Question

Describe how does the economics of pooling enhance the relative competitiveness of e-commerce business models

over traditional, retail store based business models, particularly with regard to specialized, low turnover product items

that have few demanders in a specific geographic region?

Answer 1

Economics of pooling has enhanced the conpetitiveness of e-commerce business models over traditional, retail store based business models. It can be explained by looking into different factors like geographic regions, niche products etc-

It has overcome geographical limitation- Retail stores are limited to specified areas but e-commerce website accesses to the whole world.

Benefits of lower costs- E-commerce lowers the cost of advertising, marketing, real estate, personnel. This cost is shifted to the customers as a coupons or deals which lowers the cost of the product for consumer.

Elimination ofcost and time related to visit physical stores- E commerce provides conveniency to the customer as he doesn't have to visit the store. E-commerce facilitates customers to visit the store at the click of their finger.

24/7/365 access- These websites doesn't have week off or limited time opening. It has access of 24/7 and 365 days .

Niche products which have few demanders in specific geographic region- Here products get its buyers and sellers across globe through the social networking or online searching.