business processes such as paper
handling, printing, storing, and mailing documents thanks to its ability to
exchange data through computer systems. In this way, EDI enables businesses
that exchange large amounts of documents each month to save significant
costs.
• Reduced Errors: Using an EDI system automates manual data entry,
eliminating paper-based processes. This significantly reduces the occurrence
of human errors during manual entry. As a result, EDI provides businesses
with fewer errors, greater accuracy, and improved customer service.
• Increased Speed and Accuracy: EDI solution enables transactions to be
processed electronically, helping to enter data faster and more accurately.
This eliminates the time loss and high error rate of paper-based manual
processes.
• At the same time, Electronic Data Exchange Automation helps businesses
verify data thanks to its advanced technology. The accuracy rate obtained
by the enterprises also ensures that the operations are carried out quickly.
• Increased Efficiency: EDI helps businesses focus on other areas of their
operations by reducing the time spent manually processing orders and data.
Reduced costs, reduced human errors and faster data processing enable
businesses to increase productivity and profitability.
• Improved Relationships with Customers & Partners: Use EDI enables businesses
to process customer orders quickly and accurately, resulting in faster delivery
times and better customer service.
• Increased Security: Electronic Data Exchange Automation uses encryption and
authentication technologies to prevent unauthorized access. In this way, it is
much safer than traditional paper-based methods. Enhanced security creates a
secure environment for information exchange by protecting businesses from data
breaches and other security threats.
• Improve Data Exchange: One of the advantages of EDI is that it increases the data
accuracy of businesses. Since EDI eliminates manual data handling processes, the
margin of error is reduced. By improving data exchange, it increases the reliability
of business data, improves decision-making and helps gain customer trust.
• Improving Relations with Customers and Partners: Implement EDI enables
businesses to process orders or other business documents accurately and
quickly. This reduces the time and manual effort needed for data exchange.
Relationships with customers and business partners are more solidly based
and relationships are strengthened.
• Improve Visibility & Access to Real-Time Data: EDI increases transparency
and end-to-end visibility into business processes. Businesses gain access to
accurate and up-to-date data on supply chain activities. With an integrated
EDI system, businesses can streamline inventory planning, improve demand
forecasting and enhance decision-making.
• Better Scalability: The EDI system can scale with the increase in business
volumes of businesses and adapt to changing needs. Thus, businesses can
manage their processes without compromising performance and efficiency.
• Gain a Competitive Advantage: In the highly competitive business-to-
business world, organizations need every advantage they can get over
their competition. EDI helps companies stay competitive and stand out in
the marketplace, thanks to its streamlined, accurate, secure, and effective
process. By improving visibility and efficiency across the entire supply
chain process, EDI speeds up business processes and provides a
competitive advantage.
• EDI also makes partnering with new businesses easier because it is convenient for
both parties to send and receive documents electronically, securely, and quickly—
even from across the globe—making a business more attractive to customers than
others in the industry.
• Standardize Formats to Simplify Data Exchange: By relying on industry-
approved and standardized formats for data exchange, EDI systems help
businesses streamline processes, provide consistency, and ensure uniform
transactions and communications across different systems and partners—
simplifying data exchange.
• Increase Employee Productivity: EDI systems automate repetitive tasks and replace
paper-based transactions with an electronic counterpart, increasing speed, accuracy,
and efficiency of business processes. Thanks to this automation, EDI frees up
employees from dedicating time to mundane activities and instead allows them to
focus on value-added, revenue-generating activities, increasing employee
productivity across departments.
• Reduce Carbon Footprint: Eliminating paper-based processes means that EDI systems
help businesses reduce their carbon footprint, cut down on waste, and contribute to
environmental sustainability.
• Streamline Supply Chain Operations: EDI touches every part of the supply chain,
from facilitating collaboration between suppliers and manufacturers to shortening the
time it takes to process and fill orders. With an integrated EDI system, businesses can
optimize supply chain operations and streamline the order process.
• Boost Business Performance: A centralized, optimized EDI system allows
organizations to keep up with today’s fast-paced business processes and high
customer expectations as well as provide a boost in performance—especially when
compared to outdated systems.
Limitations of EDI
• Cost of Implementation: EDI indeed provides massive cost savings benefits, but for small
businesses, re-designing and implementing software applications to fit EDI into current
applications can be pretty costly. Such limitations of EDI must be considered if you plan on
implementing such a system.
• Electronic System Safety: EDI also necessitates substantial investment in computer networks
and security systems for maximum security. Any EDI system installed would require protection
from hacking, malware, viruses, and other cybersecurity threats.
• Preliminary Setup Consumes Time: Not only is the implementation of the EDI system
expensive to install, but it also consumes a considerable amount of time to set up the essential
parts. Thus, such limitations of EDI can hinder the fast-tracking of services if urgently required.
• Several Standards to Maintain: Numerous businesses looking to implement EDI also consider
the several standards involved. These limitations of EDI do not allow small businesses to
exchange data with larger establishments that make use of the latest edition of a document
standard. Some known measures include ANSI ASC X12, GS1 EDI, HL7, TRADACOMS, and
UN/EDIFACT.
• Suitable Backup System: EDI implementation also requires regular maintenance, as the
business functionality is highly dependent on it. A robust data backup system is needed in case
of a system crash or for statistical purposes. Implementing EDI’s limitations can cost a
substantial amount.
• Proper backup should be maintained as the whole data depends on
EDI. In case of any crash of EDI system, proper backup has to be
maintained and extra cost is required for it.
• Limit your trading partners: Some organization stops doing business
which don’t use EDI. For instance, Wal-Mart prefers to do business
only with those organization which uses EDI.
Measures of Implementing EDI Success Factors

• The Degree of Acceptance of EDI Within Your Business: EDI execution

encompasses more than just one business setup. This implies that every
partner or possible trade exchange has to be considered differently
from your general EDI implementations. You are required to plan along
and determine what future services can be added to the system. A list
of non-technological and technological factors can be identified by top
personnel within your business as to what is central to a successful EDI
implementation.
• The Degree to Which The Systems Meet Objectives: Every organization
needs to decide at the preliminary stage the level of EDI
implementation success required to be considered a victory. Your
average organizational experience with EDI-based systems also matters
as it is usually regarded as key to their operation. It is also believed that
all EDI applications involve more than technological matters.
• Fiscal Payback: EDI is not just about achieving cost savings measures. To enjoy the
most benefits of EDI, the implementation must focus primarily on solving business-
related problems. If this measure can be achieved, then your business can avail
itself of the excellent benefits of EDI, such as more effective processes.
• Level of Integration With Current Systems: The critical area of transformation
acknowledged by most businesses is the additional complexity brought in by EDI. It
extends beyond any organizational boundary and value-added links. This measure is
a necessary change that affects functions and processes within your business and its
transverse border.
• The level of integration with current systems raises questions such as: What additional
concerns are created? How willing are you to change your compatibility, planning, and trust
process?
• Present Level Of EDI Usage: During the early stages of execution, non technological
and technological factors are equally important to your workforce’s skill set.
Nevertheless, once the EDI platform is in place, non technological factors assume
more importance than other technological factors. These factors are known to
cause more problems, thus forming a critical measure that needs tackling.