The internet has significantly changed the way businesses are conducted all over the world. Most organizations have integrated the internet into every aspect of their business and offer their products and services online. With globalization, there is no stopping the use of the internet as more organizations are going international by launching their products online.
The popularity of Electronic commerce or eCommerce is not waning and will continue to rise as the internet becomes a part of people’s daily lives. This brings more attention to the aspects of eCommerce. One of them is how companies implement business ethics in eCommerce.
In this article, we will discuss some of the main ethical issues that impact companies involved in eCommerce and understand what it means to manage them properly.
What is eCommerce?
eCommerce is one of the most important applications of the internet, and it has dramatically revolutionized the way we shop. Shopping online provides undeniable flexibility in time and place. It provides a platform where the exchange of products and services is over the internet.
The simplest definition of eCommerce is the buying and selling of goods and products online, but it can also cover any kind of commercial transaction facilitated through the internet. eCommerce and E-Business are not the same. The latter refers to all the aspects of operating an online business, while the former is the transaction of goods and services.
eCommerce began on August 11, 1994, when the first-ever online sale happened. A man sold a CD from the band, Sting to his friend via the website, NetMarket, which is an American retail platform.
Since then, there has been no stopping eCommerce. It keeps on evolving to make products easier to be found and bought via marketplaces and online retailers. Sellers from freelancers to small businesses to large corporations benefit from eCommerce. It enables them to sell their goods and services at a scale that is impossible with traditional offline retailing.
For those new to eCommerce, here are the four main types of eCommerce models that best describe the transaction between consumers and businesses.
- Business to Consumer (B2C) – Selling of goods or services from a business to an individual consumer.
- Business to Business (B2B) – Selling of goods or services from a business to another business
- Consumer to Consumer (C2C) – Selling of goods and services from one customer to another, like in eBay.
- Consumer to Business (C2B) – When a consumer sells a product or service to a business or organization. A classic example is when an influencer offers exposure to a product or service to their followers for a fee.
Some examples of eCommerce include the following: retail, wholesale, dropshipping, crowdfunding, subscription, physical products, digital products, and services.
Ethical Business Practices in eCommerce
As per NiaWigs owner Justina Blakeney – Ethics is having the right values. It can refer to what people want to do, but it’s really more about understanding and exploring a few different ideas that form the basis for judging specific behaviors and norms.
In eCommerce, ethics often boils down to how an organization treats its customers and employees while being governed by the personal ethics of the entrepreneur. Policy decisions should be made with these factors in mind, as well as the impact that these decisions will have on procedures, outcomes, and systems.
It is interesting what the pandemic has done to eCommerce. It has brought out the inequalities that are already persistent in the online business ecosystem. The ethical challenges that the industry is facing today have taken a new meaning.
To make it easy to determine whether eCommerce companies are implementing ethical business practices or not with these factors.
Transparency: Companies should always be truthful and clear about what they do. eCommerce entrepreneurs need to remember that building up a strong relationship with the customer can have more of an impact on their business. An eCommerce business should be candid for the public to trust its products, services, or mission.
Integrity: Brenton Thomas who runs his own eCommerce Marketing firm Twibi Agency agrees that Online businesses should have clear policies, guidelines, and procedures for preventing any inappropriate behavior. They should always stay true to their principles even when pressured to do otherwise.
Trustworthiness: It refers to the business fulfilling its commitments and promises to its customers, which is crucial for the customer to do repeat business.
Loyalty: This is a two-way street as the business partners in these relationships with their consumers, investors, and their staff. Establishing a strong loyalty that translates to business profits.
Fairness: eCommerce companies must use only transparent and fair methods to get ahead of their competitors. Equality and fairness should be reflected in the company’s hiring process, business partnerships, and marketing initiatives, says Cheenu Lott from HaroPress.
Compassion: In eCommerce, it means accomplishing business goals while causing the least damage to the environment and the consumers.
Respect: Businesses whether online or offline, should respect the rights, privacy, and dignity of consumers is a vital ethical standard for eCommerce. It should include protecting the privacy of their customers’ information.
Lawfulness: eCommerce ethics should include abiding by the legal obligations and regulations and working within the boundaries of the legal system to get more honor and credibility from the community and its customers.
Responsibilities: Taking on ethical responsibility is an important issue that should be dealt with responsibly by eCommerce companies. Keeping your values and mission in mind, you can explore what your responsibilities are.
The Ethical Issues in eCommerce
As the internet phenomenon brings the greatest conveniences, it also poses plenty of challenges. Ethical issues are one of the most significant among them. The internet has become the hotbed of unethical behavior, and the ethical issues about using the internet have provoked critical problems for consumers. These issues are cybersquatting, phishing, web spoofing, online privacy, and web tracking.
The Role of Ethics in eCommerce
Times have changed, and the time when companies only do business for profit’s sake is long gone. Today, a company’s ethical values play a greater role in consumers’ choices, and eCommerce is no exception.
Steve Rose of MoneyTransfers adds – For a company to be ethical, it should meet a set of environmental and social criteria necessary for corporate social responsibility and sustainable development. Ethical businesses should include a production chain that utilizes responsible production and work methods, including showing respect to employees.
Business ethics no longer pertains to more marketing value. Consumers are now more mature and no longer believe in this approach. If they find a company’s action no longer matches its words, the news will quickly spread out, and its reputation will suffer.
The consumers who are purchasing online are more volatile. In eCommerce, we can see how ethical values play a decisive role in acquiring consumers and building their loyalty.
The Best Ethical Practices in eCommerce
Over the last two decades, we have seen unstoppable growth in eCommerce. This unconventional way of doing business has resulted in many unexpected issues and ethical challenges. Companies need to understand these issues and what needs to be done to develop a respectable online brand.
Here are some of the best practices an eCommerce business should apply.
Using a well-designed. website, photos, well-written copy, search engine optimization, and credible social media followers can create a strong online brand. However, be careful not to go overboard as it can cross the line into misrepresentation, a common problem in e-business.
Another common ethical issue in eCommerce is intellectual property violations. These violations can be due to ignorance and poor legal advice, while others are deliberate. Some of the most common violations include copied logos, images and content, selling counterfeit items, and unauthorized use of files (audio and video).
One of the most commonly discussed issues in eCommerce is data protection and information security. Companies that sell products and services online collect information from customers like credit card and bank information and their details.
Aside from personal information, customers are also required to set up an account with a username and password. Hackers attempt to breach websites and eCommerce software to get the information and use them to steal money from customers or commit identity fraud.
Checking product quality when buying online is different from when shopping in a brick-and-mortar store. The customer has to rely on the merchant to give a product that matches the photos and description on the website.
Many online retailers sell products purchased from wholesalers, manufacturers, and other suppliers. The vendor who owns the brand has several stipulations under which the product can be sold using a third-party retailer. Some eCommerce retailers fail to comply with these requirements. It often leads to confusion and creates branding problems for the vendors.
There is a communication barrier between the customers and retailers in eCommerce. Customers cannot just walk into a store if they have questions, receive a defective product or service, need assistance, or want a refund.
They can only rely on the communication channels made by online retailers. It comes in the form of online chat, phone-based customer service, or email. Some unethical eCommerce companies make it difficult to get help or delay taking action until the customer gives up.
As the world changes, new ethical concerns have risen in eCommerce. The industry should look within, to see how they can make it better before the customers demand them to be better. There is a cost for an eCommerce business to move in a more ethical direction, but it will be more costly not to do anything for a more ethical eCommerce.