BPL Ltd is a small local retail company. The company sells a branded clothing range for 18–30 year olds.
During the last financial year (year ending 31 December 2005) the company had an annual turnover of £1.5m and an annual net profit of approximately £700,000.
The company has two retail outlets located in Manchester and Oxford, and employs five part-time sales assistants, one administrator and one manager.
Currently, sales are either over-the-counter sales at either retail location or mail-order sales from the company’s annual catalogue. Over-the-counter sales can be for cash, credit/debit card payment or payment by cheque. Mail order sales can be for credit/debit card payment and/or cheque payment only. All mail-order sales are processed at the company’s Manchester retail outlet. Last year 42% of the company’s turnover was from mail order sales.
For credit/debit card-related sales, the company operates a chip and PIN-based ePOS. All over-the-counter sales are processed by the sales assistants. All mail-order sales are recorded by the administrator.
At a recent management meeting the manager informed the administrator that he had appointed an external consultant to develop and design a web-based e-commerce facility to replace its catalogue-based mail order facility. The manager expected the new facility to be operational within the next two months.
Critically evaluate the main advantages and disadvantages to the company of using a web-based e-commerce facility to replace its current mail order catalogue facility.