Ecommerce is here to stay, that’s a no-brainer. Over the years, the art of buying and selling has been refined so much so that people no longer have to trade face to face if they don’t want to; and it’s all thanks to ecommerce businesses.
So, what is ecommerce? And why does it seem like everyone is going gaga about ecommerce business? Because trust me, everyone is!
What is Ecommerce?
Ecommerce (also known as electronic commerce) is the art of performing various transactions ranging from selling and purchasing products and services, transferring data, money transfers through an electronic medium (the internet).
This network breaks down the barriers of distance and time, and that’s why people are going gaga about ecommerce business. Imagine being able to buy anything from any part of the world with a few clicks on your device, that’s just amazing…
How convenient is that?
Pros of Ecommerce
- Global Market Reach
With e-commerce, marketers can now reach consumers all over the world, no more geographical barriers; buyers and sellers can meet virtually without location worries. So, if you see a product that you want and is being sold in Switzerland, no worries, you can own it with e-commerce.
- Unlimited Products Choice
Consumers have a wide/global range of products and services to choose from.
- Less Costs and Pricing
With ecommerce, cost of transaction is tangibly lower as fixed costs of maintaining a brick shop is removed.
- Convenient Shopping
Like I have been saying, shopping is so convenient, right from your sitting room on your device, you can purchase whatever you want at any time of the day. A website does not have time restrictions like a shop does.
- Convenient Delivery
With ecommerce shopping, customers don’t have to worry about the delivery of products as it can be delivered right to their doorstep.
Cons of Ecommerce
- No Testing or Checking of Goods or Services
Where I come from, people usually do this “what I got vs what I ordered for thread”. Sometimes, your customers aren’t just lucky with their purchase and there’s really nothing you can do about it since you aren’t the producer.
- Online Insecurity and Fraud
There’s also the matter of cyber fraud and scams. You need to ensure that your site is secure and your customers credit card information is not at risk of being stolen.
- Data Privacy Issues
There have been cases where customer data (credit card details, identity theft etc) was stolen. Again ensure your site is secure.
- Impersonal Shopping
Shopping can feel impersonal for your customers without a salesman to guide them through, and then you won’t have the opportunity to build a trustworthy personal relationship with your customers.
Although you can always write product reviews to help connect with your customers, but no personal relationship is a disadvantage for selling certain goods.
There is still the possibility of mix ups during order filing, delivery or shipping problems, this can get customers discouraged.
- Start-Up Costs
Start-up costs might be on the high side depending on your budget and a number of factors like how you want to start your online store (using an ecommerce platform, or hiring someone to customize for you) etc.
- Risk of Failure
For those that intend to go into ecommerce business, like every other business, there is still a high risk of failure as running an ecommerce business entails a lot.
A Few Top Ecommerce Businesses
The companies listed below are top notch and will give you a good example about what ecommerce business is like and how they run, especially if you have ever used anyone of them, which you should have since you aren’t like ancient or something.
- Amazon: Amazon is the largest and most popular online retailer.
- Alibaba: Alibaba is another top ecommerce company. It is a platform for wholesale trade.
- Walmart: Walmart is also a top ecommerce company that offers a wide variety of products and services. They have a normal store as well as the ecommerce store.
- eBay: eBay is a top ecommerce company that focuses on C2C and B2C marketing.
- Shopify: Shopify is one of the top ecommerce companies that allows businesses sell their products and services in one place. Shopify has features that enables people to create their own online store on it.
- Fiverr: Fiverr is the largest online freelance services marketplace. It focuses on people buying and selling different small services at affordable prices.
- Jumia: Jumia is a top ecommerce retail business that deals largely with electronic gadgets and a variety of other products.
Ecommerce Business Models
These are the ways in which different ecommerce businesses operate.
- Business to Consumer (B2C): This is when a business sells goods and services to individual consumers. For example; when you buy a from an online retailer.
- Business to Business (B2B): When a business sells a product or service to another business, for example.
- Consumer to Business (C2B): When a consumer sells their own product or service to a business. For example; An influencer offering a business exposure to their online audience in exchange for a fee.
- Consumer to Consumer (C2C): When a consumer sells a product or service to another consumer. For example; you selling your old PS-3 game to another consumer on eBay.
Types Of Ecommerce Business
- Wholesale Ecommerce Business
This is the sale of products in bulk usually to a retailer who then re-sells them directly to consumers.
2. Retail Ecommerce Business
The sale of products and services from a business directly to a consumer without any intermediary.
3. Drop-shipping Ecommerce Business
The sale of a product that is manufactured and shipped to the consumer by a third party. In this case, the seller doesn’t keep the product they are selling, when they get an order, they purchase from a third party and have it delivered to the consumer.
4. Crowdfunding Ecommerce Business
Collecting money from consumers in advance of a product being available in order to raise a startup capital needed to bring the product to the market.
5. Subscription Ecommerce Business
The recurring purchase of a product or service regularly until the subscriber chooses to cancel.
6. Digital Products Ecommerce Business
These are downloadable digital products like courses, templates, courses etc that are purchased or licensed for use.
7. Physical Products Ecommerce Business
Sale of products that require inventory to be replenished and orders to be filed and physically shipped to customers.
8. Service-Based Ecommerce Business
The provision of a skill in exchange for a fee. Like in the case of Fiverr.
What You Need To Start An Ecommerce Business
Before going into any project at all, it is good to count your cost and know what you are getting yourself into. The same goes for starting an online store, before diving into it, there are a few things you need to know about ecommerce business and thoughtfully decide upon to get your business in full swing.
- Choosing a Product: The first step to starting an ecommerce business is to choose the product(s) or service(s) you are going to sell.
- Sourcing for the Product: Once you know what you want to sell, you need to know how and where you are going to source the products, that is get the products. Will you make them yourself? Or will it be drop-shipping? How will you source them? B2B? B2C?
- Branding: This includes getting a domain name, logo, your website, etc.
- Building your Website/ Online Store: To build your online store, you can either hire someone to do that for you, this can be very expensive but you get to design your site however you want.
Using an Ecommerce Platform
You can build a store on a platform like Shopify for a small fee. Shopify makes building an online store quick and easy. It is considered the best ecommerce platform.
Start here to build a store with Shopify.
With all that said, buy me a cup of coffee, or share this article.