Initially, blockchain was used by cryptocurrencies for the storage and transfer of data related to any transactions. Later on, people started to realize the advantages that blockchain technology offers, resulting in an expansion in its use cases. Now it is used by many banks, hospitals, government offices, etc.
For those who don’t know what blockchain is, it is a public electronic ledger, similar to a relational database. It can be openly shared among disparate users, and that creates an unchangeable record of their transactions, each one time-stamped and linked to the previous one.
Various advantages of blockchain technology like faster and transparent transactions and more data security have encouraged many tech people to use and integrate it with existing services available on the internet. Let us discuss one such use case of blockchain: e-commerce, a term that we often hear about.
WHAT IS E-COMMERCE?
In simple terms, E-commerce is the buying and selling of goods and services via the internet and the transfer of money and data to complete the sales. It’s also known as electronic commerce or internet commerce.
Some examples of e-commerce include Amazon, eBay, Fiverr, etc. After looking at these names, we can predict how big the e-commerce industry is and what scope it has in the future.
As of April 2021, there are 12 million to 24 million eCommerce websites in the world. Thus, we can say that it is a very competitive industry, and only the ones that bring something new and do things efficiently with great customer experience can survive.
CAN BLOCKCHAIN BE USED FOR E-COMMERCE?
As mentioned before, blockchain has many benefits over the traditional or conventional technologies used for the same purpose of storing and transferring data. This data can be cryptocurrencies or the traditional money we use, just in the digital form.
Blockchain can be used for e-commerce. As a matter of fact, many e-commerce websites are already using it. These companies have understood the importance and benefits that blockchain holds for both the customer or user and the seller.
To add to it, according to some reports, the global blockchain market is expected to experience a surge of over four hundred percent.
Some of the advantages of using blockchain for e-commerce are:
A SIMPLE WAY OF MAKING PAYMENTS
In traditional e-commerce websites, there is a very complex system to make payments for the products or services we want to purchase. It involves many steps, and each step requires some or the other kind of data to enter. This can sometimes become very cumbersome for the user.
Other than the number of steps, there are middlemen or organizations also involved in the whole payment process, resulting in a further increase in the price of the product as now you have to pay their fees.
A blockchain can solve all of these problems as there are no middlemen involved. Other than that, the transactions are peer-to-peer (P2P), which means that when the buyer of the product sends money to the seller, it directly reaches the seller, and no intermediate fee is charged.
PRIVACY OF THE CONSUMERS
Traditional e-commerce websites depend a lot on the use of Artificial Intelligence, which is based on collecting data of the users and then using that data to predict users’ interests. This whole idea seems to be very intimidating, but the truth is that many times this data gets hacked (due to less secure systems as a result of the AI algorithms).
Hackers then sell this personal information of the users through various sources and platforms like the dark web. On the contrary, with blockchain, your data gets encrypted and locked in such a way that no one can hack it. As every transaction is transparent on the blockchain, not even the e-commerce website owners can sell your personal information.
EASIER MANAGEMENT OF RECEIPTS AND WARRANTIES
With conventional e-commerce websites, it is a tedious task to manage all receipts and warranties-related information in one place. This is because warranties are usually offered by third parties and not the website. Thus, many relational databases are required for this purpose.
With the introduction of blockchain in e-commerce websites, one can easily store each receipt and warranty as a block or a node. Thus, it becomes easier to access receipts and warranty, and the protection of store owners from customers who may want to fix or return items out of warranty is also ensured.
SUPPLY CHAIN MANAGEMENT
Supply chain management is the management of the flow of goods and services and includes all processes that transform raw materials into final products. Thus, we can say that it plays a crucial role in the functioning of an e-commerce website.
It is a very difficult process as the records of all the tasks like buying, selling, shipping, storing, etc., of an item have to be maintained. If a company does not focus on this aspect, the customer experience will be ruined, and its reputation will degrade.
Here also, blockchain comes to the rescue by helping in tasks like handling records, tracking products from their origin to inventory, and finally, the payment received from the buyer.
COSTS REDUCED SIGNIFICANTLY
As mentioned before, there are no middlemen involved in the whole transaction process; instead, peer-to-peer transfer of money takes place. This helps in reducing the extra costs charged by third parties.
Also, since it is a decentralized network, there is no interference in its operation from the government in many countries. Thus, no taxes are levied.
Blockchain also reduces extra costs in the supply chain system stemming from administrative processes.
Bezos is a website that offers eCommerce fulfillment services in the UK. What this means is that Bezos takes care of all of your e-commerce logistics. This is done by the following step-by-step procedure:
Goods in: Bezos receives your inventory in one of its warehouses either directly from you or your supplier. It will receive your products (containers, pallets, or carton boxes), check that everything is in place, and log it in the system. In less than 24 hours, your products will be stowed in your storage location and ready to be sold.
Storage: Bezos provides a storage service for your products. It could store them in pallet or shelf locations, or both. This will depend on your business profile (sales velocity, number of SKUs, etc.).
FulfilLment: When an order comes through, people at Bezos pick the products, put them in the right packaging, and put a shipping label on it. There is flexibility to customize according to each client’s needs: that could be special packaging, an insert, bundling, etc.
Last-mile delivery: They ship globally and have accounts with most of the carriers. They offer a wide selection for you to make the right shipping decision, to meet your customers’ and your own needs.
Returns: Returns are one of the most complex and expensive parts of e-commerce fulfillment logistics. Bezos helps you optimize your returns- Either a basic service (receiving products back) or customized service (re-work).
Using Bezos comes with a ton of advantages over other similar platforms. Some of these advantages are:
Scalable: Bezos has one of the largest logistics networks in the UK, called the Bezos Fulfilment Network or BFN.
Flexible: There are no restrictions on minimum volumes, and there are no long-term commitments.
Multichannel: Bezos supports all sales channels like d2c, b2b, b2c, marketplaces, etc.
Affordable: There are no monthly subscriptions, and you can pay as you go.
Data intelligence: It provides easy-to-use reporting and analytics.
Thus, we can say that Bezos is a great platform if you own an eCommerce website and want any help with the management of your logistics. Bezos.ai got you covered for everything.
Blockchain is a relatively new technology that not many people are ready to adapt to, just like any other new technology. It will take some time for people to understand it and its benefits and get used to it.
Blockchains like Ethereum have proved their worth by performing well in the cryptocurrency industry as well as in other fields like as a data management system in hospitals, offices, etc. It is all set to enter and revolutionize the e-commerce industry as well with its abilities.
Thus, it is recommended to use blockchain technology in every domain possible and use its features to the fullest. This is important if we want our systems and data to be more secure, efficient, fast, cheap, and reliable.