| Even if a provider of E-commerce goods | | | | marketing techniques to facilitate |
| and services rigorously follows these | | | | transactions of tangible goods without |
| "key factors" to devise an exemplary | | | | maintaining real inventory. Examples |
| e-commerce strategy, problems can still | | | | include numerous sellers on eBay. |
| arise. Sources of such problems include: | | | | Virtual marketers can sell some |
| 1. Failure to understand customers, why | | | | non-digital products and services |
| they buy and how they buy. Even a | | | | successfully. Such products generally |
| product with a sound value proposition | | | | have a high value-to-weight ratio, they |
| can fail if producers and retailers do | | | | may involve embarrassing purchases, they |
| not understand customer habits, | | | | may typically go to people in remote |
| expectations, and motivations. | | | | locations, and they may have shut-ins as |
| E-commerce could potentially mitigate | | | | their typical purchasers. Items which |
| this potential problem with proactive | | | | can fit through a standard letterbox — |
| and focused marketing research, just as | | | | such as music CDs, DVDs and books — |
| traditional retailers may do. | | | | are particularly suitable for a virtual |
| 2. Failure to consider the competitive | | | | marketer, and indeed Amazon.com, one of |
| situation. One may have the will to | | | | the few enduring dot-com companies, has |
| construct a viable book e-tailing | | | | historically concentrated on this field. |
| business model, but lack the capability | | | | Products such as spare parts, both for |
| to compete with Amazon.com. | | | | consumer items like washing machines and |
| 3. Inability to predict environmental | | | | for industrial equipment like |
| reaction. What will competitors do? Will | | | | centrifugal pumps, also seem good |
| they introduce competitive brands or | | | | candidates for selling online. Retailers |
| competitive web sites? Will they | | | | often need to order spare parts |
| supplement their service offerings? Will | | | | specially, since they typically do not |
| they try to sabotage a competitor's | | | | stock them at consumer outlets -- in |
| site? Will price wars break out? What | | | | such cases, e-commerce solutions in |
| will the government do? Research into | | | | spares do not compete with retail |
| competitors, industries and markets may | | | | stores, only with other ordering |
| mitigate some consequences here, just as | | | | systems. A factor for success in this |
| in non-electronic commerce. | | | | niche can consist of providing customers |
| 4. Over-estimation of resource | | | | with exact, reliable information about |
| competence. Can staff, hardware, | | | | which part number their particular |
| software, and processes handle the | | | | version of a product needs, for example |
| proposed strategy? Have e-tailers failed | | | | by providing parts lists keyed by serial |
| to develop employee and management | | | | number. |
| skills? These issues may call for | | | | Purchases of pornography and of other |
| thorough resource planning and employee | | | | sex-related products and services |
| training. | | | | fulfill the requirements of both |
| 5. Failure to coordinate. If existing | | | | virtuality (or if non-virtual, generally |
| reporting and control relationships do | | | | high-value) and potential embarrassment; |
| not suffice, one can move towards a | | | | unsurprisingly, provision of such |
| flat, accountable, and flexible | | | | services has become the most profitable |
| organizational structure, which may or | | | | segment of e-commerce. |
| may not aid coordination. | | | | There are also many disadvantages of |
| 6. Failure to obtain senior management | | | | e-commerce, one of the main ones is |
| commitment. This often results in a | | | | fraud. This is where your details (name, |
| failure to gain sufficient corporate | | | | bank card number, age, national |
| resources to accomplish a task. It may | | | | insurance number) are entered into what |
| help to get top management involved | | | | look to be a safe site but really it is |
| right from the start. | | | | not. These details can then be used to |
| 7. Failure to obtain employee | | | | steal money from you and can be used to |
| commitment. If planners do not explain | | | | buy things on line that you are |
| their strategy well to employees, or | | | | completely unaware of until it is too |
| fail to give employees the whole | | | | late. If this information is leaked into |
| picture, then training and setting up | | | | the wrong hands. People are able to |
| incentives for workers to embrace the | | | | steal your identity, and commit more |
| strategy may assist. | | | | fraud crimes under your name. Finally |
| 8. Under-estimation of time | | | | there are many problems with e commerce |
| requirements. Setting up an e-commerce | | | | some of which are: |
| venture can take considerable time and | | | | Failure to understand customers, why |
| money, and failure to understand the | | | | they buy and how they buy. Even a |
| timing and sequencing of tasks can lead | | | | product with a sound value proposition |
| to significant cost overruns. Basic | | | | can fail if producers and retailers do |
| project planning, critical path, | | | | not understand customer habits, |
| critical chain, or PERT analysis may | | | | expectations, and motivations. |
| mitigate such failings. Profitability | | | | E-commerce could potentially mitigate |
| may have to wait for the achievement of | | | | this potential problem with proactive |
| market share. | | | | and focused marketing research, just as |
| 9. Failure to follow a plan. Poor | | | | traditional retailers may do. Failure to |
| follow-through after the initial | | | | consider the competitive situation. One |
| planning, and insufficient tracking of | | | | may have the will to construct a viable |
| progress against a plan can result in | | | | book e-tailing business model, but lack |
| problems. One may mitigate such problems | | | | the capability to compete with Amazon. |
| with standard tools: benchmarking, | | | | Inability to predict environmental |
| milestones, variance tracking, and | | | | reaction. What will competitors do? Will |
| penalties and rewards for variances. | | | | they introduce competitive brands or |
| 10. Becoming the victim of organized | | | | competitive web sites? Will they |
| crime. Many syndicates have caught on to | | | | supplement their service offerings? Will |
| the potential of the Internet as a new | | | | they try to sabotage a competitor's |
| revenue stream. Two main methods are as | | | | site? Will price wars break out? What |
| follows: (1) Using identity theft | | | | will the government do? Research into |
| techniques like phishing to order | | | | competitors, industries and markets may |
| expensive goods and bill them to some | | | | mitigate some consequences here, just as |
| innocent person, then liquidating the | | | | in non-electronic commerce. |
| goods for quick cash; (2) Extortion by | | | | Over-estimation of resource competence. |
| using a network of compromised "zombie" | | | | Can staff, hardware, software, and |
| computers to engage in distributed | | | | processes handle the proposed strategy? |
| denial of service attacks against the | | | | Have e-tailer's failed to develop |
| target Web site until it starts paying | | | | employee and management skills? These |
| protection money. | | | | issues may call for thorough resource |
| 11. Failure to expect the unexpected. | | | | planning and employee training. |
| Too often new businesses do not take | | | | Products less suitable for e-commerce |
| into account the amount of time, money | | | | include products that have a low |
| or resources needed to complete a | | | | value-to-weight ratio, products that |
| project and often find themselves | | | | have a smell, taste, or touch component, |
| without the necessary components to | | | | products that need trial fittings — |
| become successful. | | | | most notably clothing — and products |
| Certain products or services appear more | | | | where colour integrity appears |
| suitable for online sales; others remain | | | | important. Nonetheless, Tesco.com has |
| more suitable for offline sales. | | | | had success delivering groceries in the |
| Many successful purely virtual companies | | | | UK, albeit that many of its goods are of |
| deal with digital products, (including | | | | a generic quality, and clothing sold |
| information storage, retrieval, and | | | | through the internet is big business in |
| modification), music, movies, office | | | | the U.S. Also, the recycling program |
| supplies, education, communication, | | | | Cheapcycle sells goods over the |
| software, photography, and financial | | | | internet, but avoids the low |
| transactions. Examples of this type of | | | | value-to-weight ratio problem by |
| company include: Google, eBay and | | | | creating different groups for various |
| Paypal. Other successful marketers such | | | | regions, so that shipping costs remain |
| as use Drop shipping or Affiliate | | | | low. |