Buying Goods Online: Advantages And Disadvantages

Project and Seminar Material for Business Administration and Management BAM

Abstract

This study was intended to evaluate buying goods online: advantages and disadvantages.

This study was guided by the following objectives; To examine the reasons why people buy goods online, To investigate the disadvantages of buying goods online, To evaluate the impact of buying goods online.

The study employed the descriptive survey design; questionnaires in addition to library research were applied in order to collect data. Primary (questionnaire) was used for the study. Questionnaire was analyzed using descriptive statistics of simple percentage and frequency count which was presented in frequency tables and percentage. The respondents under the study were 200 students and individuals around the state of Selangor. The study findings revealed that there is a significant relationship between strike actions and employee output, there is equally a significant relationship between work-to-rule and employee output; based on the findings from the study, efforts should be made by the Nigerian companies to improve employee productivity by reducing strike actions and lockouts of employees.

The outcome of this study will educate the general public on the benefits and risks of buying goods online. This will be a guide for the people in knowing how to go about buying goods online.

Chapter One

Introduction

1.1 Background of the Study

Nowadays, the Internet is being widely used in daily life. The existence of the Internet has brought many advantages to individuals’ daily lives. With the help of the medium, people can communicate, learn, entertain, buy goods and other products and also get services. Of course the disadvantages of buying goods online have long been discussed; as the risk of personal information theft, spamming etc. However since the advantages outweigh the drawbacks, most of the people cannot resist buying goods and getting services online.

Since the beginning of the Internet, individuals have shown interest to the Internet. According to Internet World Stats’ statistics (2012), more than two billion people are linked to the Internet. This number shows that 30 percent of the world population. Consequently, the Internet can be used for the several purposes to the advantage of human being, for exampling buying and selling of goods (Hamill, 1997). Besides that, it has also brought a different dimension to commercial activities. The Internet has created a new market for both customers and organizations selling different kinds of goods, and has been an alternative market to the traditional market. Online services provide a chance to search information about goods and products/services, place a comment or give orders (Hoffman and Novak, 1996). Therefore, the previous experiences of marketing has turned into a different segment. Now organizations are taking steps to provide different payment methods, different shipping alternatives and even different web interfaces for different online services for consumers to buy goods easily.

Online buying is defined as the process a customer takes to purchase a service or product over the internet. In other words, a consumer may at his or her leisure buy from the comfort of their own home products from an online store. This concept was first demonstrated before the World Wide Web (WWW) was in use with real time transaction processed from a domestic television. The technology used was called Videotext and was first demonstrated in 1979 by M. Aldrick who designed and installed systems in the United Kingdom. By 1990 T. Berners-Lee created the first WWW server and browser and by 1995 Amazon expanded its online buying of goods and its experiences (Parker-Hall, 2009).

Many buyers across the world has seen the act of buying goods online as reasonable because it offers a lot of tangible advantages. For example, reduction in buyer’s sorting out time, better buyer decisions, less time is spent in resolving invoice and order discrepancies and finally increased opportunities for buying alternative products. Moreover, consumers can enjoy buying goods online for 24 hour per day. This is because online stores that sell goods is open for 365 days and never close even for a minute. Online commerce has also expanded geographic reach because consumers can purchase any goods and services anytime at everywhere. Hence, buying of goods online is more environmental friendly compare to purchase in store because consumers can just fulfill his desires just with a click of mouse without going out from house by taking any transportation.

According to the study which was done by Master Card Worldwide Insights (2008), the goods and services most frequently bought online among Africa’s online buyers are books and art (41%), home appliances and electronic products (39%), CDs/DVDs/UCDs (38%) and ladies clothing/accessories (38%). Opportunistic buying as a whole does not seem to be a major factor for many online shoppers: 41% bought on impulse just a couple of times, while 34% hardly ever bought on impulse. Similar to the types of goods frequently purchased online, items most likely to result in opportunistic buying were ladies clothing and accessories, home appliances and electronic products and CDs/DVDs/VCDs. With the increase in the level of online buying of goods worldwide, the researcher is examining the advantages and disadvantages of buying goods online.

1.2 Problem Statement

Convenience but buyers do not know if they are getting the goods according to what they like because they cannot examine the products before buying them. Buyers are torn between conveniences against getting the products that they really like. However, Internet is changing the way consumers buy goods and services, and has rapidly evolved into a global phenomenon. Many companies have started using the Internet with the aim of cutting marketing costs, thereby reducing the price of their goods and services in order to stay ahead in highly competitive markets. There has been several researches in the area of users perception of buying goods online but there is virtually no research particularly that has addressed the advantages and disadvantages of buying goods online, which makes this study to be coming at the right time.

1.3 Research Questions

This project will embark on the following research questions:

Why are people buying goods online?
What are the disadvantages of buying online goods?
What are the impacts of buying online goods to result in better business access?

1.4 Objectives of Study

These specific objectives of this project are as follows:

To examine the reasons why people buy goods online
To investigate the disadvantages of buying goods online
To evaluate the impact of buying goods online.

1.5 Scope of the Study

This study on buying goods online: advantages and disadvantages will cover the process of buying goods online with emphasis on the benefits which has enhanced the continued patronage for online goods and also considering the disadvantages and risks involved in the process.

1.6 Significance of the Study

The following are the significance of this study:

The outcome of this study will educate the general public on the benefits and risks of buying goods online. This will be a guide for the people in knowing how to go about buying goods online.
The results of this study will be useful for the government and the policymakers in understanding the risks the general public are exposed to while buying goods online. This will make them formulate policies and laws which when implemented will protect the general public from the risks and disadvantages experienced while buying goods online. This will also form a regulatory framework for the online shopping stores.

This research will also serve as a resource base to other scholars and researchers interested in carrying out further research in this field subsequently, if applied will go to an extent to provide new explanation to the topic

1.7 Limitations of the Study

Financial constraint

Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint

The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.8 Definition of Terms

Online:

Controlled by or connected to another computer or to a network

Internet:

The Internet is the global system of interconnected computer networks that use the Internet protocol suite (TCP/IP) to link billions of devices worldwide.

Buying:

Obtain in exchange for payment.

Chapter Five

Conclusion, Recommendation and Findings

Objectives:

The objectives of this study are as follows:

To examine the reasons why people buy goods online
To investigate the disadvantages of buying goods online
To evaluate the impact of buying goods online.

Findings

The findings from this study has revealed a lot of reasons why consumers buy good online which includes lower prices, easement of buying procedures, exposure to varieties of stores, products and payment options. This study also revealed that online buying saves time and energy. Buying goods online provides consumers more choices, more information and more ways to buy. Moreover, online marketing will remain as a medium to sell products, services and content over the internet (Korper and Ellis, 2001). As a result individuals can buy their goods, at any time, from anywhere through online shopping platform.

Moreover, this study also revealed the disadvantages of buying goods online to be the associated trust and security issues, delay and expensive transportation and the problems in the difficulties in returning unwanted goods and getting refunded.

There is mainly two types of risk have been realized; ‘product category risk and financial risk’ (Bhatnagar, et al., 2000; cited in Ko, et al., 2004). According to Ko financial risk also includes private information side. Since the Internet does not provide examining the goods physically, consumers have to trust or believe the information and shown pictures (Jarvenpaa and Tractinsky, 1999; cited in Ko, et al., 2004).

The study also revealed the impacts of online buying of goods to be the opportunity of buying goods and products anytime of the day. It has also exposed individuals to some fraudulent online business where payment is made and goods and products are not delivered.

Conclusion

Online buying is the process a customer takes to purchase a service or product over the internet.

First of all, the study “buying goods online: advantages and disadvantages” founded that time saving, people’s ability to choose from varieties of options, lower prices, product quality and value added services are the reasons people buy goods online. For instance, buying goods online saves time compared to buying from the traditional brick and wall market. According to Roehl and Fesenmaier (1992), with just a couple of clicks of the mouse, you can purchase your shopping orders and instantly move to other important things, which can save time.When buying items online, there are no long lines you have to endure, just to buy your merchandise. The idea of shopping online is cutting down those bad habits of standing in a long line and just waiting. Every online store is designed with unique individual ordering features to purchase the item.

Justifying the second reason people purchase online, buying goods online has provided opportunity for access to wide variety of product, more shopping opportunity due to availability of many stores owned by different persons. There is availability of various payment methods that makes online buying of goods easier.

The advanced innovation of search engine allows you to easily check prices and compare with just a few clicks. It is very straightforward to conduct price comparisons from one online shopping website to another. This gives you the freedom to determine which online store offers the most affordable item you are going to buy.

Thirdly, people purchase goods online due to the lower price of online goods occasioned by competition among various online stores. Online stores reduce the prices of their product with a view of increasing patronage, customer loyalty and retention.

Fourthly, buying goods online has afforded a good number of people the opportunity of buying quality products which they might not easily get in the neighborhood traditional market. Buying goods online offers people sufficient value added services which have prompted their continued patronage.

In as much as the advantages of buying goods online were pointed out, the disadvantages are as follows;

Trust and security risks: buying goods online is associated with trust and security risks issues based on the fact that many online buyers are of the opinion that their personal information as regards credit card and payment information can be used for something else by the management of some online stores.

Park and Kim (2003) stated that consumers’ trust to a provider or supplier results with becoming committed to the company. Trust issue is exceed with a few successful transactions, after individuals start feel safe and believe that this supplier answer their needs and wants. On the other hand provided information is another issue in terms of online shopping for Park and Kim (2003).

Transportation issues: it was also discovered in the research that shipping delays are sometimes associated with buying goods online. They also stated that expensive/unaffordable transportation fees associated with online buying is considered a problem.

Online buying has made a huge impact on users, such as being available for users 24/7.Users now purchase goods online anytime of the day.

Online shopping stores are open round the clock of 24/7, 7 days a week and 365 days. It is very rare to find any conventional retail stores that are open 24/7. The availability of online stores give you the freedom to shop at your own pace and convenience

It has also made buying abroad without actually travelling out of the country.

Recommendation

Based on the study, the following recommendations are worth noting.

The general public should be educated on the benefits and risks of buying goods online. This will be a guide for the people in knowing how to go about buying goods online.
The Nigerian government and the policymakers should carefully look into online buying of goods, understand the risks the general public are exposed to while buying goods online. This will make them formulate policies and laws which when implemented will protect the general public from the risks and disadvantages experienced while buying goods online. This will also form a regulatory framework for the online shopping stores.

Project Material Download