There are some problems and drawbacks of e-commerce and these are as follows:

(i)    High Risk of Internet Start Up Organizations: Many stories unfolded in 1999, about successful executives in established firms leaving for Internet start-ups, only to find out that  “get rich” dream with a dot.com was just that a dream. However, many dot.com organizations bubble busted in 2000 and onward due to various reasons like lack of good revenue model, everything is not possible through dot.com, problem related to customer satisfaction etc.

(ii)    E-commerce is Not Free: So far, success stories in e-commerce have favoured large businesses with deep pockets and good funding. According to a recent report, small retailer that go head-to-head with e-commerce giants are fighting a losing battle.

(iii)    Security: Security continues to be a problem for online business. In a 2000 economist article, 95 percent of Americans expressed reluctance to give out their credit card numbers via the Internet. For millions of potential cyber-customers, the fear of credit card theft is a real one. Consumers have to feel confident about the integrity of the process before they commit to the purchase.

(iv)    System and Data Integrity: Data protection and the integrity of the system that handles the data are serous concerns. Computer viruses are rampant, with new viruses discovered every day. Viruses causes unnecessary delays, file backups, storage problems and the like. The danger of hackers accessing files and corrupting accounts adds stress to an already complex operation.

(v)    Corporate Vulnerability: The availability of product details, catalogs and other information about a business through its web site makes it vulnerable to access by the competition. The idea of extracting business intelligence from the competitors Web pages is called Web farming, a term coined by Richard Hackathorn.

(vi)    System Scalability: A business develops an interactive interface with customers via a Web site. After a while, statistical analysis determines whether visitors to the site one-time or recurring customers. If the company expects 2 million customers and 6 million show up, Web site performance is abound to experience degradation, slow down and eventually loss of customers. To keep this problem for happening, a Web site must be scalable for upgradeable on a regular basis.

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