Difference between Traditional Commerce & E-commerce
Electronic commerce is having so many similarities with traditional commerce. Electronic commerce also involves an exchange of goods. But the major difference is the exchange of goods and services is done online in E-commerce. Before knowing the difference between both of the terms we have to take a separate look at the meaning of both E-commerce and Traditional commerce.
What is mean by Traditional Commerce
The meaning of term commerce is different for different people, so the definition of traditional commerce is the exchange of goods and services between people or we can say face to face exchange of services and goods. One of the oldest method and done by almost all of the people in their daily life like walk into a store, pick out an item and buy it and pay the money for the item.
What is mean by E-commerce ?E-commerce is a latest and upgraded type of Traditional commerce because in it there is also an exchange of goods. In E-commerce the word E stands for “electronic” but when you use it you will surely say that the word E stands for “easy”. You don’t have the need to go anywhere for the exchange of goods and services. You can do all of these things online with the comfort by sitting home, with the use of internet.
Some of the major and important differences between electronic commerce and traditional commerce are explained here.
Difference between E-Commerce and Traditional Commerce
Cost effective
E-commerce is very cost effective as compared to traditional commerce. In traditional commerce, there is a burden to give the commission to de agent or middlemen to sell the company’s product. The cost of commission to middlemen is eliminated in e-commerce as E-commerce provides a direct link between the business and the customer. The total cost required to run e-business is comparatively less as compared to the traditional business.
Saving of time
When we talk about traditional commerce it takes too much time to complete a transaction but E-commerce is so fast and saves costly time of both consumers and business. In tradition commerce you have to go physically for any kind of purchase but in E-commerce a product can be ordered and the transaction can be completed in couple of minutes through internet.
Customer interaction
In traditional commerce there is a face to face interaction between the customer and the business or with any representative of that business, on the other hand in E-commerce there is no Face to Face interaction with business all the things happens online.
Convenience of the business and customers
E-commerce is convenient for the customers and also the business. Customers can browse and see whole directories of products, they can compare prices between the products and choose any product (of his choice) anytime and anywhere in the earth (where internet connection is available) without any roam from their home or work place. In Tradition commerce it is just a dream and not easy to do.
Better connectivity
E-commerce provides very decent connectivity then Traditional commerce to its regular customer and viewers (future customers) because with it the organization’s website can be accessed virtually (online) from any place, any time by using internet. It is not necessary to go away somewhere or move away from your work place or home to find and buy a desired product.
Geographical limit of business
In traditional commerce, it is not so easy to expand the size of the market from local to national level or national level to multi-national level. Business organizations have to make or face a lot of expenses on the investment to enter in international market. But in E-commerce it is easier to expand the size of the market from local to national and international level. It can be done by hosting a website, by doing advertisements on the internet and after following legal terms, a business can come into global market. It is quite easy to attract customers from global markets with E-commerce at a low cost.
Working hours
In traditional commerce, the exchange or trading of goods and services can do only during specific working days and during specific time slot. On other hand, in E-commerce, the selling and purchasing of goods and services can done any day and any time.
Launching of new items or products
In traditional commerce, it is very time as well as money consuming to introduce a new product in market and to know the response of the customers. So the surveys are done to know this and it increases the total cost or expense. In e-commerce, it is easy to introduce a product on the website and we can get immediate feedback from the customers without spending a paisa. According the response of customers, the products can be redefined and modified for a best launch.
Process
In electronic commerce all the processing of business transactions are automated, so they are quick and also helpful in minimizing the clerical errors. When we talk about Traditional commerce then there is manual processing of business transactions in it and it is slower then E-commerce and also there are a lot of chances of clerical errors because human can make more mistakes in comparison to machines.
Business relationship
E-Commerce is an automated process for business transactions so the clerical chances are less due to no human intervention. When we talk about the interaction between the customer and business, in comparison to E-commerce, traditional commerce is more trustful and increases the chances of better business relation due to face to face interactions.
Profit making
E-commerce helps very much to increase the sales and profit of the organization or firm. It helps the organization to get more profits by increasing the sales, by reducing other costs and by providing quick operating processes. In Traditional commerce the cost increases because of the involvement of the middlemen, and it reduces the margin of profit.
Physical inspection of goods
E-commerce does not allow any type of physical inspection of goods. While purchasing goods through E-commerce, customers have to trust on the electronic images and nothing else but in traditional commerce, you can physically inspect the goods before purchase it.
Chances of Fraud
During the transaction of E-commerce a lot of cyber frauds can happen. People generally fear to give bank and credit card details because their information can be leak. Lack of physical presence and unclear legal issues generates more chances for frauds. In traditional commerce the chances of frauds are comparatively less because there is personal interaction between the buyer (customer) and the seller (business).