E-commerce

The fundamental benefit of electronic commerce is enhanced communication which allows for simplicity, flexibility and new approaches of doing business. The benefits of E-commerce are as follows

To organizations

1. Electronic procurements system is made cheaper. The use of e-commerce reduces cost of negotiating, ordering, searching and delivering of goods between companies.
2. Reduces inventories. The electronic transactions help in reducing inventories and overhead costs. Expansions of market. With e-commerce, traditional geographical and time limitations are no longer present.
3. Lower telecommunication costs. The use of internet in business transactions is very fast and much cheaper, reducing telecommunication costs.
4. Increase in productivity and efficiency. E-commerce allows to improve services to customers and increases the production of quality goods

To consumers

The main benefits of e-commerce are as follows

1. Larger choices. E-commerce provides customers with wide choices in selections of goods and services at competitive rates.
2. Quick information. The customers through the internet, can get the full information in a very short period about availability of commodities in international markets.
3. Twenty-four hour service. E-commerce makes it possible for the consumers to transact business 24 hours a day all over the world and throughout the year.
4. Interaction between seller and buyers. E-commerce enables the customers and producers to interact with each other in business dealings.

To society / public

1. Sales of goods at lower prices due to stiff competitions in the electronic markets, which forces the producers to sell at lower prices.
2. Access to education. E-commerce enables people living in distant areas to get professional education and earn college degrees.
3. Saves customers from the burden of visiting shop to shop during purchases of commodities.

1. Insufficient telecommunication facilities in most of LDCs like Tanzania.
2. No ability to touch and see the product and online images are sometimes exaggerated.
3. High cost of installation and maintenance of internet networks.
4. Many customers do not trust an unknown faceless seller, paperless transactions of electronic money.
5. With the use of e-commerce, there is a breakdown of personal contact between buyers and sellers

1. B2B (Business-to-Business) Companies doing business with each other such as manufacturers selling to distributors and wholesalers selling to retailers. Pricing is based on quantity of order and is often negotiable.
2. B2C (Business-to-Consumer) Businesses selling to the general public typically through catalogs utilizing shopping cart software. By dollar volume, B2B takes the prize, however B2C is really what the average Joe has in mind with regards to e-commerce as a whole. Having a hard time finding a book? Need to purchase a custom, high-end computer system? How about a first class, all-inclusive trip to a tropical island? With the advent of e-commerce, all three things can be purchased literally in minutes without human interaction. Oh, how far we've come!
3. C2B (Consumer-to-Business) A consumer posts his project with a set budget online and within hours companies review the consumer's requirements and bid on the project. The consumer reviews the bids and selects the company that will complete the project. This empowers consumers around the world by providing the meeting ground and platform for such transactions.
4. C2C (Consumer-to-Consumer) There are many sites offering free classifieds, auctions, and forums where individuals can buy and sell thanks to online payment systems like PayPal where people can send and receive money online with ease. eBay's auction service is a great example of where person-to-person transactions take place every day since 1995.