Online
buying and selling has become an important part of many people's lives.
Students and parents rely on the internet to acquire and sell textbooks at
affordable prices, virtual stores allow people to shop from the comfort of
their homes without the pressure of a salesperson, and online marketplaces
provide a new and more convenient venue for the exchange of virtually all types
of goods and services.
Mechanics:
How Does Online Buying Work?
Shopping online is just like heading out to the store. You can buy all the same
things from your home computer and can sometimes even get access to better
sales.
Finding a
Product
When you shop online, you have to
start by searching for a product. This can be done by visiting a store's
website or, if you are not aware of any store that has the particular item you
are looking for or you'd like to compare prices between stores, you can always
search for the items with a search engine and compare the results.
On major
retail websites, companies and merchants will have pictures, descriptions and
prices of the goods that they have for sale. If a smaller company does not have
the means to create a website, some sites like Amazon and Yahoo! make it
possible for small businesses and individuals to display products or build
their own online stores for a monthly and transaction fee.
Other
websites like eBay and Bidz provide an auction format, in which sellers can
display items for a minimum price and buyers can bid on these items until the
listing ends or the seller chooses to award it to a buyer. Most stores also
have placed virtual customer service centers on their websites, so you can
either call, email or chat with a live customer service representative if you
have questions.
Buying and
Receiving the Product
After finding and selecting your
desired product, the webpage usually has a "checkout" option. When
you check out, you are often given a list of shipping and payment options.
Shipping options include standard, expedited and overnight shipping.
Depending
on the shipping company being used and your location, standard shipping usually
takes seven to 21 business days and expedited shipping can take anywhere from
two to six business days.
When it
comes to paying for your purchase(s), there are also different options:
- E-Check: This payment option is just
like paying directly from your bank account. If you choose to pay by electronic check, you are required to enter
your routing and account numbers. Once this is
done, the amount is taken directly from your bank account.
- Credit Card: When you pay by credit card, instead of swiping your card
like you would at a brick-and-mortar store, you type the
required credit card information into provided fields. Required
information includes your credit card number, expiration date, type of
card (Visa, MasterCard, etc) and verification/security number, which is
usually the last three digits on the back of the card, right above the
signature.
- Payment Vendors: Payment vendors or payment
processing companies, such as PayPal, are ecommerce businesses that provide payment
exchange services. They allow people to safely transfer money to one
another without sharing financial information. Before you make purchase
through a payment vendor, you'll need to set up an account first to verify
your credit card and/or financial institution information.
Advantages
of Online Trading
There are a lot of benefits to be
gained from buying and selling online. These include:
- Convenience: It is very convenient to be
able to do all your shopping from one spot - your couch!
- Cost Savings: With ever-increasing gas
prices, shopping online saves you the cost of driving to and between
stores as well parking fees. You will also save time by avoiding standing
in line, particularly around the holidays, when stores are very busy.
- Variety: The internet provides sellers
with unlimited shelf space, so they are more likely to offer a wider
variety of products than they would in brick-and-mortar stores.
- No Pressure: In a virtual or online store,
there is no salesperson hovering around and pressuring you to purchase an
item.
- Easy Comparison: Shopping online eliminates
the need to wander from store to store trying to compare prices.
Disadvantages
of Online Trading
There are also disadvantages to
buying and selling online. These include:
- Increased Risk of Identity
Theft:
When paying for your goods online, it can be very easy for someone to
intercept sensitive information such as a credit card number, address,
phone number or account number. (To read more about online scams, see Identity Theft: How To Avoid It and our Online Investment Scams Tutorial.)
- Vendor Fraud: If the vendor/seller is
fraudulent, he or she might accept your payment and either refuse to send
you your item, or send you the wrong or a defective product. Trying to
rectify an incorrect order with a vendor through the internet can be a
hassle.
Protecting
Yourself While Shopping Online
Overall, the advantages to shopping
online outweigh the disadvantages. That said, it is important to note that
while they might be smaller in number, the disadvantages can be a major
hardship.
While
shopping online, it is very important to protect yourself and your information.
Here are some tips that can help you take care of yourself:
- Invest in Technology: It is a great idea to install
antivirus and anti-phishing programs on your computer. An antivirus
program will protect your computer from viruses and an anti-phishing
program will attempt to protect you from websites that are designed look
like legitimate sites, but actually collect your personal information for
illegal activities.
- Be Careful: Vendors do not have the right
to ask for certain information. If a website requests your Social Security
number, it is probably a scam. You will need to research the company
requesting the information or exit that site as quickly as possible.
- Research: If you are searching for an
item using search engines and you encounter a store or a website you have
not heard about, make sure you check the bottom of the pages for an SSL
logo. SSL is a standard security technology for establishing an encrypted
link between a web server and a browser. To be able to create an SSL
connection a web server requires an SSL certificate.
- Shipping Check: Always read shipping policies
posted on the seller's website or beneath the product listing. Some
sellers allow you to return an item within a specific period of time,
while other vendors never accept returns.
Conclusion
Buying and selling online can be very convenient and rewarding but you always
have to protect yourself. If a deal looks too good to be true, it usually is.
If you don't feel 100% secure on a particular site, leave it and find something
else. Also make sure that your computer is well protected before you begin any
transaction that involves sensitive information. There are a lot of scams on
the internet that can negatively affect your credit score and cost you money, so be proactive
in your research to get the most out of shopping online. (For more of those
scams, see Credit Scams To Watch Out For.)