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.
Required
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.