Electronic commerce, or e-commerce, is the marketing, promoting, buying, and selling of goods/services via the Internet. This exciting new realm of business presents tremendous opportunities for small business owners, though there are pitfalls and weaknesses to consider.

Small Business Internet Use

The electronic marketplace is growing exponentially, Is it possible for a small business owner to compete with larger, more established companies that have gone online? The Small Business Administration's Office of Advocacy analyzed data on Internet business activity and reported the following...

	By 2002, 85% of small businesses are expected to conduct transactions on the World Wide Web.
	Small businesses that use the Internet have grown 46% faster and have higher revenues than off-line businesses.
	85% of businesses with fewer than 100 employees had personal computers in 1999; 61% of these had Internet access.
	The Internet economy generated an estimated $830 billion in revenues in 2000, a 58% increase over 1999.

Strengths of E-Commerce

The Internet is the fastest growing medium of communication in the world, and e-commerce between businesses is growing exponentially. The Web offers several advantages to small business owners...

	Enables small businesses to compete with larger companies
	Small firms can reach customers locally, nationally, and internationally
	A convenient and easy way of doing business as it is not restricted to hours of operation
	Easy for companies to make their products available to customers overseas
	Businesses that utilize the Internet have higher revenues

Weaknesses of E-Commerce

While there certainly are many advantages to e-commerce, there are a few shortcomings that should not be overlooked...

	The number of Web users who become customers is very slim, at least for the time being
	Upfront costs for implementing the web site can be staggering especially for a startup company
	Monthly cash flow is needed for maintenance
	Return on the investment is not guaranteed
	Security worries: e.g. customer fraud, hackers
	Lack of personal interaction with the customer

The Future of E-Commerce

Currently, electronic commerce is a largely uncharted frontier, but today's statistics suggest that the future of business is on the Internet. E-commerce will not replace traditional shopping, but will provide a wider selection to both merchants and consumers. Small businesses are at the forefront of this movement because they have so much to gain from the expanding community of worldwide e-commerce. Businesses that use the Web to buy, sell, distribute, and maintain products/services can realize significant cost savings and attract more customers. Currently most e-commerce is conducted between businesses; however, more cost-effective and secure methods of business to consumer e-commerce are being developed. Growth in consumer online sales is slow, but continues to rise. In the near future, both merchant and consumer will enjoy the benefits of a secure and vast virtual market square.

Links to E-Commerce Web Sites

Want to learn more about e-commerce? Visit these links for more information.