What is Ecommerce? A complete guide

What is ecommerce?

Ecommerce is the term used to describe when people or businesses purchase and sell items or services on the internet. Ecommerce can be conducted through a smartphone application or online store, through social media platforms or on an internet-based marketplace. You can take part in e-commerce wherever you have access to the Internet. Ecommerce is a broad category that includes electronic payment, online shopping auctions online, as well as online banking. The purpose of e-commerce for sellers is to increase sales online through methods of marketing that are digital.

What is the function of e-commerce?

Once a customer has made purchase, the retailer will deliver the purchase through store pickup, shipping (or local delivery) (in the instance of physical goods) or electronically (for digital products such as PDFs, online courses as well as online consulting).

Ecommerce transactions are performed on many devices and platforms, employing various payment methods. Businesses and other applications also participate in this ecosystem, ranging from advertising platforms such as Google Ads to third-party logistics businesses to the ecommerce store applications. Let’s take a look at a few of the technologies that drive online sales.

Different types of ecommerce platforms and sales channels online

There are numerous ways to market online to customers, including owned channels such as an online store, as well as third-party platforms. A lot of online sellers prefer the multichannel strategy, which involves selling on various channels.

Ecommerce platforms

A platform for e-commerce is an option that allows users to earn money online via your own site. Shopify is a good instance of an ecommerce site structure firm that allows creators, individuals and companies that are of any size to offer their products on the internet and in person at an actual brick and mortar store.

The benefits: These E-commerce businesses typically offer everything you need to construct an online store, design product pages, and take payments via the internet, making them a simple method to establish an online brand and begin selling.

The challenges: Selling on your own website requires a constant effort to increase traffic and generate sales.

Marketplaces on the internet

Online marketplaces are selling channels that let you to market products and services to a large public. online selling websites such as Amazon as well as Etsy are also effective search engines since they’re often the first place of inquiry to consumers searching for products.

Benefits: You may sell products through marketplaces along with the functionality of your Shopify online store, using integrations that connect sales. Marketplaces usually include discovery which means you can benefit from the traffic, but with less effort to market.

Problems: Marketplaces make it difficult to create an identity as opposed to a standalone store. It is common for you to not own your customer lists, and you can only control the design and appearance of your brand or store.

Read: Google Search Leak: SEO Secrets Revealed

Social selling channels

Many social media platforms provide on-platform selling and buying functions that allow small companies and personal companies to offer products directly to customers without a storefront on the internet. Facebook and Instagram both have native shopping capabilities. You can also market to people on social networks through the Shopify Starter plan that is an affordable alternative to an e-commerce website.

The benefits:You could easily market to audiences already in place through channels you already have in place without having to create an e-commerce site.

Issues:The audiences you build on social media platforms are usually not yours to control. If you lose your account, or the platform ceases to function it will be necessary to start over.

The different types of businesses that use e-commerce are described

There are a variety of e-commerce types that are defined by the person you are and the people they are selling it to. Some useful ecommerce terms to be aware of are listed below.

B2C stands for Business-to-Consumer (B2C)

A company that sells products or services to a single consumer (e.g. an ecommerce shoe store sells a few pair of footwear directly to customers).

(B2B) Business-to-business (B2B)

A B2B company which sells products or services to other businesses (e.g. software company sells licences for its technology to small businesses).

Customer to customer (C2C)

A person who sells products or services to an individual (e.g. For example, someone sells a used sofa to another through a marketplace for buy-and-sell). Note: Once someone starts selling multiple items this manner (a old-fashioned reseller, using channels such as Depop) and their business model can be categorized as B2C.

Read: Social Media Marketing Tools for 2024

C2B stands for Consumer-to-Business (C2B)

A person is a business owner who sells his personal products and services directly to company or an organization (e.g. an organization. Hires an influencer from outside to promote their brand via the social networks).

Digitally native vertical brands (DNVB) is the DTC business that began completely online. The most well-known examples of these business models are mattress company Casper as well as men’s grooming company Harry’s.

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5 ecommerce revenue models

Apart from deciding on what kind of online business you’d like to operate It is crucial to determine what the business will do to earn profit. There are at minimum five different revenue models utilized by online sellers. They include:

1. Sales model: It is the most commonly used model employed by brands on the internet as well as physical stores. 
   
   
2. Subscription model: Popular among consumers as well as ecommerce DTC brands. This model is based on the revenue that is recurring from subscriptions to services or products.
   
   
3. Model of advertising: This model is widespread among online creators and influencers who build personal brands. By leveraging agreements for advertising (promoted material) with other companies.
   
   
4. Affiliate model: The affiliate programs also are very popular for creators with significant followings. They could or might not be selling themselves products. Affiliate Marketing earn commissions when the customer purchases products through the affiliate links.
   
   
5. Model of transaction fee: This model applies to online retailers which process financial transactions. They make money through the charging of a fee for every sale.

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