IGCSE COMMERCE Chapter 5 PDF

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Chapter 5

CHAPTER 5
E-COMMERCE

LECTURER: N. NEWAZ KARIM. ACCA AFFILIATE


Chapter 5
E-COMMERCE

E-commerce is the activity of electronically buying or selling of products or services over the internet.

CHARACTERISTICS

• The use website as a platform to sell.


• Wide variety of goods can be sold and made available to the customers.
• They provide delivery services to their customers.
• They usually offer product return options.
• Few e-commerce businesses follow a Clicks & Breaks business model.

CLICKS AND BREAKS

It is a business model in which a company does commerce in both online (Click) and physical shop
(Beaks) platforms.

EFFECTS OF E-COMMERCE

• Change in supply methods.


• Supplying directly from the warehouse. (Less requirement of Retailers)
• Communication through the website.
• Access to local and international customer. The shop is just a click away.
• Less harm taken by the environment (since no existence of retail shop usually which would have
consumed land, power).

FACTORS AFFECTING THE LOCATION OF E-COMMERCE

• No worries of having space for physical shops however they will still need a place to store products.
• E-commerce will need to have a head office where they will need specialist labours/staff to operate
their e-commerce website.

DISADVANTAGES OF E-COMMERCE

• Companies cannot give personal advice and encourage customers to buy the product which would
have been possible in person.
• Packing cost increases for business as they want to ensure that products safely reach the customers.
• Delivery cost increases since customers now order from very far away distances.
• Maintenance and developing a fully working and user-friendly website is expensive.

THANK YOU!

LECTURER: N. NEWAZ KARIM. ACCA AFFILIATE


Chapter 5

QUESTION PRACTICE

1. Explain what is E-Commerce.

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2. State the effects of E-Commerce.

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3. Describe two disadvantages of E-Commerce?.

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LECTURER: N. NEWAZ KARIM. ACCA AFFILIATE

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