While some barriers still exist to impede successful e-business, many entrepreneurs and corporate executives are taking the leap of faith necessary to commit to Internet customers. Common barriers to e-commerce include: consumer trust issues, regulatory considerations, international law, and language barriers. Given the opportunity for rapid market expansion through e-commerce, many businesses decide that the benefits far outweigh the costs.
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With stories in the news about Internet scams and identity theft, consumers are unsure about how to safeguard their financial information, while still enjoying the many benefits of online shopping. Conservative consumers are unwilling to shop online due to a lack of trust. Concerns over accountability are a part of the problem. Shoppers worry about being able to return an item to an Internet company they know nothing about. Commerce Secretary Gary Locke stated that "the Internet will not reach its full potential until users and consumers feel more secure and confident than they do today when they go online."
One of the biggest benefits and challenges of e-commerce is doing business with other countries. While competing in the U.S. marketplace is certainly not easy, crossing the border presents a completely new set of demands. Firms must adjust prices and procedures to reflect new costs and operational considerations associated with international commerce. Tariffs, taxes, trade agreements, currency fluctuation rates and shipping costs must be factored into a new equation for determining the cost of doing business overseas. In addition to the hard costs associated with a new worldwide customer base, there are soft costs the firm must consider. For instance, the company must hire employees and train them to understand the complicated maze of taxes, tariffs and trade restrictions. Trade overseas increases the paperwork significantly as reporting requirements increase.
One of the major concerns regarding international, e-commerce trade relates to legal accountability. Companies who operate in one country rely on that legal system to file civil or criminal suits against adversaries who break laws established to govern business conduct. Crossing the border to trade in a different country, with a very different legal system, presents a definite barrier worthy of consideration. Depending on the type of business in question, and the other country's legal system, this barrier could prove too risky to justify doing business.
The company must consider language barriers to conducting a business in other countries. Expanding a company's marketplace to include the e-commerce world often requires updating and adding additional marketing materials and new packaging in different languages. Costs continue to mount as additional staff members fluent in target market languages are also needed for customer service support. The amount of capital required to overcome the language barriers inherent in e-commerce operations prohibits many small businesses from expanding into foreign markets without careful planning.
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- Executive Gov: The Internet's Trust Issues: White House Officials Work on Secure Online Identities; Jack Moore; January 2011
- United States of America Deaprtment of Commerce:Preparing Your Business for E-Commerce; January 2011
- Europa Press Releases Rapid: Consumers: Online Shopping Increasingly Popular in the EU, but development "held back" by barriers to cross borders trade: March 2009
- University of St Louis: Define eCommerce