Do Business Well

Service organizations will grow up that will enable demand for ordering and delivery to be met continually. Production will be the only variable. Let me explain. There is a relatively finite amount of purchasing power in the world at any one time. There is also a finite amount of time to view and order products. This means that if there was only one shop to order from it would be relatively easy to build a process and an infrastructure that could cope with the total demand for dealing with orders, complaints, payments, deliveries and returns.

This is how postal delivery services work. They know how many homes there are and organize delivery men to deliver each day to a certain percentage based on the general level of demand. Most of the time there is sufficient slack built into the system to cope with demand blips. This may just mean the delivery people working a little faster or longer occasionally. Continue Reading »

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Disadvantages

 

Retailers have been slow to take up e-Retailing. This is to some extent under standable in the light of the many disadvantages and problems. Retailers, for example, may lack the technical know-how, the substantial investment required or the order fulfilment capabilities. Set-up costs start from around £20,000 fo a small site, up to £500,000 for a large operation. And set-up costs are only th start: Datamonitor estimates that high street retailers are spending more o ongoing costs than on setting up new sites.

 

DISADVANTAGES OF E-RETAILING FOR RETAILERS

 

* May lack know-how and technology

• Substantial set-up, investment and ongoing costs

* Complex logistics of fulfilment

• e-Selling less powerful than face-to-face — uptake slow for goods selected by taste or smell

* Fewer impulse purchases

 

* Legal problems

 

Less role for traditional high street retail expertise

• Pressure on margins and prices in-store

* After-sales care difficulties

 

There can be legal problems. For example, if purchaser and supplier are ni_l
different countries, there may be conflict between the laws of the two countries.’
A further disadvantage is that e-Selling is less powerful than face-to-face selling

(it is easier to say ‘no’ to a computer). This viewpoint is linked to a concern of raditional high street retailers that e-Retailing offers a diminished role for their expertise. For example, there are obvious difficulties with products sold by `atmosphere’ — touch, feel, smell — and with impulse purchases. In addition, consumers have a perception of lower prices online. This puts pressure on margins for e-Retailing, and can lead to shoppers expecting consistent low prices in store. Finally, after-care can be difficult, especially if the shopper is overseas.

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