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Cryptocurrency has disrupted the financial industry, making it one of the hot topics that are discussed everywhere you go.
The technology behind cryptocurrency is blockchain, which has the potential to disrupt many other industries, let alone finance.
Ecommerce is one of those industries that has been growing exponentially for the past many years.
That made me curious about how blockchain can affect the eCommerce industry. Read on as I try to analyze the ways by which Blockchain can impact the eCommerce industry.
Ecommerce involves lots of financial transactions. This is where blockchain can play a significant role in making these transactions safer and faster.
Blockchain technologies are capable of managing user activities like searching for products, purchases, payment processing, and customer support.
Managing data using the blockchain can help avoid the risks of data leaking or cyber-attacks. Blockchain technology will also help secure your eCommerce website against DDoS cyber-attacks.
With blockchain, your eCommerce websites will get the highest level of security by using blockchain technologies in form of distributed ledgers for data management.
Distributed ledger technology (DLT) stores the digital data at multiple places at the same time, unlike traditional databases that have one central data storage.
In a distributed ledger, when data is accessed all the nodes are processed and verified to confirm the data accuracy. Thus, making it the most secure way to store the financial transaction details.
With blockchain, you as an eCommerce website owner will get absolute security and provide a safe shopping environment for your customers.
Blockchain came to the limelight with the arrival of various cryptocurrencies like Bitcoin and Ethereum. Within years, cryptocurrencies are being seen as an alternative to traditional currencies. Many countries around the world that initially opposed the use of cryptocurrencies are now accepting it.
Blockchain-based cryptocurrencies provide many benefits to both the customers and the Sellers.
Here you can find some of the benefits that you can get by using blockchain-based payment systems:
With cryptocurrencies, there are mostly no middlemen like banks, payment platforms like PayPal, or payment networks like Visa, MasterCard.
In traditional methods, for any transaction that happens through a bank or payment platform, you have to pay them a commission.
This makes the cryptocurrencies way cheaper to hold and do the transaction with. As you only have to zero or very low commission to the payment gateway providers.
There is no central authority behind bitcoins, which means people transacting with bitcoins only controlled it.
And no third party or government can manipulate or go through your transactions. Banks or governments can’t inflate or devalue the cryptocurrencies, neither the geopolitical situations have any effect on cryptocurrencies.
Cryptocurrencies are easier to use for both eCommerce sellers and buyers.
The seller benefits from low or zero processing fees, no chargebacks or international usage charges, and above that, quick and easy setup. Buyers benefit from its ease of payment, secure network, and no markup charges on paying in other currencies.
Payments done using cryptocurrencies take only a few seconds, unlike traditional currencies that can take time, especially during international transactions. There is no limitation on the amount that can be transferred or the time at which you can do the transaction.
Supply chain management is the major concern for any eCommerce business out there.
Blockchain has the potential to reduce shipping costs and provide better tracking for buyers. Many large online retailers are testing and implementing blockchain systems into their supply chains.
Using blockchain in the supply chain can also reduce the manual paperwork needed in some cases. It can reduce the need for paper bills, instead, the value of shipment can be verified using blockchain.
With international shipment, blockchain technologies can help reduce the lengthy process of the bill of landing verification. Blockchain can help automatically verify the details and confirm the authenticity of the information provided.
If you are dealing with expensive or unique products, blockchain can help in reducing the risks during the shipment. You can track and compare the parcel weight at different points to make sure things are going as normal and avoid tampering.
Blockchain can also help assure customers about the warranty and validity of the product. This can help customers make sure they get what they intend to buy and build trust among the buyers.
Overall blockchain technologies can help in cost-cutting and improving the management of the supply chain.
Blockchain can also help in improving inventory management by connecting warehouses, manufacturers, suppliers, distributors, and retailers on one platform. The blockchain can help in sharing each record of the transaction within the network of the eCommerce seller.
This will bring transparency between suppliers and sellers to better understand the demand to manufacture products as per the need.
Traditionally, inventory is mostly managed using a reactive or predictive model. In the reactive model, the inventory is ordered once it has depleted and in the predictive model, inventory is ordered by estimate when it can run out.
With blockchain, you can create a proactive inventory management system. Blockchain-based inventory management can help forecast demand accurately and help you procure the right quantity and type of products. This can help to increase your profitability by reducing the risk of lost sales or dead inventory.
Blockchain can also help avoid tampering with important data like product origin, traceability, and expiry or validity of the perishable goods. This way it makes the overall system of inventory management robust and cost-saving for you the eCommerce store owners.
With the popularity of blockchain and cryptocurrencies, many new opportunities have come up. NFTs, being the latest entrant, has generated sales of $2.5 billion in just the first half of 2021.
The use of blockchain technologies has unlocked many new opportunities that were never thought of a few years back.
The volume generated by these marketplaces is far more than that of traditional eCommerce stores. The sale of digital products using blockchain has opened a pandora box of opportunities.
The use of blockchain can help online buyers store their purchase and warranty data within blockchain. So, your buyers won’t need to find papers when trying to get the product replaced within warranty.
Also, customers won’t have to waste their valuable time to prove that the purchase is still within the guarantee. The blockchain will store all the records for you and make life easy for you and your buyers. Making it easy for your buyers to get products replaced or repaired easily under warranty.
Good or bad reviews by your genuine customers can help you improve your products and services. The excellent reviews by buyers in marketplaces can help your business gain, new customers. A fake review can damage your reputation and result in loss of business. The reputation of online businesses solely relies on online reviews that makes the legitimacy of such reviews very important.
This is where blockchain can play an important role in verifying the sources of reviews. Data stored in blockchains can help in curbing fake reviews by verifying the information with the data stored in blockchain.
By now you might have realized many ways by which blockchain can help you in saving costs. If we take it point by point by providing better security and data protection, you won’t have to deal with expensive security software. You also save money in the shape of transaction fees by opting for blockchain-based cryptocurrencies.
Further better supply chain and inventory management mean you save a lot of money by providing better delivery service to your buyers. These are some of the many ways by which blockchain use in eCommerce operations will help increase profitability.
The future for blockchain-based technologies is bright as it will help us create a decentralized internet.
Blockchain has the potential to influence many industries, but eCommerce seems to be one of the first industries after finance to get impacted by blockchain.
Blockchain in eCommerce will definitely change the industry forever by unleashing the potential. Blockchain technologies can open up many new opportunities with unlimited earning potentials.