Opportunities and challenges for ecommerce entrepreneurs

Entrepreneurship is regarded as a major force of invention in the United States. Throughout history, entrepreneurial activity has helped hike the economic system, introduce new thoughts to the market place and create occupations for Americans. From hi-tech start-ups in Silicon Valley to mom and start shops in little towns, this entrepreneurial spirit has made a profound impact in determining the state ‘s economic landscape.

It can be argued that the true grade of the enterpriser is that of creativeness and risk-taking – believing in an thought and transporting it to its hopefully profitable terminal, and in the procedure making new avenues for self-growth and perchance even new ways of making concern. This holds true for many success narratives in American endeavor, from the birth of fast nutrient to Google ‘s omnipresent hunt engine.

Therefore it is no surprise that the United States besides pioneered the widespread acceptance of the Internet as a new tool for enterprisers and concerns. That these inter-related webs traversing international boundaries and crossing 1000000s of users can be tapped and used as a platform for selling goods and services and presenting new thoughts speaks of a wholly new age in making concern. This new activity came to be known as e-commerce.

Consequently, many persons and concerns decided to prosecute in e-commerce activities, developing their online presence that catered to users and their assorted demands. Such attempts met with changing grades of success, with some companies successfully using what e-commerce has to offer and gaining from it as others finally fell victim to hype and ill-conceived concern theoretical accounts, the companies formed during the point com bubble being the most ill-famed illustration.

Given that e-commerce is a new construct, it is apprehensible that little and average concerns and large companies likewise will run into battles along the way of following and prolonging e-commerce activities. With this in head, this paper aims to place some of the chances and challenges presented by e-commerce, and how they can lend to the success or failure of enterprisers trusting to acquire a piece of the Internet pie.


Development of E-commerce

Kevin Kelly ‘s August 2005 article for Wired magazine provides a comprehensive history of e-commerce and the Internet as a whole. In it, he describes the initial reluctance and incredulity of large concerns, IT experts and the National Science Foundation ( NSF ) , the organisation that runs the Internet ‘s anchor, in the commercial chances of the Internet. He notes how many minds at the clip expressed their uncertainties about the mainstream entreaty and credence of the Internet every bit good as their concerns about the Internet being under the control of a few big companies if it was to be opened to commercial activities.

In his analysis, two events efficaciously ushered in the epoch of the Internet as we know it today. The first being the NSF ‘s remotion of the prohibition against commercial activity within the Internet, and the 2nd, go oning merely three months subsequently, was the initial public offering of Netscape, developers of the Mosaic browser which was the most advanced Internet browser at the clip ( Kelly, 2005 ) . These developments efficaciously sent the message that the Internet is ready for the universe, and as Kelly points out ( 2005 ) , early concerns about the costs of bring forthing content for a immense figure of users and the possible usurping of large concern were overtaken by the sheer enthusiasm and engagement of consumers in charting their ain Internet options.

Since so, the Internet has managed to go a major lending factor to many advanced economic systems, peculiarly the United States and much of Europe ( Dholakia, Fritz, Dholakia, & A ; Mundorf, 2002, p. 1 ) . Dholakia et Al. besides sees the Internet as paving the manner to a new ‘infrastructure revolution, ‘ that has since created new markets and transformed bing 1s while changing current selling constructs and patterns ( 2005, p. 31 ) .

However, Jackson et Al. show a much more treated position and argue that the ballyhoo about e-commerce does non fit cold difficult economic facts, mentioning the little part of e-commerce to overall Gross Domestic Product of advanced states ( Jackson, Harris, & A ; Eckersley, 2003, p. 19 ) .

Forms of E-commerce

Harmonizing to Jackson et Al. ( 2003, p. 20 ) , there are four chief signifiers or theoretical accounts of e-commerce as defined by the nature of minutess involved. Business-to-Business ( B2B ) pertains to those between manufacturers. Business-to-Consumer ( B2C ) refers to the minutess between manufacturers and consumers. Meanwhile, less studied in e-commerce literature are the Consumer-to-Consumer ( C2C ) and Consumer-to-Business ( C2B ) theoretical accounts. C2C indicates the exchange of merchandises and services between consumers themselves, frequently through auction sites such as eBay. C2B involves the sale of goods or belongingss by consumers to companies, such as autos or existent estate. From here on, this paper shall concentrate chiefly on the Business-to-Consumer ( B2C ) theoretical account unless otherwise indicated.

E-commerce Ethical motives and Regulations

Merely as in traditional concerns, e-commerce enterprisers are capable to concern moralss and Torahs. Peeples ( 2002 ) suggests that complete ordinance of the Internet and the activities that exist within it may merely be impossible. However, she reports that there are several ethical ushers and criterions that are being developed by organisations such as the Better Business Bureau, Electronic Retailing Association and Online Privacy Alliance as footing for concern activities online and screens such heatedly debated issues as client privateness, security of fiscal minutess, individuality larceny and fraud.

Jackson et Al. ( 2003, p. 149 ) do some recommendations on how enterprisers can organize their ain codifications of behavior in e-commerce. They suggest audience among all stakeholders, equilibrating between rights, responsibilities and single involvements and freedoms, expectancy of future struggles, allowance for freedoms and future reappraisal, consistence with old policies and schemes, easiness of application and clear ethical regulations. Peeples ( 2002 ) besides suggests engaging a dedicated moralss officer within the concern to supervise all ethical issues that may come up.


After placing the development, signifiers and ethical issues of e-commerce, this subdivision of the paper will now concentrate on the relevant e-commerce chances and challenges for enterprisers.

E-commerce Opportunities for Entrepreneurs

Karjaluoto and Huhtamaki ( 2010 ) sees e-commerce as a valuable tool in assisting bing concerns to develop relationships with new clients and heighten bing 1s. They believe that a peculiar long-run benefit for the acceptance of e-commerce is its capacity to cut down future homo and fiscal resources, which is particularly of import for little and moderate-sized endeavors. They besides argue that little houses are much more flexible and are more adaptable to alterations due to their thin organisational construction and simpler decision-making procedures. As such, these houses have considerable advantage in the acceptance of e-commerce concern theoretical accounts. Epstein ( 2004 ) besides believes that e-commerce offers strong potency for value-creation among concerns, and argues for the acceptance and execution of e-commerce based on sound concern constructs and rules.

Quader ( 2007 ) agrees with these observations and suggests the ways in which client value may be increased, as when e-commerce enables companies to easy track their clients ‘ purchasing wonts and penchants, store them in a database, and utilize this information to orient their offerings. He besides cites Timmer ‘s work in placing e-commerce concern theoretical accounts ( 1998 ) . Most of these theoretical accounts have been adopted successfully and can be applied by enterprisers as they see fit. Some of the most relevant are:

E-Shop – a direct e-commerce theoretical account between a concern and its clients, which can potentially increase client demand while take downing gross revenues and selling costs.

E-Auction – an on-line command mechanism normally among persons but may besides affect concerns. Ebay is a celebrated illustration.

E-Mall – a aggregation of E-Shops which offers strategic confederations with other houses to unite strengths in increasing traffic, implementing their trade names, utilizing a unvarying payment system, and even take downing costs of on-line minutess.

Virtual Communities – companies may take to take part in one, and portion experiences with other industry participants or develop their ain for their clients which may assist increase trade name trueness and repetition concern.

Dennis et Al. ( 2004, p. 206-207 ) expand on these theoretical accounts farther by placing houses that have established themselves online as practical retail merchants or E-retailers, which have allowed clients to handily and rapidly ‘participate in retailing activities antecedently restricted to store-based retail merchants ‘ such as monetary value comparings and different payment options. The writers besides identify the chinks and bricks retail merchants as those who have both physical shops and web presences. They cite Amazon and UK ‘s Harrod ‘s as among the most celebrated illustrations of E-retailers and chink and bricks retail merchants.

Harris and Dennis ( 2002, p. 244 ) , meanwhile, identifies some of the advantages of e-retailing over traditional retailing signifiers. They believe that e-commerce rubs out the bounds of house size and territorial boundaries as it allows the house to make a larger audience and be literally unfastened for concern 24 hours a twenty-four hours. They besides see important chances for beef uping client relationships, cut downing costs in selling and more upselling and cross-selling activities.

The Challenges of E-commerce Adoption for Entrepreneurs

Karjaluoto and Huhtamaki ( 2010 ) studies that while little houses are inherently more flexible and adaptable than big houses, they will besides constantly face many hurdlings in seeking to follow and implement e-commerce in their concerns. Factors such as limited clip, resources and know-how that can be devoted and applied to e-commerce activities are major challenges for enterprisers. Meanwhile, Rodriguez-Ardura ( and Meseguer-Artola & A ; Vilaseca-Requena, 2008 ) specify some of the external factors that may impede large-scale acceptance of e-commerce among enterprisers, such as the grade of engagement of authorities and regulative organic structures in developing legal, fiscal and selling models for e-commerce development. They argue for the importance of set uping clear and enforcible legal and concern models to efficaciously turn to the concerns of concerns and consumers on issues of on-line privateness, information protection and fiscal security, among others.

Epstein ( 2004 ) besides identifies several factors within the concern that may impact the acceptance and execution of e-commerce activities. Corporate civilization, for illustration, will play a immense portion in finding the extent of e-commerce activities. The proprietor, director and employees all have to be engaged and unified in any e-commerce project. The competitory standing of the house in respects to e-commerce is besides rather hard to determine particularly given the dynamic nature of the concern of selling online. The determination to provide to abroad clients is besides a important point in any e-commerce, as international distribution, payment systems and accomplishing client satisfaction can potentially perplex affairs for a little house. Finally, and possibly most of import, the IT capabilities of the employees have to be taken into history.

Another major challenge for enterprisers who want to prosecute in e-commerce is achieving client trust and trueness. Karake-Shalhoub ( 2002, p. 191 ) sees client trust and trueness as the market place currency of this new century. They argue that there are still critical spreads that exist in understanding client behaviours that contribute to developing trust and trueness, particularly among on-line service suppliers that offer intangible merchandises with subjective public presentation indexs.


There is no denying the power of the Internet in determining current and future tendencies in concern. E-commerce, in peculiar, has attracted and frustrated enterprisers of all sizes and industries due to its potentially immense benefits and progressively sophisticated, and frequently, complicated concern theoretical accounts.

It can be sufficiently argued that e-commerce is a construct still in its babyhood, prone to major displacements in kineticss and sensitive to progressively sophisticated and savvy market gustatory sensations. As such, any effort at using e-commerce either as the exclusive focal point or portion of a concern scheme must be flexible plenty to suit new and go throughing market tendencies while staying grounded in good old fashioned concern sense and patterns gained from traditional concern signifiers.

Further, there is no bound, at least at this point, in the growing chances presented by e-commerce. Even with the immature age of the Internet, there is already a diverse and expansive international market crossing assorted demographics such as age, race, gender and income degree that exists side by side with the chance to provide to progressively specific and smaller niche markets. Other concern activities such as selling, advertisement, gross revenues, client dealingss, procurance and strategic confederations are besides happening new applications and developing new rules as they are applied online. Entrepreneurs keen on maximising the possible benefits of these developments must maintain abreast of them, continually measure the pertinence to their houses and use as necessary.

On the other manus, there are besides plentifulness of challenges and hurdlings that may impede and even damage e-commerce acceptance and development among enterprisers. External factors such as authorities ordinances and ethical issues that should protect concerns and consumers still need to be refined, expanded and explained to all stakeholders. Besides, little and moderate-sized concerns, in peculiar, face considerable challenges in leveraging on their size and restricting the negative impact of limited resources, clip and proficient know-how available to their e-commerce attempts. There can be considerable advantage for these smaller houses to research fiscal and proficient aid from authorities and non-government organisations in implementing their e-commerce ventures.

Meanwhile, the big-picture issues that confront concerns, consumers, authoritiess and all Internet users – online privateness, e-commerce moralss, dealing and informations security – all require a conjunct attempt among stakeholders in order to come up with feasible, effectual and feasible solutions. They may come in the signifier of stricter and more comprehensive e-commerce Torahs and privateness statute law, engineering betterments such as encoding to safeguard sensitive personal informations, widespread acceptance of ethical protocols and best patterns, self-regulation among concerns, increased watchfulness and good antique common sense among Internet users. For if the Internet is to stay a feasible concern platform, all stakeholders need to lend to keep and better its unity.