Small Businesses and E-commerce

3490 Words7 Pages

Abstract: It is puzzling why so few small businesses have attempted to make it in the Internet ‘gold’ rush. Apart from an unprecedented access to information, the Internet has also provided unprecedented economic opportunities that have accelerated the pace of business innovation. Business-to-business and business-to-consumer transactions can occur, without regard to geographical location, over the virtual business transaction table that the Internet affords. In 1998, the Internet economy alone generated an estimated $301 billion in revenue. In spite of such economic evidences, however, only 22% of the 24 million US small businesses that exist conduct business transactions online or take advantage of the economic opportunities of the Internet. A Merrill Lynch study states that to survive in the evolving economy, small businesses must attain market share online. The fact that small businesses are thus failing not only to take advantage of the economic opportunities, but also to negotiate their survival must stem deeper than the simple explanation of ignorance or a lack of appreciation of Internet opportunities that are easy to employ to explain this situation. This paper attempts to determine the major issues at play in determining who participates and who does not on the e-commerce/Internet play field. It also offers a few suggestions of how some of these issues may be resolved to even the unbalanced scales that now exists between small and large businesses participation in e-commerce.

E-commerce is simply the ability to conduct business and personal transactions over the Internet. One of the most popular forms of e-commerce is business-to-consumer transactions where a company or business sells its products and services to a consumer over the Internet. Some examples of this type of e-commerce are Amazon.com, Nobles.com and CDNow.com. Albeit the popularity of this kind of e-commerce, the majority of e-commerce transactions are of the business-to-business (B2B) kind where sales occur between businesses [1].

E-commerce has attracted many businesses because of its ability to make them more efficient. It eliminates the hassle of manually monitoring the requests and orders of customers over the telephone, thereby freeing employees to engage in other tasks. Through websites, a local or nationwide business operation has a potential global customer base that spans every country connected to the Internet. The Internet removes many of the geographical limitations that stymied businesses before, giving them the potential to act on a global scale.

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