1. What are the advantages and disadvantages of selling books and goods over the internet?
The major advantage of selling books and other goods over the internet is the elimination of costs related to maintenance of retail stores and the direct contact with the customer online (Korper & Ellis, 2001). Online trade almost removes geographical barriers and allows the customers to shop 24/7. Amazon does not need to deal with arrangement of books and about determining customers demands in particular areas. It is much easier and comfortable to look for books online. Most online shops provide delivery of books, and payments can be made online. Shopping today has become less time consuming, and significantly more flexible.
Another set of advantages is that customers can view all the information about the book, book reviews and books on similar topics. This gives them far more information than looking at the single book at the bookshelf of a retail store. Moreover, the feature “people who bought this also buy…” allows groups of people with similar preferences to update their choices and get to know about new products (Schepp & Schepp & Richardson, 2009). Thus, online sales provide a variety of benefits both to Amazon and to its customers.
However, there are certain disadvantages of online sales, too. First of all, the security of online payments is a problem preventing many people from shopping online. The totally secure system has not been introduced yet, and customers might find it confusing revealing their payment data online. Delivery of books also might not happen timely, due to many factors. The customer never has the chance to see and “feel” the book; many people dislike buying books online because they cannot sense the book, turn over the pages and read a few lines. In fact, retail sales and online sales rather supplement each other than oppose, due to many advantages and disadvantages of e-commerce.
2. If books can be downloaded online, how will Amazon’s business change?
If there will be many free resources where books can be downloaded online, sales of Amazon will dramatically decline, because many people already prefer reading from the screen to paper books. Free resources might seriously hinder book-selling business. However, if the customers will be charged for downloading the books, the e-commerce will just have one more channel. This tendency is happening now with iPods, iPads and various book readers. Amazon introduced Kindle reader, with books which can be downloaded into the reader and linked with a particular device (Schepp & Schepp & Richardson, 2009). In fact, Amazon has quickly adjusted its online propositions. At the same time, the sales of paper books have still declined, and are likely to decline in future.
3. What do traditional stores have to gain from setting up an e-commerce side to complement their retail stores?
E-commence is a different sales channel: it attracts flexible customers; the majority of them are younger than 40-45 y.o., value their time and prefer shopping in the environment where their time is optimized, and where they can shop at any time. E-commerce addresses these customers, and also provides a good platform for getting new customers by online advertising (Korper & Ellis, 2001). Including delivery of goods into their services, traditional stores may create a separate source of revenue based on e-commerce.