Contrast Between Online And Offline Internet Businesses

The term ‘online’ is used to refer to an activity that is carried out electronically or over the Internet. In this context, we commonly encounter a number of terms such as online gaming, online search, online conference, online test and Internet business. An Internet business may be defined as a business in which the core activities including the advertising, buying and selling of products and services are performed electronically or over the Internet. Many businesses have grown extremely profitable through online sales. Common examples of successful Internet businesses include companies such as eBay and Amazon. The first is an online retail store while the latter is an online bookstore. Both the businesses operate in a global marketplace on a 24x7x365 basis and have become household names around the world. Dell Computers is another major example of conducting successful business in an online environment.

While comparing and contrasting the online and offline business environment, we must consider the experiences of both the parties involved in the business transactions: the buyer and the seller. There are particular advantages and disadvantages to both the buyer and the seller in an Internet business environment:

Buyer

Advantages to the buyer in an Internet business environment include:

A buyer can easily find the rarest of products from the comfort of his home without the need to go to a market.

The costs associated with going to the market and searching for the desired product such as time and money in transportation are reduced and even eliminated.

Internet businesses provide innovative features to the online buyer such as automated cost-comparison that is not possible in the offline business environment.

Disadvantages to the buyer in an Internet business environment include:

The process of shipping is costly and also takes time in an Internet business environment.

The products on offer at a website cannot be felt or touched by a customer. The online medium only provides picture, sounds and textual specifications of the products and services to the buyers.

The process of returning an online purchased item is long and cumbersome. Customer support is often found missing.

Seller

Advantages to the seller in an Internet business environment include:

Internet business environment provides a global access to the world markets.

The sales costs involved in an Internet business model are negligible compared to an offline business model.

The online medium brings the smaller companies at par with the larger companies. Even smaller companies can provide better services at competitive prices.

A seller can easily track consumer purchases and use that data to recommend other items to the customer. This is not possible in an offline business environment.

Disadvantages to the seller in an Internet business environment include:

Unlike the offline environment, the online environment does not allow any personal contact with the buyers.

Internet businesses have to bear the cost of setting up websites, customer databases and online-servers.

Internet business is driven by the popularity of the seller’s website which is the sole interface for the customer.