Benefits and Limitations of e-Business: Disadvantages, Solved Questions

The compilation of these Emerging Modes of Business Notes makes students exam preparation simpler and organised.

Benefits and Limitations of e-Business

Nowadays you can order anything online. You can find everything from a toothbrush to a TV. Progress in technology and the growth of e-commerce has given us this benefit. But what exactly is e-business? Is it beneficial for businessmen? Are there any limitations or disadvantages or limitations of e-Business? Let’s find out.

Introduction to E-business

Benefits and Limitations of e-Business

E-business stands for electronic business. Electronic business is also known as online business. Online business is a business where the transaction takes place online. Here, the buyer and the seller don’t meet personally. The term “e-business” was coined by IBM’s marketing and Internet team in 1996. E-business is a part of e-commerce. E-commerce means electronic commerce.

Advantages of e-business

There are actually innumerable advantages of e-Business, the most obvious one being the ease of doing business. Some of the major advantages of e-business are as follows :

Easy to Set Up: It is easy to set up an electronic business. You can set up an online business even by sitting at home if you have the required software, a device, and the internet.

Cheaper than Traditional Business: Electronic business is much cheaper than a traditional business. The cost taken to set up an e-business is much higher than the cost required to set up a traditional business. Also, the transaction cost is effectively less.

No Geographical Boundaries: There are no geographical boundaries for e-business. Anyone can order anything from anywhere at any time. This is one of the benefits of e-business.
Government Subsidies: Online businesses get benefits from the government as the government is trying to promote digitalization.

Flexible Business Hours: Since the internet is always available. E-business breaks down the time barriers that location-based businesses encounter. As long as someone has an Internet connection, you may be able to reach and sell your product or service to these visitors to your business website.

Limitations of e-Business

But it isn’t all good news. E-business does have certain disadvantages when compared to the traditional way of doing business. Some of the limitations of e-business are as follows:

Lack of Personal Touch: E-business lacks the personal touch. One cannot touch or feel the product. So it is difficult for consumers to check the quality of a product. Also, the human touch is missing as well. In the traditional model, we have contact with the salesperson. This lends it a touch of humanity and credibility. It also builds trust with the customer. An e-Business model will always miss out on such attributes.

Delivery Time: The delivery of the products takes time. In traditional business, you get the product as soon as you buy it. But that doesn’t happen in online business. This lag time often discourages customers. However, e-businesses are trying to resolve such issues by promising very limited delivery times. For example, Amazon now assures one-day delivery. This is an improvement but does not resolve the issue completely.

Security Issues: There are a lot of people who scam through online businesses. Also, it is easier for hackers to get your financial details. It has a few security and integrity issues. This also causes distrust among potential customers.


Question 1.
What are the various concerns for E-COMMERCE?
Some of the concerns of e-commerce are as follows:

  • Increased competition
  • Security
  • High start-up cost
  • Slow adoption
  • Customer Relations Problems
  • No human interactions
  • Returning Goods
  • Fraud

Question 2.
Automobile parts are being purchased from ABC company, by placing an order through its website.
This is an example of ________
a. viral marketing
b. network marketing
c. BPO
d. e-commerce
The correct answer is the option “d”.
E-commerce or electronic commerce, a subset of e-business, is the purchasing, selling, and exchanging of goods and services over computer networks (such as the internet) through which transactions or terms of sale are performed electronically. E-commerce includes buying and selling goods, information, and services using a network of computers.