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Commerce

18 Advantages And Disadvantages Of E-Commerce

Last Updated on February 18, 2022 By Methew Harbor Leave a Comment

E-commerce is a major contributor to sales globally, with 93.5% of internet users having made at least one purchase through the internet. E-commerce is growing at a rate of 23% per year, and it is expected that it will be a significant sales platform by the year 2040, with 95% of purchases being made online.

What is e Commerce?

E-commerce refers to making business online without interacting with the buyers physically. It is a modern approach to business, and more brands are moving towards e-commerce to boost their sales. E-commerce involves online selling and payments through online payment gateways. While it provides a space for people to sell their products without having a physical store to display their goods, there are also some disadvantages.

Advantages and Disadvantages of eCommerce

shopping-online-drop-shipping
AdvantagesDisadvantages
Available 24/4Lack of direct interaction
Larger marketNo tactility
Lesser costMore competition
Convenient buyingNo guarantee of quality
More choicesLong delivery time
Detailed product informationInternet access needed
No need to go outWebsite crashing
Affordable marketingBad reviews cause losses
Access to customer data 
Better sales through reviews 

Advantages of eCommerce

Available 24/7

Can customers go to their favorite apparel store at 5 in the morning and get the jacket they need for a trip urgently? No.

But can they order? Yes.

When you set up an e-commerce store, you are 24/7 open and available to your customers without any time restriction. They can place an order any time of the day, and you can dispatch their goods at the soonest to engage the customer and convince them to buy from you often.

Larger Market

The world has become a global village, and e-commerce is the best product of this global village. Websites are worldwide, and you can reach potential customers across oceans if you want to. Even a high school student can do it too. E-commerce gives you access to people globally to expand your business by catering to a large number of people.

Lesser Cost

E-commerce stores are a one-time cost and do not require continuous maintenance. While you may need 4 employees to run a physical store, e-commerce stores do not require the same workforce. Online selling also saves the cost of electricity and other forms of maintenance in the store, eventually decreasing your monthly expenditure. E-commerce stores are more automated, avoiding human error and reducing the need for many staff members.

Convenient Buying

Online sales have rocketed in the past years. Do you know why?

E-commerce allows people to buy at the comfort of their homes without going out. Everything they need is readily available on the internet, and they can buy quickly, just with a single click. Many e-commerce stores also provide the option of replacements where they pick the purchased good from your home. E-commerce is every busy shopper’s dream come true.

More Choices

Anyone might not have enough time to visit one store to another, you can always scroll through multiple stores online. The presence of hundreds of options online gives you more choices to select from, offering a wide range of colors, designs, sizes, and material quality. With so many options, you are more likely to easily find what you want.

Detailed Product Information

Another benefit of e-commerce is the information mentioned with each product for ease. Customers do not have to ask the seller about the features of the product as the product description and details give it all out themselves. You can find all information about a product on the e-commerce store or search engines to make the right choice of purchase.

No Need to Go Out

Online buying has made accessibility easy than ever before. If you do not have enough time to go out and buy the pack of cheese for dinner, order it right away, and it will be at your doorstep in a few minutes. While sometimes you have to pay a minimal delivery fee, e-commerce does not only save time but also cuts down fuel costs.

Affordable Marketing

We won’t say that billboards and TV advertisements are gone, but the era of digital marketing has definitely taken over. Now, most businesses are looking forward to digital marketing and making the best use of social media platforms to market their products to a wider audience. Digital marketing costs less than traditional marketing, and your product reaches a global market.

Access to Customer Data

Online selling gives you access to customer data and enables you to design your store according to customer needs. You can add products that your customers usually look for and cater to the needs of potential customers in a better way. By targeting the right customers with the products they need, you can make them choose you more often.

Better Sales through reviews

Reviews on the internet are just like words of mouth but reach more people. Reviews and testimonials are one of the most effective ways to enhance sales through e-commerce. Reviews on the website by your satisfied customers help new buyers make a decision about the product, and you sell more.

Disadvantages of eCommerce

Lack of Direct Interaction

One of the major drawbacks of e-commerce is the lack of direct interaction. Interactivity and body language are two vital components of communication, and they both are lost during online dealing. This loss of interaction during selling products online sometimes makes the customers move to retail shopping to understand the product better.

No Tactility

Besides not being able to communicate face-to-face with the sellers, the customer also misses the experience of touching and trying the product before buying. Many customers want to try a particular product such as shoes, clothes, spectacles, and others to make sure they are the right fit, but this is not possible in online shopping.

More Competition

E-commerce allows everyone to create a website and have their online store, increasing the competition among sellers. Buyers visit multiple stores within minutes and choose the one with better quality and lower price. High competition makes business difficult on e-commerce platforms as customers tend to choose products that cost less, and store-owners have to keep prices competitive.

No Guarantee of Quality

Talking of buying something online, there is no 100% guarantee of the product’s quality when it reaches you. It may be the same product as mentioned, but the rate could be worse than you imagined. When setting up an e-commerce store, it is important to ensure that your quality is unparalleled to keep customers loyal to your brand.

Long Delivery Time

Ordering and receiving goods is incredibly easy with online shopping, but not that quick. It usually takes 2 to 3 business days for the purchases to deliver and more if you are ordering from a distant place. Sometimes people avoid shopping online if the store does not offer urgent delivery if needed and prefer to go and buy from a retail store.

Internet access Needed

E-commerce is highly dependent on the availability of the internet as you cannot buy anything online in the absence of an active internet connection. Internet access is a must for online shopping to add an item to your cart and make payment through the card. Some website functionalities need a high-speed internet connection and may not be accessible to buyers with slow internet.

Website Crashing

While the need for the internet is inevitable when going for e-commerce, it may have a few other problems. Having an e-commerce store always comes with the possibility of your website crashing or having a glitch that may push your customer to move to another site.

Bad reviews cause Huge Losses

Let’s say you have a bad day and deliver a wrong product to a customer, and they leave a bad review. You may try to fix it, but sometimes buyers are very critical about service and do not hesitate to leave a bad review right away.

Reviews are as risky as beneficial they are for e-commerce. Good reviews can help you get more customers and direct them to your website; bad reviews can stop potential customers from buying from you.

Frauds

Online shopping comes with numerous security issues and has higher chances of fraud. As people usually pay for purchases through their credit or debit cards, there’s always a risk of stealing information leading to money fraud. If any such scam happens after shopping through your site, the customer usually leaves a bad review, and the word spreads like wildfire. Ensure a safe shopping experience for your customers by providing security and cashback when needed.

The Bottom Line

E-commerce is growing massively, hundreds of females started the business with low investment in recent years at there are a wide market and hundreds of product options to sell and the dimensions of shopping are changing. Now more people are moving towards online shopping as it offers numerous advantages like having more options, getting all information about the product, and the possibility of ordering from an online store any time of the day.

Besides the advantages, some disadvantages also come along, like lengthy delivery time and uncertainty about the quality of the product. Despite the disadvantages, e-commerce is expected to expand more with most purchases and transactions made online. If you are looking to set up online, give it a try with any of these profit generating ideas.

matt harbour
Methew Harbor

Matthew is a Co-Founder at BusinessFinanceArticles.org. Matthew was a floor manager at a local restaurant in Wales. He lost his job after the pandemic and took initiative to make a team and start the project.

Filed Under: Commerce

7 Advantages and Disadvantages of Centralization

Last Updated on January 12, 2022 By Methew Harbor Leave a Comment

If a centralized authority is omnipresent, it’s easy to say that centralized systems are bad. But what does it mean to have a centralized system? In this article, you will find the advantages and disadvantages of centralization and how to decide if it’s perfect for you.

What is Centralization?

Centralization is when a single point of control is in charge of all the business decisions, planning, information, and resources. It also means that the head office should control all the resources and information.

Centralization makes it easier for a single person to make decisions and deal with the people and resources that make the business run. It is the process of having one person or team lead all of the operations and functions of the company. But no system is perfect, so it has got a few cons too.

debt management plan pros and cons

Advantages of Centralization

A centralized approach can give you greater control over your business and give you a larger platform to grow your business. Now let find what your business can do with centralization:

Efficient decision making

In a centralized structure, the decisions are made by top management. It makes the decision-making process fast and efficient. Important decisions can be taken immediately and coordinated with all relevant branches and managers. It is much important at unsustainable times to keep the organization working smoothly.

Improved work quality

With pre-defined procedures and duties, each employee knows their responsibilities. It results in a better quality of work. With managers supervising departments, the uniform outputs have high quality.

A clear chain of command

The centralized organization has a clear chain of commands and a defined hierarchy of authority. There is a clear path of authority delegation, and junior employees know who they have to report to. Centralized organizations normally have a taller structure with the vertical chain of commands following from directors to managers and then employees.

Focused work vision

A clear mission statement and goals are a vital part of centralization. Such organizations have a focused work vision with clear communication lines and work delegation to achieve it.

Less operational costs

With a clear chain of command, the operational costs are as everyone has defined responsibilities. Key players take decisions from the company headquarters and delegate them to the right persons. It reduces the outsourcing costs as everyone is well aware of his job responsibilities.

Proper communication channels

Proper communication channels are established in centralization. It helps indirect supervision and control to facilitate quality results without any work duplication or quality issues.

Uniform Actions

Uniformity of action is another perk of centralization. The decisions from the top are delegated and performed by relevant individuals. Each organization branch has specific equipment and skilled labor.

Disadvantages of Centralization

Centralization can be risky as it can lead to other problems. The biggest risk is that you’re not able to get the best talent to work for you. Central control results in uniformity of actions to bring smoothness and efficiency in tasks execution.

Bureaucratic Leadership

Centralization is similar to the Bureaucratic structure. Here the employee’s work is only to implement the decisions and follow senior management instructions. The low-level staff feels demotivated as they have no input in the decision-making process. If there is any inconvenience in work, then the senior management blames employers for that due to the bureaucratic leadership style.

Employees are not loyal

In centralization, employers are treated more like working machines. As a result, most employees are not loyal in centralized organizations. Employee loyalty comes from personal initiatives. They can introduce their creativity and suggest ways of performing certain tasks.

Poor work control systems

Executives form decisions to be implemented by employees. But if they don’t have an efficient control system to get work done from employees, it will fail to get the desired job done. Employees gradually become reluctant to perform, which results in poor decisions at the executive level that never get implemented.

No individual initiatives

The main problem of centralization is employees are not involved in the decision-making process. With it, unique ideas and initiatives are never appreciated. It prevents employees from making any suggestions and decisions. They follow the procedure as it’s written.

Slow Work

Centralization results in slow work. The decisions passed from the top take considerable time to take effect and get the job done. Due to formalities, the work implementation is always slow.

Decreased efficiency

Due to the bureaucratic leadership, slow work with no individual initiatives, the employee’s work efficiency decreases adversely.

No work specialization

A jack of all trades in the master of none. As a single individual takes all decisions in a centralized structure, the organization lacks efficient handling of special tasks.

Is your Business Centralized?

If you are in charge of your own business in some way, ask yourself some tough questions. While it’s important to have some autonomy when running your business, what is it that gives you that autonomy?

It’s important to have some autonomy in your business, too, if you are its owner. If your business is in any way centralized, then you are, in essence, taking control of it under someone else’s power. And though centralization is not always bad, it is very important to make sure that you do not keep your business centralized.

What is the Best Centralization Strategy?

A centralization strategy is a strategically implemented requirement that an organization or business must adhere to. It is generally defined as the requirement that an enterprise must implement to address concentrations of power and reach an ever-increasing level of performance and efficiency. Most centralization strategies require the development and implementation of processes and practices that can ensure compatibility and consistency.

It is a way to organize your entire business by having a central repository of information that’s centralized. It makes it easier for you to get your information on the road and work on your business operations on the same platform.

Final Takeaway

Maybe it’s not good for you to centralize your business structure, but if you’re good at risk analysis, you can still use centralization in certain situations. With the advantages and disadvantages of centralization, you can decide the best for your business. In the end, what you want from a system is equal advantages. If that’s not possible, then it’s time to ditch the system altogether.

matt harbour
Methew Harbor

Matthew is a Co-Founder at BusinessFinanceArticles.org. Matthew was a floor manager at a local restaurant in Wales. He lost his job after the pandemic and took initiative to make a team and start the project.

Filed Under: Business, Commerce

Consumer Behaviour – The Things to be Aware of Moving Into 2021

Last Updated on February 18, 2022 By Ali Dino 1 Comment

For many worldwide economies, the pandemic shows no sign of easing, with the UK under its third national lockdown and having significant impacts on consumer spending and confidence. 

Overall, consumer spending fell in December at the fastest rate in six months as the lockdown began to hit hard, while Barclaycard revealed that investment has contracted by 2.3% year-on-year.

With this in mind, we’ll use this article to explore changing consumer behavior against the backdrop of the pandemic, as we ask what entrepreneurs should be aware of through 2021?

1. The Rise and Rise of Ecommerce

While total consumer spending may have declined since March 2020, this has much to do with the restrictions placed on pubs, bars, and restaurants nationwide.

However, there’s no doubt that the pandemic has driven a sharp increase in global online sales, as shifting consumer behavior accelerates the trends towards eCommerce.

Overall, it’s thought that Covid-19 added an estimated £5.3 billion to UK eCommerce in 2020, with the market’s performance forecasts upgraded from £73.6 billion to £78.9 billion as a result.

Amazon alone was expected to add £2 billion following the surge in online shopping, and there’s no doubt that the demand for eCommerce will continue to increase sharply in the near term.

2. The Rise of Impulse Buying Online

Over time, consumers have become increasingly enticed by so-called “rewards systems”, which seek to place a viable value on loyal customers and help to incentivize impulse purchases.

From a psychological perspective, customers in this instance are typically driven by ‘FOMO’ (the fear of missing out), while the mere activation of reward system structures is proven to trigger various neurons and stimulate genuinely pleasant feelings.

Even the use of single words such as “sale” or “deal” can trigger such neurons and make rewards programs effective, and they represent an excellent way of optimizing sales during periods of economic austerity.

So, now is the ideal time to create a tailored and rewarding loyalty program for your customers, as this will have the dual benefit of boosting your coffers and stimulating the wider economy.

3. Creating an Immersive Omni-channel Experience

Historically, larger eCommerce players have sought to separate online and offline consumer experiences, instead choosing to create more integrated marketing campaigns that drive a higher prevalence of assisted conversions.

This type of campaign creates an immersive, omnichannel experience for customers, while it also taps into wider trends such as rising e-commerce and the growing influence of smartphones as purchasing tools.

This trend will only gather pace in the near term, with even brick-and-mortar stores being redesigned with mobile purchase points as part of wider social distancing measures.

Make no mistake; as customers continue to research and purchase products while they’re on the move, omnichannel campaigns will become increasingly effective and commonplace across the board.

Ali Dino

I am a professional blogger share guide about the Technology, Internet, WordPress, Blogging tutorial, SEO techniques, and getting traffic to the Site. I love to learn new things related to the latest technology, if you have anything in your mind please do share it with me at alidino15ch28@gmail.com Also, You can check out the informative articles at bhtnews.com

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Filed Under: Business, Commerce

Why You Should Always Have a Lawyer Look Over Your Contracts

Last Updated on October 6, 2021 By Denis Woods Leave a Comment

No matter what sector your business operates in, you are going to have to handle contracts at some point. They are a necessary part of your operations, be it a contract with an employee or a new deal with a supplier. As a result, you need to make sure that these contracts are as airtight as possible. Having your solicitor look over them is often a great move. Let’s take a look at why it is so important that you have a lawyer from Hastings to take a look at your contracts.

Compliance

One of the most important reasons to head to a lawyer will always be a check your compliance in certain issues. For example, if you are aware that some laws regarding employment have changed recently, you might want to get them looked over by experts in employment law.

Solicitors are the experts, and they are able to stay up to date with the changes constantly taking place within the world of employment law. As a business owner, many of these compliance issues will apply to your company. Before issuing a new contract to anyone, have a lawyer look it over to ensure that everything is up to date.

Of course, many employers – particularly when they are new – are reticent to take out a retainer until they are able to answer the question, how much do solicitors charge? There is plenty of scope for smaller businesses, however, as hourly rates can still be opted for over and above a retainer as your business moves through the early stages of employment.

Improvements

In addition to compliance issues, a lawyer might also be able to suggest improvements that you could make. Many try to initially draft their contracts themselves. However, the issue here is that there might be key clauses that are left out, or they might not be as strong as they could be.

By giving the contracts to a professional lawyer, they will be able to make improvements to the existing legislation to make it even better. You want to ensure that all of your contracts are as tight as possible for the most benefit to your company.

Reassurance

You might want to seek the advice of a lawyer not just when you are issuing contracts but also when you receive one. If you are not familiar with legal jargon, it is always a good idea to have an expert look things over.

Though we want to go into business with an open mind, there is no guarantee that a potential partner or supplier might slip a term in that you are not happy with. However, your lawyer should pick up on it when they review the document and can bring it to your attention. Having that extra reassurance in place can bring peace of mind to many.

No matter if it is just a small agreement with a new supplier or a big deal that could change everything for your company, you need to make sure that you have a lawyer look over the contracts at some point. It might not even be for a deal – it could be before you hire a new key team member. Whatever the reason, having a second appraisal of a contract before you either sign it or issue it is always going to be helpful.

Denis Woods

Danis Woods in Businessman, investment banker and stock exchange traders. On the same time he loves writing financial blogs to shed lights on different aspects that new and existing businessman are not aware of.

Filed Under: Business, Commerce

How to Start an Investment Partnership

Last Updated on November 30, 2020 By Lisa C. Townes Leave a Comment

Before knowing the procedure of starting the investment company you have to know what is “investment partnership”? 

Investment partnership is unlike to common business company. The basic definition of partnership means the “contribution of two or more individuals in the business”. So, an investment partnership means all the partners involved in this partnership have different liabilities and tax benefits. There is one general partner that makes decisions on a daily basis and makes a business structure. In simple words, that partner has managerial responsibilities. Other partners are not involved in managerial activities. That partner can be an individual or any entity that upholds all the managerial activities.

Who will own the managerial activities is written in the agreement. This agreement also involved the proportion of profit and loss, resolve disputes and change in ownership structure, etc.  The proportion of profit and loss is divided according to their investment ratio. They can invest money, property, labor, or skills. Investment partnership is also called limited investment company or limited partnerships.

How to Start an Investment Partnership?

There are different steps to start an investment partnership or limited partnership.

Agreement with Partners

Making an agreement is an essential part of this partnership. This agreement is made between the partners that include all the important points like the percentage of loss, profit, responsibilities of every partner, limitations of every partner, who will govern the managerial activities, etc.

Here a question arises “Why this agreement is important?”. The answer is very simple that is to avoid any future issues. When you decide to start an investment partnership you should have in your mind that you will face many difficulties. That’s why to make an agreement between the partners is an important part of this business.

Apply for GST and ABN

To start the investment partnership, you apply for the ABN.  You get ABN after register your business name. Once you have registered for ABN, the next step is to apply for GST on the behalf of ABN.

Having Tax File Number (TFN)

Every partnership must have its own TFN. Every partner in this business has his own superannuation that is very important for the partner and also for the partnership. In an investment partnership, one important thing is to look after the superannuation arrangements of each employee or partner.

Need for a Lawyer

In every partnership business, the need for a lawyer is mandatory.  All the paperwork (agreement) is done with the help of a lawyer. Your lawyer gets approval from the court and your company name registered. After name registration, you can work officially.

Final Words

Investment partnership includes two or more persons. This partnership business starts after an agreement. This agreement has all the important points related to the business like profit, loss, and manager name, etc.

 After the agreement, one person becomes a general partner having all managerial responsibilities while others work as co-workers. The manager assigns the duty of their co-workers. For becoming the partner you can contribute assets, money, skills, property, and labor.

You can start your company after officialized your company name. First, you name your company, then take the application form from the country’s capital. You fill the form and attach the required documents. After that, you need a lawyer for court work. Your lawyer helps you to officially register your company name.

lisa
Lisa C. Townes

Lisa is a passionate travelers. She spends 3 months every year visiting different places worldwide. She has visited almost every famous place in the world. She herself is an affiliate blogger

Filed Under: Business, Commerce

Importance of Commerce

Last Updated on November 12, 2021 By Lisa C. Townes 1 Comment

Commerce belongs to the branch of business. It is related to the process of trade and any kind of activity happening between two people and parties with the exchange of money.

The main role of commerce in business is distribution. Whatever the products are produced. If there is no availability of resources and raw material on time then there is no product ready for sale.

Commerce help in the distribution of all required resources by efficiently calculating and analyzing the situation so that the consumption process will be completed on time.

According to James Stephenson: Commerce is the well-planned process for the exchange of goods and services between two parties in the industrial world.

In a wide way: Commerce is that part of a business that includes all, directly and indirectly, activities related to buying and selling of any product with the exchange of money.

Importance of Commerce

There is other importance of commerce which are mentioned below:

  • Satisfy human demand
  • Raise standards of living
  • Commerce generates link between producer and consumer
  • Increase employment opportunity
  • Increase the economy
  • Help in the expansion of trade and aids
  • Commerce help in growth in industrial development
  • Encourage international trade by promoting its advantages
  • Help underdeveloping country
  • Commerce help in emergencies.

Satisfy Human Demand

Human demands are increasing day by day. Scholars divide human demands into two classes that are named as basic demands and secondary demands. Food, health, education, and a peaceful environment are included in basic needs while in secondary demand luxuries of life like electronics, vehicles, and easy means of communication are included.

Commerce help in the distribution of all required resources and raw material need for the consumption of product and goods on time. It also plays a vital role in trading which helps in the availability of any product and technology to the whole world. By this commerce somehow fulfills human never-ending desire and also promotes social welfare.

Raise Standard of Living

The standard of living relates to the lifestyle of members of society. If the majority numbers of people can afford to consume more and advanced products then their standard of living is high. To raise the standard of living, commerce plays a significant role by making every product available for every person around the globe.

To consume expensive and advanced products, consumers should be able to secure them first. Commerce basically helps to manage the right thing at the right place and thus able to improve the standards of living of humans.

Commerce generate link between consumer and producer

Products are produced for means of consumption. Consumption of products is the ultimate goal of companies and manufacturers. Commerce creates a link between seller and buyer through wholesalers and retailers. So that the product can reach their consumers on time.

Commerce helps to provide complete product information and specification to consumers through advertisements and salesmen. By conducting marketing research manufacture are well aware of the likes and dislikes of consumers.

This help to locate those specifications in a product to meet consumers’ need. By this commerce create a direct link between the manufacturer of the product and the consumer.

Increase employment opportunity

The growth of the commerce industry and trade increases the requirement of employees in their related corporate sectors like banks, transport, warehouse, and marketing.

The increase in their financial, marketing, and production process need more worker to handle it. It boosts the employment rate of the country by providing job opportunities to millions of people in it.

Increase the Economy

GDP of any country is directly related to production. Production and manufacturing contribute 80 percent of the net income of the country. Commerce helps in the growth of production and consumption of the product.

It also helps in the export and imports of goods from other countries. If any country needs raw material for the production of any good then they can import it through effective commerce. Thus we can say that commerce has a major role in the growth of the economy.

Help in the Expansion of trade and Aid

With the growth in the trade and commerce sector. There is a need for expansion and modernization seems in aids of trade. Aids of trade are related to sectors like banking, transport, finance, and marketing. With smooth and well-organized commerce, these means of aid to trade can be modernized and expanded to meet advanced world requirements.

Commerce help in growth in industrial development

Commerce helps in the smooth process of production and industrial development. Without efficient commerce, Keeping records and managing the data is very difficult. Commerce help to meet the consumer’s need by providing the desired product on time.

While on the other hand, it provides raw materials and goods to the manufacturer so that the production process will not be delayed. Hence we can say that commerce help in an increase of the growth in industrial development and production in the country.

Encourage International Trade

Through commerce, countries can exchange their surplus goods and products with other countries. With easy transportation and communication, countries can buy and sell their products internationally and earn foreign money. Foreign trade has some laws and international standards that save the countries from any loss and fraud.

Help under developing country

Underdeveloping and developing countries can import skilled labor and technical information from developed countries while developed countries can import raw material from under developing countries. These exchanges help to make the financial condition of the undeveloped countries stable.

Commerce help in Emergencies

During emergencies like natural disasters, earthquakes, floods, and wars. Commerce help to locate the essential requirement like food, medicine, and other reliefs to those areas for help.

Conclusion

Commerce is related to business. Effective commerce increases employment opportunities and demands of workers in its related sectors like banking, marketing, warehouses, and transport. Commerce helps to manage the record and data for efficient results.

It increases the industrial development and production level of the country. Commerce also plays a vital role in import and export and directly impacts countries’ GDP. So if countries pay interest in their commerce sector then it will give them benefits in different ways.

lisa
Lisa C. Townes

Lisa is a passionate travelers. She spends 3 months every year visiting different places worldwide. She has visited almost every famous place in the world. She herself is an affiliate blogger

Filed Under: Commerce

What are trade meaning, nature, and different types of trade?

Last Updated on November 16, 2021 By Lisa C. Townes 3 Comments

Trade involves the transfer of goods and services from one person to another person with the exchange of money. Economics considers trade as a separate market in the corporate world. In the early years, about the mid-80s trade is the process of direct interchange of products and services from producer to consumer.

But now in the modern and global era, this process is expanded and involved a number of people. Initially, products and services are first delivered to the wholesaler in huge quantities; from this, they distribute to retailers and at last, reach the actual consumer of the product. Every person involved in this exchange charge differently and is responsible for delivering desire products to consumers on time.

Trade is an important part of human life. It’s not conducted only to earn money but also to fulfill the requirements and needs of a product consumer. Trade is a cycle that makes an easy supply of different and innovative product range in every region of the world.

From trade a person from the west can taste the spices of Asia and Asian people can enjoy the ease of technologies introduced by the west. Trade makes living standards of human advance and now humans are getting addicted to it.

Type of Trade

There are two types of trades. Which are

  • Internal and domestic trade
  • External and foreign trade.

Internal Trade

Internal trade is home trade. It is conducted between different regions and geographical locations of the same country. It helps to maintain a level of coordination and exchange of goods between every city of the state.

Internal trade is subdivided as

  • Wholesale trade
  • Retail trade

Wholesale Trade

It is the process of buying products of huge quality from manufactures and then distributing them to retailers so that they sell them to consumers. Wholesalers are used to supply the product to a retailer since manufacturing and production are happening. wholesalers are the middle man between retailers and manufacturers because companies can’t sell their products direct to consumers. There are specific charges of wholesalers that depend upon the quantity and service of the product.

Retail Trade

In this, retailers buy a small number of goods from wholesalers and sell it to the end consumers. It establishes the link between wholesalers and consumers. Also, it is the last step to make the product available for consumers to use. There are two types of retailor i.e., large and small retailers.

External trade

External trade is the process of selling or buying products and services from one country to another. It is also called foreign trade. It has no boundary, anyone from the globe can buy and sell anything to any region and state of the world. It makes business global and makes the easy availability of every product for the whole world. There are some national and international limitations and laws for external trade which save traders from any fraud.

External trade is further divided into three sub-trades.

  • Export trade
  • Import trade
  • Entrepot trade

Export Trade

When trading occurs between the trader of one country and the trader of another country by selling any product it is called export trade. For example, traders in America sell any product to the trader in Germany.

Import Trade

When a trader of one country buys any goods from the trader of any other country called import trade. For example, traders located in England buy any products from traders in America to sell them in its region.

Entrepot Trade

When a trader of one country purchases any product and goods from the trader of any other country and makes some changes and business integration in it for reselling this product to any other country is called entrepot trade.

For example, the trader in America purchases any spare parts, machinery, and raw material from Japan and Russia and then restructure it to make a new product and sell it to other countries.

Conclusion

Trade is the process of selling and buying goods and services from one person to another. Trade can take place both nationally and internationally. It makes the life of humans easy by making the easy accessibility & availability of every technology and advanced product for everyone. Trade also helps to raise the economy of countries and has a direct effect on GDP.

lisa
Lisa C. Townes

Lisa is a passionate travelers. She spends 3 months every year visiting different places worldwide. She has visited almost every famous place in the world. She herself is an affiliate blogger

Filed Under: Business, Commerce

E-Courts: A Pressing Priority

Last Updated on July 25, 2020 By Khalid Faheem 1 Comment

The primary ambition of e-courts is to make the justice delivery system, thrifty, crystalline, expeditious and accountable by limiting the paper filings.

E-courts are designed to make legal mechanisms easier and more user friendly. In an e-court, the entire work is accomplished digitally wherein, the knowledge that is shared and set up is stored as a directory and corresponded to a particular server that can be accessed by litigants, judges, and advocates.

Difference Between E-Court and Computerized Courts

An Electronic Court means a location where issues of law are adjudicated; in the existence of Judge(s) and which has a well-developed infrastructure. An e-court is in contrast to a computerized court.

In the case of e-court, everything is done in a “Tech environment” with Internet and other Information Technology (IT), whereas a computerized court is nothing more than a court having computers and basic level hardware and software.

Importance of E-Court

The e-courts are about providing IT to enable courts to make justice dispensing system budget-friendly and lucrative. This would be constructive for both improving the court processes and providing citizen-centric services.

The key bargains of setting up Electronic Courts discovering a justice serving apparatus that is transpicuous, conducive, affordable, time-saving, safeguards the interests of witnesses, reduces the backlog of cases, and most importantly scale down the number of deceitful activities.

Challenges in Setting up e-courts

Challenges include the lack of harmonization, correspondence between various departments, training a large number of employees, lack of technical workforce in courts, and cognizance amongst litigants, advocates, and their welcoming to the system change.

  1. Cost Intensiveness– E-courts will also prove to be capital intensive as setting up state of the art e-courts will require the disposal of new-age technology.  In the distant future, e-courts may face a lack of funds.
  2. Cyber Security- While on technology, a big entanglement will be cybersecurity. However, the government should initiate remedial steps to cure this problem and devise the Cyber Security plan.
  3. Insufficient infrastructure- we can also keep in mind concerns related to insufficient infrastructure and non-availability of electricity and internet connectivity in most of the mid-tier cities and towns.\

Solutions to address challenges in e-courts

  1. Pre-decided framework– To address the aforementioned challenges we can firstly and make a policy for provoking the setting up of e-courts. It is important to draw up a well-defined and pre-decided framework as it can help in laying a clear protocol and direction to the e-courts scheme.
  2. Upgrading present infrastructure- An important e-court related would be to rehabilitate the present infrastructure. The current judicial system does not support establishing the e-court, which needs to draw up by the government.
  3. Access Security– One aspect that needs to ponder upon is the deployment of a robust security system that provides secure access to case information for suitable parties. The security of e-courts infrastructure and system is of predominant importance.
  4. Awareness Campaign- Creating awareness around e-courts through roadshows and seminars can help to bring to light the facilities and the ease that e-courts can bring in…

Final Deduction

The e-court mechanism needs the executive and the judiciary to certify their resolve to support an expeditious, structured, and quality justice delivery in the country. It is also important to discuss the steps required to conquer the various challenges facing the justice system. Solutions that will address the challenges such as inordinate delays in disposal of cases in courts, easing access to speedy resolution disputes.

Setting up e-courts can bring blatantness and answerability in the judicial system as they can bring a lot more judicial reforms in a country while helping in dealing with the long-pending cases. E-courts will prove to be a major step in the evolution of country’s legal skeleton and will play a major role in uplifting the confidence in the judiciary.

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Khalid Faheem

An attorney specialized in corporate law practice. A researcher, social and legal activist.

Filed Under: Business, Commerce, Technology

Different Types of Joint Ventures

Last Updated on September 24, 2020 By Jason Obrien Leave a Comment

A joint venture can be generally defined as a business consensus in which more than one parties – shared owners – agree to pool their individual resources for some common business purpose. In doing so, each party holds responsibility of sharing the costs, profits, losses, and risks equally or as per their shares.

The term ‘joint venture’ generally means investment and typically entails a type of strategic partnership of individuals or companies, and that a particular partnership for which the joint venture is made, is expected to grow by the parties.

Although quite similar to a partnership, it exhibits some key differences with the latter. For example, while a joint venture is oriented about a single project, partnerships are usually about the ongoing business(s) in all regards.

Some other characteristics of the joint venture which are worth mind bearing are:

  • Equally shared profits, losses and expenses.
  • Termination when a project is completed (unless stated otherwise).
  • The death of a person (also called as a joint venture) does not terminate the joint venture.
  • No joint venture holds the power to terminate the joint venture in the middle of the project and thus the project has to be completed.
  • Each party has a complete control to manage all the assets designed to be used in the joint venture, and
  • A contract must exist between the parties entailing the workings of the joint venture.

There can be many types and varieties of joint ventures depending upon the scenarios under which a joint venture is being executed. To understand this, let us look at some of the types with examples to not only gain a comprehensive understanding about different concepts used in business regarding to joint ventures but also their possible applicabilities.

Affiliate Partnerships / affiliate marketing

An affiliate partnership is a type of joint venture in which two individuals, programs or businesses come in league with each other to promote the products of both the parties. It has also become the most common way of earning money online, and once established it can be a good source of passive income too.

For example, a blogger can become an affiliate venturer in that it affiliates a selected company e.g., by placing a link that would lead the readers directly to the site about which the blog has been written. In this way the blogger has done the job of promoting that company’s product via the affiliate link.

Affiliate Blogs are the best examples of an affiliate venturing. This is a product review site that will publish reviews regarding different types of products available on Amazon compiling them into lists and comparison tables ordered 1 to 10. This way, this site might be funded by Amazon which in turn gains traffic from another market channel which can be Google.

Real Estate Joint Ventures

It is a type of joint venture in which two or more parties agree to compile resources and work mutually for the development of a real estate project. Most common are the scenarios in which experts in the field of real estate management work with capital providers in the business.

A real estate joint venture can be explained by a scenario in which there is a company which owns a piece of land far away from where the company is located.

So, they find a person who lives in the same place where they own land and also that person holds expertise in construction and real estate management.

In this way, a joint venture can take place between these two parties whereby the company takes the responsibility of providing the capital and the expert takes care of the responsibilities if building the office.

Financing Agreements

It is a bit riskier type of joint venture agreement because it involves getting financial assist from a private party. It helps one to execute the business which might have been halted due to lack of proper capital investment. But, for risk management, often it is advisable to hire business lawyers for insurance of one’s legal rights.

Vertical Agreements

These are the agreements between two parties or organizations belonging to a production or distribution chains. These groups / parties / organizations create joint ventures thus coming together for a common goal with a given market.

It is typically a case in market between buyers and suppliers. In such cases, maximum gains are usually attained by suppliers while limiting the gains for buyers.

A suitable example for this type of joint venture comes from VitracEgypt – an Egyptian jam company. A person named Abdel Nour, the founder of his jam company, went into a joint venture with an Egyptian company Vitrac so that this company provides surplus fruits of Egypt and a French partner for providing the appropriate equipment and techniques for production of fruit jams.

Horizontal Agreements

A horizontal joint venture is a type of partnership in which different companies being in the same line of the business and transactions happens between these partner companies.

Moreover, these different companies may function so that e.g., if they are involved in selling a product, they will do so to their customers.

Jason Obrien

Jason is the Marketing Manager at a local advertising company in Australia. He moved to Australia 10 years back for his passion for advertising. Jason recently joined BFA as a volunteer writer and contributes by sharing his valuable experience and knowledge.

Filed Under: Commerce

16 Major Difference between Public and Private Finance

Last Updated on October 7, 2021 By Lisa C. Townes Leave a Comment

The term “finance” is associated with revenue and expenditure. Public finance is a branch of economics that deals with the government’s revenue and expenditures of an economy. If it is related to the private sector, it is called private finance.

Finance includes those means by which we make various types of payment. It may be defined as the provision of money at the time of need. In other words, it is the arrangement of money sources and the acquisition of funds for the satisfactory conduct of business activities.

Finance consists of providing and utilizing the money, capital rights, credit and funds of any kind which are employed in the operation of an enterprise.

George Terry

It may thus refer to investing in borrowing and spending of money with proper manners for the operation of the business.

Finance is important and essential for the success of any enterprise. Without proper finance, no business can be run smoothly. So a sufficient amount of capital must be provided in order to achieve desired results from the activities.

Sources of Business Funds

The balance sheet represents the amount that is supplied by the contributors. Assets are shown on the right-hand side of the balance sheet which refers to the use of funds. Liabilities are on the left side of the balance sheet which shows the sources of funds. These funds are employed temporarily by the creditors and are expected ultimately to be paid back with the sum they have advanced to the business. But owners make a permanent investment of funds to the business.

Creditors

This source of loan is obtained for short term intermediate and long periods. The repayment of this loan is made on an installment basis if it is more than one year. Creditor’s fund is generally grouped into the following main titles on the liabilities side of the Balance sheet.

Accounts Payable

This is the result of the supply of goods services to the customers. No credit document is used in this kind of credit dealings.

Notes Payable

It arises from the sale of goods, the supply of services, or a loan of funds from the financial institution. It is represented by a written document i.e. promissory note etc.

Securities

Large-size firms may issue secured or unsecured bonds or promissory notes when various term funds are required. It is divided up among a number of creditors. Each creditor holds written evidence or promises to pay for his share of the loan on a future date.

Mortgage

It represents that the firm has accepted a loan from the commercial bank or investment bank for a long period of time against the security of building, land, and machinery.

Outstanding

It refers to the accumulation of indebtedness amount up to the date of the closing books. These generally include the items which have accrued but have not been actually paid. They represent accumulating wages, rent, salaries, interest, and taxes which are found on the liabilities side of the Balance sheet.

Owners

The owner’s investment appears in the Balance sheet by various heads in various forms of Business Organization.

Sole Tradership

The invested amount by the owner may be increased by profit and decreased by losses and withdrawal. The owner’s interest in a sole tradership generally finds a single title in the Balance sheet.

Partnership

Owner’s interests are generally considered similar to the sole traders in the Partnership. But in the partnership, the profit is distributed among the number of partners and if there is any loss, the same partners are to bear it. Therefore the owner’s interest in the partnership is not constant but it may increase or decrease at a rate varying with the profit or loss of the firm.

Public finance vs private finance

Differences Between Public & Private Finance

Private: It deals with the revenue and expenditure of the private sector.

Public: It deals with revenue and expenditure of the government sector (public sector)

Time Period

Public finance is related to one year time period whereas private finance is concerned with daily, weekly, and monthly budgets, etc.

Income vs Expenditure

In public, revenue follows expenditure. On the other hand, in private finance expenditure follows revenue.

Deficit Financing

In the case of the deficit budget, Govt. can issue new notes. On the other hand, the private sector has no authority to issue new notes.

Nature of Budget

In the public sector, the deficit budget is appreciable. In the private sector, the surplus budget is appreciable.

Compulsory Loans

The government can take compulsory loans from different financial institutions to meet its expenditure whereas the private sector cannot do it.

Secrecy

A government budget is no more secret, rather Govt. publicizes its budget through T.V, Radio, etc. On the other hand, the private budget is tried to be kept secret.

Nature of Projects

In public finance, Government has to complete long term projects. On the other hand, the private sector has a short terms project to complete.

Nature of changes

Public finance is concerned with remarkable changes whereas the private sector is concerned with minor changes.

Written Document

A public budget is a written document whereas a private budget is not a written document.

Audit System

Govt. revenue and expenditure are regularly checked by an audit system. On the other hand, there is no audit system in private finance.

Foreign Assistance

The Government can depend upon foreign assistance but in private finance, there is no chance of any foreign aid.

Direct or Indirect Source of Income

In public finance, the source of income is indirect i.e., various taxes whereas in private finance source of income is direct.

Prior Sanction

Govt. takes prior sanction from its cabinet, national assembly, senate, etc whereas, no prior sanction is required from any authority.

Future Planning

There is long term planning while in private finance short term planning is the motive.

Use of Financial Resources

In public, the main objective is the social welfare of the people whereas, in private resources are used just for maximum personal satisfaction.

Record of Finance

The private may or may not keep the record of its finance whereas Govt. keeps the permanent record of its finance.

Finally

We can conclude that the finance of both the private and public sectors is concerned with revenue and expenditures. Anyhow, we can differentiate private and public finance on the basis of certain grounds.

lisa
Lisa C. Townes

Lisa is a passionate travelers. She spends 3 months every year visiting different places worldwide. She has visited almost every famous place in the world. She herself is an affiliate blogger

Filed Under: Commerce

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