Online Business

After the invention of wheel, it is the computer and the Internet that have revolutionized our world. They have touched every aspect of our lives - the way we communicate, access information, and the way we shop!

Why Do Most Home Based Businesses Fail?

The Internet has virtually erased international boundaries. It has given rise to the conceptual ‘global village’. Communications have become cheap, and are available 24x7 around the year. The business world has been quick to recognize the power of the Internet for its global reach, and the vast opportunities that it offers. Several companies have seized the initiative, and have ventured into online business all over the world.

Instant global reach enables significant savings in time. Transaction costs get reduced, as intermediaries are no longer required. A significant feature of online business is that it enables a global level playing ground to all -- size of the company really does not matter! All major, medium, and small companies have an equal opportunity to buy or sell. We are all aware of the .com boom of 1990s.

Online business

is just like doing any business in a conventional manner. It covers all business components -- marketing, sales, payments, delivery, and after-sale services.

Marketing is highly conducive and convenient for online activities like company or product introduction, product information, advertising, identifying customer needs, product promotion, and even direct selling. Emails are a cheap, convenient, and effective tool for these activities, and are widely in use.

The last decade has witnessed evolution of the concept of global e-Market places, where local and international buyers and sellers virtually meet to conduct business. This has given impetus to a variety of e-businesses depending on the focus of application.

In Business to Consumer (B2C) segment, a number of e-Retail sites, often called ‘Portals’, have mushroomed on the web. ‘e-Bay’ and ‘amazon.com’ are the well-known typical examples. These portals use multi-media e-catalogs for quick and easy identification of products/services with their specifications. Thanks to multi-media technology, one can now see as to how the product looks in a 3-dimensional view, its operation – animated or video, or hear it such as in case of music. Research is on to enable online tactile sense also to ‘feel’ the product in future. These portals invariably have a ‘shopping cart’ incorporated. Today, one can buy almost anything on the Internet from flowers and chocolates to music, jewelry, books, and gizmos of all kinds. A friend recently shared her experience of trying on dresses at an up market store across the globe, without stepping out of her home, with the help of her personal computer and a scanned photograph of herself!

In Business-to-Business (B2B) sector, a number of e-Auction sites have emerged in addition to the B2C type of portals. Tea, steel, flowers are some examples of e-auction sites for global trade. e-Auction sites are also becoming popular for B2C activities like sale of used cars, household goods, and airline ticketing.
 
Online payment mechanism is a little tricky, and is a sensitive issue because of inherent fear of fraud. Though credit cards are convenient, they need a third party authentication such as from the world-reputed ‘VeriSign’ and a few others. Most of the reputed portals do subscribe to third party authentication, but buyers must verify this to be certain.

For online delivery, delivery of ‘Soft touch’ and ‘Digital’ services like CDs, software, music etc is no problem, but ‘Hard touch’ products do require physical transportation. After sales services are commonly provided through outsourced phone and email call-centers.

Online business is supposed to eliminate the ‘intermediaries’. However, they have been practically replaced by a new breed called ‘infomediaries’ - people or agencies that provide information, and facilitate online businesses. Sectors like packaging, banking, transportation, insurance, and shipping etc. are all adapting themselves to the requirements of online business.

Online business has its share of problems – primarily lack of trust and confidence. These emanate partly from psychological problems and inertia to change from the conventional method of conducting business. The customers and sellers do not negotiate face-to-face, and they find it difficult to trust each other. Some recent fraud and scam cases have further aggravated these issues. Moreover, customers are traditionally accustomed to ‘feel and touch’ the goods to assess their suitability. Apart from these, there are issues of legal complications, country specific restrictions, currency, and spam that impede the growth of online business.

Today, online business is a reality. It is flourishing, thanks to the Internet! It is going to be the future mode of conducting most of the businesses in the world. The existing big and medium business companies, which are yet to adapt to online business, face a tough challenge. The choice for them is either to switch or to perish!