The Challenges Faced By Small Business When Implementing E-Commerce

Nowadays the common phrase of 'e commerce' is quite famous and being often used in our daily life, yet there is significantly more to it then they know of. E-commerce is defined as an electronic trade of business information; data between two or more organisation's computers. E-commerce consists of purchasing, selling and offering anything over the Internet, electronic fund transfer, smart cards, and procedures for conducting business over digital networks. Online business can assist small enterprise company to improve their income by the innovation they offered to client these days since the new era is all about technology.

MG Adornments is one of the small enterprise that has been selling distinctive homemade jewellery at local market for some years. Now they want to expand the business in selling their jewellery on online website. As a small business with low start-up funds and limited knowledge on e-commerce business, there are several issues that MG Adornment need to consider and implement before launching their new online website. E-commerce can benefit small enterprise such as MG Adornments in many ways as nowadays it is trend for people to purchase goods and services using the E-commerce business. This is because e commerce business stands as a platform that provides easy accessibility and serve 24/7 for the consumer to buy things on online website rather than going to the shop themselves. This could save up more of their time to prioritize other things. Small enterprise also can generate more income as more people will recognized their product and services since e-commerce business is well-known all around the world. This essay would discuss the challenges that small business may face when trying to start in e-commerce and some examples of successful small business in New Zealand that have entered an e-commerce business.

The first challenge that small business need to consider when launching an online business is the absence of computer knowledge and expertise. This is because small enterprise owner need to have extra information rather than only basic knowledge of the internet to launch an online business (Joseph, n. d. ). Essential skills includes knowing how to set up an online website and create a marketing plan for your business. It is crucial for the first-timer businesses to know how to drive their potential customer to the website, what way customer will take through the site, and how site design improvement will be accomplished (NZbusiness, 2008). Most business specialist trust internet business is a magnificent and effective channel for business – yet this relies upon how it is set up and worked, and how well the business comprehends what its clients need from online deals. Goods and service information and accessibility of payment system are not insufficient to attract customer.

A business owner must structure their e-commerce site in order to gain trust from the customer and influencing them to purchase online. Examples such as providing testimonials, guarantees of the product, return policy, and describing the details of company through the 'About Us' button on the website would gain the customer's trust. This is because, ‘the more we know about someone, the more we will trust them’ (NZbusiness, 2008). Tell customers all that they would need to know, including business vision and mission, delivery of goods, and provide a catalogue for all the items being sale. Other than that, protection and security concern can be the negative effect for both consumers and small business while working on the online shop. This is on the grounds that online transactions are characteristically more uncertain than those transaction conducted face-to-face because there's no real way to ensure that individual making the payment is the real owner of the credit card utilized. In the meantime, when the client inputs the payment information, there is a risk where a third party can hack and intercepting if the website doesn't agree to the satisfactory safety efforts, offering ascend to credit card fraud and theft (Business Resources, 2011).

Small business should know about the dangers that electronic transaction convey, and progress in the direction of securing the payment system to the most astounding measures. Business owner should also consider privacy policy when gathering personal data of clients from web-based business. This is because, since all the online transactions are recorded, it's moderately simple to make an online profile of the customer, and utilize that as an advertisement for company's promotions (Business Resources, 2011). In any case, many will concur this is an interruption on a consumer's entitlement to protection, and it's something that is vigorously managed on numerous nations. This implies that small businesses who been meaning to build up on online presence using e-commerce must know about the legislation that applies, as slip-ups can be expensive in terms of the client's trust and fines.

Thesleepstore.co.nz is an example of small business that entered e-commerce in 2006 and have their ups and down until they become one of the renowned kiwi company that sells sleep aid device for babies (Thesleepstore. co. nz, 2018). When Louise Tanquay began her business Thesleepstore. co. nz from home, her knowledge on e-commerce business was constrained to purchasing theatre tickets on the web and utilizing TradeMe. Their business, which offers sleep-aid device infants, including their very own design, utilizes them both full time, with one part timer that being employed three days out of every week. Keeping up with the latest design of product, setting up online website payment systems, dealing with custom and guaranteeing supply are for the most part difficulties to be survived, says Tanquay. She says there are hidden expenses to online business. Around 90 percent of clients like to pay with credit card, with the rest prefers to use online banking deposit. Tanquay's web advisor Zeald, which fabricated the website, dealt with setting up the payment side of the business webpage after Tanquay approached her bank and was advised the bank was not able give an interface between its card systems and the payment system of the online website. Credit card transactions will be process when customer pay for the payment gateway and merchant fee to the bank and this could be up to 9 percent commission which at the point, you still have to pay for the web facilitating fee (NZbusiness, 2008). It is far less demanding to run with the arrangement your web designer coordinates. Based on this challenge, MG Adornments need to learn more knowledge on e-commerce by taking free course that offers by Trade and New Zealand Enterprise. It also would be a good decision to gain advice from the expert especially on handling their payment system for the website. Xero is another example of company that start up as small business and has faced several challenge when entering e-commerce business. Xero was established by Rod Drury and his assistant when they felt that conventional desktop accounting software had turned out to be obsolete and chosen to create a modern cloud-based product. Xero Limited was officially introduced in 2006 in Wellington, New Zealand (Xero, 2018).

The business concentrated on the New Zealand market and development for its first initial five years before entering different markets. Because Xero decided to focus their operation in New Zealand, the company faces some issue regarding capital funding and investment. Since New Zealand's funding division is so undeveloped and barely exist, Xero's CEO Rod Drury needed to consider creative option to fund-raise for the company. While the greatest endeavor bargain conceivable in New Zealand at the time, 2007, was about $2 million, Drury had terrific plans for Xero from the very beginning as he offered his company After Mail to Quest for 15 million in cash as a capital for Xero. Drury did not want to raise money from Silicon Valley as on the grounds that he wanted to avoid the pressure of selling the business to a larger company (McKenzie, 2013). The ploy worked and Xero got its $15 million, Drury begin constructing the business, and now, after several years, it has gained interest from major investment holder such as Peter Thiel's Valar Ventures fund and Matrix Capital and making Xero as a market leader in accounting software provider. By referring to Xero’s challenge in limited fund and investment, MG Adornments need to make a creative plan for the business’s development and find other funding agencies to make an investment. This is because, funding is an essential factors for the business’s growth. In conclusion, E-commerce has been a revolutionary with their business models as trading online empowers businesses to reach wider range of audience while reducing the cost of customary retailing method. It likewise provide the company with long working hours and least human capital.

E-commerce enables businesses to all the more likely comprehend and meet the requests of clients, working all the more intimately with them by overseeing databases, bringing about better supply chain management activities and efficient logistic. Small and medium-sized businesses, in particular, face considerable challenges such as, limited resources on product, lower start-up capital, time management and lack of e-commerce knowledge. There can be significant favourable position for these smaller firms to investigate budgetary and specialized assistance from government and non-government associations in actualizing their online business ventures. For if the Internet is to remain as a platform for all business stage, everyone need to contribute in maintaining and enhance its integrity.