How E-commerce Impacts the Operations of Small Businesses Compared to Big Corporations

3030 words (12 pages) Business Assignment

17th Apr 2020 Business Assignment Reference this

Tags: Business AssignmentsBusinessSMEsEcommerce

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Table of Contents

I. Introduction

II. E-Commerce and its Evolution over time.

III. Advantages of E-Commerce

IV. The Need for E-commerce for Small businesses

V. Online Marketing for Small Businesses

VI. Business Opportunitites for Growing Businesses.

VII. E-Business vs E-Commerce

VIII. Conclusion.


I. Introduction

In the last decade, E-commerce and online shops have bloomed in a tremendous way, creating a hyper-competition between business like never before. Strategic marketing within companies has evolved in order to keep their companies and products relevant to the market. In this research, we will take a closer look at the benefits and disadvantages businesses have when it comes to utilizing e-commerce to sustain their business. How small business might have a better opportunity to increase their market target by taking advantage of social media and internet sales. With this new technological era, businesses need a well-thought-out commerce strategy to outpace competitors and generate awareness for their brand and services within the consumers’ sector. Even now there are many start-up businesses and well-established ones that aren’t embracing the change of how consumers want to handle business over the internet and social media instead of having to go into a physical store to purchase.

II. E-Commerce and its Evolution over time.

The internet has been around for many decades now, in a different form than how it is utilizing now. In 1996, for example, the internet was not accessible to everyone, computers were double the size of the desktops we have now, its functions were also limited, and the speed of the internet was nothing compared to the light-speed that its available now. E-commerce was used only within the company store or offices, through its local network, employees were able to update inventory, stock, and file reports for the bosses to have access to via email or company portals.  (Marsan, 2009). There was no such thing as ordering online and picking up at the store, much less the ability to have it delivered to home the same day.

Now with the evolution of the internet and development of technology, many businesses have a worldwide connection to consumers anywhere they want to do business. Website and online catalogues were becoming more popular by the year 2000 and websites like eBay and Amazon starting noticing more traffic on their sites, more online users creating accounts and browsing item on their computers. By the time the year 2010 rolled around, eBay and Amazon were expanded to other countries worldwide with a strong influence in the U.S, the UK and Latin America. Showing many other businesses that online commerce was here to stay.

The perspective about buying online and its risk, have shifted and made a path to a new way of buying and selling items over the internet, from anywhere in the world. Nowadays shoppers are spending more than 36% of their monthly budget shopping online, whether it is for groceries, apparel, footwear or accessories for home and pets. With the aid of technological advances on mobile devices and computers, many businesses have developed apps where consumers can access items for sale online, departments stores such as Macy’s, Lowe’s, and Michael’s are an example of companies that have evolved into online stores. Follow by many other stores like PetSmart, Home depot and even grocery stores, have taken advantage of the bloom online shopping has generated in the last decade.

III. Advantages of E-Commerce

It is easy to understand why big corporations will want to provide consumers access to their inventory 24/7, the monetary revenue it can generate can very well balance the cost of having a physical store, while also providing the opportunity of having more inventory available online than what could fit in a retail store. One of the vital portions a business of any size needs is to identify opportunities that will enable to sell in any particular market, by disregarding the knowledge and effectiveness the social media a small or big company could be missing out on the  greatest platform to showcase their products and services. (Costa, 2003). Small business owners now are more aware that while there are plenty of benefits for the consumers that ship online, ecommerce advantages are equally abundant for retailers and small shops. This is precisely the reason as to why many small businesses are now running their online stores as a full-time occupation or in conjunction with having a physical storefront. Ecommerce websites are providing small businesses a comprehensive range of benefits. The evolution of e-commerce also bring in the advantage of a faster check-out and easier,  newer platform to keep customers information. Examples of the benefits and disadvantages of e-commerce for small businesses can be:

  1. Companies are starting to adapt and accept digital currency or virtual payments, thanks to the development of apps like Google Pay, Samsung Pay, Apple Pay, and PayPal, consumers are able to purchase items and services in a more secured and simpler way.
  2. The one disadvantage is the risk of exposing consumers’ personal information. If companies or business are hacked, hackers could easily obtain our credit card number or contact information.
  3. With companies been able to sell their services online, it reduces the need to have a physical location which in turns benefits the business because the cost of rent can be reduce just like the workforce needed to operate the physical store can be minimized as well.

IV. The Need for E-commerce for Small businesses

Now the internet has become the platform in which many businesses depends on to survive. Not involving social media into a business strategy, is considered to be “backwards-looking, blinkered, and above all, a serious business liability,” (Holmes, 2015). If the desired is to survive in a world of various business venues, a business needs to be able to compete at the same level as other competitors. Online stores like Amazon and eBay have created a new market, the market of individuals that don’t have time or the desire to walk into a store and purchase the items or services they need. As a result of this new type of commerce, we have seen how in the last few years big companies like Walmart, Office Depot and even smaller grocery stores like Albertson’s have come in  to play in the same field. By offering the option of placing orders online the customer saves time by browsing inventory on their website.


Businesses like Amazon have an excellent marketing strategy and are complete functional as an online store, a business that helps small business owner the ability to sell products and services though their online platform is an example of the many venues in which small businesses can thrive when using the internet to further their success. Physical stores, no matter how popular are limited by the geographical area, but with an online store, the whole world becomes the playground. Small business owners do not have to solely depend on foot traffic and can sell their products and services across the world. They can capture new audiences which they wouldn’t be able to reach otherwise. This drives conversions and sales and the small business experiences a new level of growth.

Even Smaller restaurants are adjusting and are offering their menus on apps like DoorDash and Uber Eats. These two apps allow customer to place food orders ahead of time and have them delivered at their location. Adapting to a new strategy in marketing allows new business to become better known and also helps them attract business. (Laudon, et al., 2019).  Investing in an ecommerce software platform like Uber Eats and DoorDash is important for all businesses, because consumers use all channels at their disposal when researching, selecting and buying a product. In-store browsers can become online shoppers and vice versa and geographic location in most cases is no longer a barrier for businesses.

V. Online Marketing for Small Businesses

Small businesses are not too far behind  when it comes to adapting the new methods of online commerce. The one difference between the marketing method between big corporation and small businesses is development of their marketing strategy as well as the budget they have to invest in online advertisement.  Online shops like eBay, Facebook marketing, Amazon and even Etsy give a great advantage to independent entrepreneur’s that are looking to sell their merchandise online under the umbrella of a bigger name brand as their platform, at a relatively less expensive way than having to pay rent for a physical store. Online sites like Etsy charges its users about 20 cents USD to list an item and collects a 3.5% fee on the sale price of whatever is sold on there site. Which can be a good way to start a business and try to develop a clientele that can later on shop constantly the products offered.  It can be very simple to come up with an idea for a business, but it is important to have a well structures strategy to attract customers .For small business having profiles on social media can be of great advantage, they can interact more easier with customers and can answer question and inquiries quicker. For example, many small restaurant or even furniture stores have googled profiles, so when customer search their names, consumers can read reviews, pictures of the store and in most cases send inquires to the business owners about food menus, inventory or location hours.

New data from SurePayroll’s monthly Small Business Scorecard shows that only 26 percent of small businesses have an ecommerce site or even use their website in any way to conduct sales. (Sophy, 2019). From the business owners they survey 74% of them confirmed not having any ecommerce in their business. Which is very surprising considering that as we mentioned before, having access to eCommerce can open many more business opportunities for small businesses. Mostly because consumers are demanding an easier way to search for products online and pay for products and services in the most convenient of way, which is usually their smartphones or tablets.

VI. Business Opportunities for Growing Businesses

E-commerce has open opportunity for up-and-coming small retailers too, stores that are now more open to shipping item to consumers houses instead of having them come into a physical store for pick-up. In fact, the idea of online shopping and implementation of ecommerce in all businesses has even created a new evolution when it comes to car shopping. New business like Carvana are removing the need of having an actual dealership location in order to buy a car. Carvana is an example of the evolution of ecommerce, you can complete the car buying process complete online and have your new car shipped to the front door of the house or office, or pick it up from a designated location, no need to walk into a dealership. The advantage new up-coming business have other bigger, more established corporations is the fresh ideas and creativity they bring to a constantly reinventive field.  Improving a business’s ecommerce and internet marketing strategy can prevent a small retailer from falling behind their competitors and provide new sources of revenue as more consumers choose to shop online.

For small business, investing in online stores and online marketing can be more cost efficient and can help the business generate revenue faster. Still many factors remain in comparison to the market strategy of a big corporation. Location is very important for small business owners; it will dictate how far they can expand when it comes to setting a perimeter of where they can ship or deliver products. Business that understand what their customers want and need have higher chances to survive in the market. It’s important to do enough research of what the demographic will be that we are looking to target, any specific ages, gender and location, as well as professions, and their household sizes. Each customer has unique preferences, traits, and needs so its also important to consider what  type of services or product they will need and what frequency. A marketing plan will need to be develop, where we’ll research what is the best approach to create awareness about the business and how to get the attention of customer. Whether the small business starts with a physical location or and online store, we must attract consumers to us, this can be done by using social media sites like Instagram, Facebook and Twitter. The more buzz we create about the business the more people will become curious about the product or services that are being provided.

Companies like DoorDash and Postmates started by making connecting with restaurant, like McDonalds, Jack in the Box, and even local restaurants and offered to make food deliveries to their customer, these restaurants started promoting their delivery service and driving consumers to order food through their respective websites and pay online. It is a great business idea that benefits restaurants because it increased their reach of how many consumers they can serve while also increasing the awareness of their food services. DoorDash was founded in 2013 with a model similar to competitor Postmates

Both companies hire workers as independent contractors to deliver orders on demand. The owners of DoorDash and Postmates saw the great opportunity there is when it comes to delivering food and they don’t need to have a physical location since the menus for the restaurant they work with are available on their website and through their mobile apps. It is also a type of business that not only services other business but make a quick profit with every delivery. When a customer places an order through them for food or beverages there is a delivery fee or about $5 to $10 dollars depending on the distance. These two companies are just a couple of examples of the new possibility for business ideas that can thrive by using e-commerce and social media to create a good reputation and become well known in the cities where they operate. Food delivery is not the most innovating idea, but it has picked up on a market where there is a decline of at-home cooking and an increasing popularity of on-demand, and app-based services that are making online food delivery much easier and more convenient than ever before. And by using their services Small family owned restaurants get to spend their horizons  by advertising their menu on the delivery service’s site and apps.

VII. E-Business vs E-Commerce

During the research process we found information for e-business that made us see one important factor that can persuade some small business into not using e-commerce. Not all business operate the same or have the same goals in minds’ just like organization have different cultures

VIII. Conclusion

E-business and e-commerce methods are advantageous in the digital age because many companies and consumers rely on the Internet to receive product information. The Internet also opens the door to a variety of marketing opportunities, helps reduce overhead and companies can focus attention on improving customer support. A business owner with a storefront location can increase sales by implementing online promotions or campaigns and by creating a website that accepts online orders. E-commerce and e-business marketing strategies are cost-effective, and businesses can grow their online sales by acquiring the email addresses of past customers, optimizing websites for the search engines and other low-cost advertising techniques.


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