Advantages and the Use of Online Business - Essay Example

This paper tells that the internet is a fast and easy sharing tool of information, which makes it the most important tool of the new era. The Internet has been the catalyst for the change and development of the business world in the generation. It has become indispensable for the companies to gain the maximum benefit with lower fixed costs and investments, through their resources. This is done by using the most efficient manner to compete with rivals in terms of crises. Aydin & Kavaklioglu uses content analysis method in their study on the website www.kitapix.com to make sales directly to the final consumer over the internet.

This website was formed in 2009 under a low budget but established a customer group in a spell. Low investment costs and low fixed costs benefits, made e-commerce much more attractive for other companies. Besides the low costs, Baird notes that e-commerce may reach to a large geographical area with unlimited boundaries of service time and provide a great competitive advantage to the businesses. For example, in the retail industry, merchandise assortments can increase inventory carrying costs and expenditures, which are caused by product returns.

To control these costs, many retailers have maintained relatively few stock-keeping units (SKUs), which yield a pattern of awareness in sales commonly known as the 80/20 rule and described by the Pareto Principle. Another example is that some people have claimed that the surge of Internet retail activity can dilute this concentrated pattern of sales by lowering consumer search costs. As a result, they have argued that Internet commerce may contribute to an expansion in the share of sales by niche products, thereby creating a longer tail in the distribution of SKU sales.

This phenomenon may ultimately make it more attractive to sell a greater variety of SKUs without incurring excessive carrying and product return costs.