E-commerce - what is it?

"Ecommerce" or "electronic commerce" refers to the trading of goods and services over the Internet. In other words, it is the online equivalent of your bustling city center or brick-and-mortar store. The number of Amazon Prime members in the world now exceeds 200 million, and an estimated 2.14 billion people worldwide buy goods and services online.

Among the ways in which people purchase and sell goods in retail is through e-commerce. It is not uncommon for some companies to sell their products exclusively online, while others use e-commerce in conjunction with physical stores and other distribution channels as part of a broader strategy. However, e-commerce allows startups, small businesses, and large companies to reach global markets and sell products on a large scale.

How does an e-commerce website work?

The purpose of an ecommerce website is to serve as your online storefront. The system facilitates the exchange of goods and services between buyers and sellers. Your virtual store is where you display your products and online customers make their selections. Essentially, your website serves as the product shelves, sales staff, and cash register for your online business channel.

There are many ways businesses can create their own commerce sites on dedicated domains, create their own branded store experience on a platform such as Amazon, or do it all at once.

How does an e-commerce business operate?

An e-commerce company sells products or services online in order to generate revenue. The types of products or services that an ecommerce company may offer include software, apparel, housewares, and web design. Using social media and email, as well as a single website, you can operate an ecommerce business.

What is the process of e-commerce?

By using various electronic channels, e-commerce facilitates the exchange of goods and services between buyers and sellers. It is important to provide your customers with a channel of access, such as a website or social media, so that they can locate and purchase products and services. An exchange of goods or services is then enabled by a payment processor. Upon successful completion of the transaction, a confirmation email or SMS is sent to the customer, along with a printable receipt.

In the case of a purchase of goods, the seller ships the goods and provides the customer with a tracking number by email or SMS. The service provider can contact you to schedule and complete the service if the transaction is for a service.

How to start an e-commerce business

There are various steps involved in starting an ecommerce business, depending on factors such as what you wish to sell. The management of inventory and fulfillment is not necessary if you are selling services, for example. Nevertheless, if you plan on selling products online, inventory and fulfillment will likely play an important role in your business.

Getting started is as simple as following these steps:

Identify potential business opportunities

If you intend to sell a product, make sure there is a demand for it

Establish a plan for selling and shipping products to customers

Manufacturers and suppliers can be found here

The channels through which you will sell your product online (for example, an Amazon store) should be chosen.

Upload products to an online storefront or website

Identify your fulfillment strategy and create a plan for it

Promotions can be used to attract customers

For more information, please refer to this guide on starting an e-commerce business.

A truck from Amazon prepares for delivery outside of a fulfillment center

Which types of e-commerce exist?

Shopping online can be done in a variety of ways, and ecommerce is no exception. Ecommerce is characterized by several common business models, such as:

It is a form of business to consumer (B2C) sales where businesses sell to individuals (end users). Models with many variations are the most common.

B2B - Businesses sell their products and services to other businesses. There are times when the buyer resells products to the consumer.

A consumer to business transaction occurs when a consumer sells to a business. Customers of C2B companies have the option of selling to other companies.

Consumer-to-consumer - Consumers sell to other consumers. Consumers are connected to businesses through online marketplaces.

The business-to-government sector involves the sale of goods and services to governments.

A consumer-to-government transaction occurs when a consumer sells to a government or government agency.

A government or government agency selling to a business is known as G2B.

In a government-to-consumer transaction, government agencies or departments sell their products to consumers.

The customer shops online from the comfort of their own home

What is the location and method of e-commerce?

Every day, online shopping evolves and shifts. Many people shop using a computer, a mobile device, a tablet, or another device. Their behavior includes browsing websites, visiting social media pages, and participating in thriving virtual channels. The following is an overview of three different methods of conducting e-commerce in the present day.

Mobile commerce

In 2023, mobile commerce is expected to account for more than 43% of total retail ecommerce sales (up almost two percent from 2022). With portable devices in the hands of consumers worldwide, it is not surprising that m-commerce will account for over 43% of total retail ecommerce sales.

Increasingly, people are researching products and making online purchases using their mobile devices. It is crucial that your online store is optimized for mobile devices as this trend shows no signs of slowing down.

E-commerce for enterprises

E-commerce for enterprises is defined as the process of buying and selling products to large businesses and organizations. Enterprise ecommerce describes the practice of selling a variety of products or brands online by a large company.

E-commerce via social media

A wide audience can be reached through social media marketing and promotion of ecommerce stores. You can use social media not only to connect with friends and family, but to attract customers to your business as well. It is possible to engage customers in an informal setting when social media marketing is done correctly.

You can utilize social media to:

Bring in new customers

Increasing awareness of the brand

Sales generated online

A retailer celebrates an online sale through ecommerce

Is e-commerce advantageous or disadvantageous?

Similarly to any sales method, ecommerce can have both advantages and disadvantages. Do you think e-commerce is a good fit for you? The answer to this question will depend on your business goals, your intended audience, and other factors. The following considerations should be taken into account.

E-commerce benefits

There are several advantages to conducting sales online. There are a number of benefits associated with e-commerce, including:

The company is experiencing rapid growth

Reach out to a global audience

Easy online ordering of products.

This generally results in lower operating costs

Directly connects consumers with the company

These factors all provide strong incentives to participate in e-commerce. We will examine each in more detail in the following paragraphs.

A rapid growth rate

According to Amazon, U.S. small- and medium-sized businesses exported more than 225 million products to international markets in 2021, generating a staggering $2 billion in revenue from international sales. 3.9 billion products were purchased by Amazon shoppers every minute, which is approximately 7,500 items per second. 

A global marketing presence

Prior to the advent of the internet, a business's reach was restricted by the number of customers who could physically enter a store. As a result of e-commerce, you can now reach customers all over the world. As internet usage has increased and social media has become more popular, e-commerce businesses are finding it easier to reach a diverse new audience.

Is this something you knew?

You can increase your visibility, reach more potential customers, and increase sales by using sponsored advertisements.

Hundreds of thousands of businesses and brands benefit from Amazon Advertising by getting their products in front of over 200 million Amazon Prime members worldwide. 

Find out more about Amazon Advertising

Ordering products is easy

Through e-commerce, customers have access to a wide range of options and can make purchases from anywhere. Amazon provides users with the option of sorting and comparing products based on price or features. The online payment process is further streamlined through innovations such as Amazon Pay.

Efficiencies are improved

A website can be created and maintained for less than the cost of operating a traditional brick-and-mortar store. If you do not need a large warehouse or retail space to launch an e-commerce business, you do not need to lease retail space, hire employees, or hire a team of management.

As a result, low overhead is achieved. Rent and building maintenance are not a concern. In contrast to a physical store, an online store is open 24 hours a day without the need for monitoring or staffing.

Your brand can be launched on social media or on a store like Amazon rather than building your own website using website building tools and services. Online channels are widely used by many businesses to sell their products.

Access to direct-to-consumer services

In today's electronic age, e-commerce brands have the ability to directly engage their audiences through the internet. To capture your audience's attention, you do not need a large billboard or television advertisement. It is possible to customise your brand and marketing to meet the needs and wants of customers, including special offers and personalised product recommendations.

The next step for an e-commerce retailer

E-commerce challenges

There are a number of reasons why some businesses may avoid e-commerce, including:

Face-to-face interactions are limited

Difficulties with technology

Security of data

Fulfilling orders at scale poses a number of challenges

Let us take a closer look at each of these potential pitfalls.

Face-to-face interactions are limited  

Certain transactions and businesses require face-to-face interaction. Bringing the full force of your personality into an online space may be challenging, depending on the type of product, service, or sales style you offer.

Maintaining authenticity online can be accomplished by keeping your brand story at the forefront of everything you do. In contrast, if you prefer to communicate with your customers by email or phone, you may find this disadvantage to be very beneficial.

Difficulties with technology

Sales can be negatively affected by technological challenges. In the same way that a hiccup in your supply chain may prevent you from receiving products on time, issues with your internet connection or a hard drive malfunction may result in a significant loss of time and money.

Keep in mind that no matter what technical issue may arise, there will likely be a solution or preventative measure that can be taken. Maintain a regular backup of your data. An established and trusted technical infrastructure such as Amazon can help mitigate these risks.

Security of data

Information storage and sharing are important to customers. Your privacy policy should be clearly explained to your customers in order to build their trust. By doing so, you demonstrate transparency and reassure your customers that their personal information will be protected.

It has been Amazon's goal for decades to provide a secure shopping experience, and companies that sell on Amazon enjoy long-standing customer trust. In order to avoid putting your customers' data at risk, you should use a secure payment processing service when hosting an e-commerce store on your own domain.

Scaling up shipping and fulfilment

You may find it simple to package and ship orders from your garage or spare room when you are just getting started with e-commerce. It is important to keep in mind, however, that as your business grows, order fulfilment becomes a much more involved process. You may find yourself scrambling to fulfil orders in the event of sudden increases in orders. You can reduce your business's burden and keep your customers satisfied by utilising a service such as Fulfilment by Amazon.

You can grow your business by selecting the right e-commerce fulfillment service.

Have you heard of this?

Anti-counterfeiting measures are taken by Amazon on a proactive basis

Using Amazon's automated protections, we are proactively detecting counterfeits and removing them from our stores. Efforts are being made by Amazon Project Zero to drive counterfeit activity to zero by combining the strengths of Amazon and brands.

Take a look at Project Zero's website

E-commerce tools represent common implementations

How can an e-commerce store be successful?

Every high-performing e-commerce business consists of a few key ingredients. Prior to any other considerations, you should focus on the product and your target audience in order to set yourself up for success. You should also take into account your brand's messaging and the user experience of your store. The fulfilment process should also be considered, ensuring that the products are delivered in a timely manner in order to ensure maximum customer satisfaction. Here is a detailed explanation of each of these critical components.

Exceptional products

Ecommerce brands that are successful rely on high-quality, reliable products and services. You should develop a product that addresses a customer need or challenge that is unmet. Additionally, the price must be competitive.

Ecommerce businesses are made or broken by the quality of their products and their pricing. Investigate your competitors' products and the market value of similar products in order to get a sense of what types of products they are selling.

What makes a brand compelling?

The concept of a unique brand stands out, but it takes more than an excellent product to establish a great brand. Your business's vision and purpose should be clearly communicated in order to capture the attention of your customers.

Why is your business necessary? What benefits will your products provide to your customers? In order to answer these questions, your branding should convey the answers.

Make sure you spend time thinking about your brand's appearance and feel. Your business' origin and mission can be expressed in a simple, compelling manner if you dig deep.

Have you heard of this?

If you want to create a unique shopping experience for your brand on Amazon, you can do so.

On the Amazon detail page, A+ content helps businesses showcase their product features and brand story in rich text and images to drive conversions, potentially increasing traffic and sales.

The best way to build your Amazon brand

Customer-centered approach

In order to attract loyal and enthusiastic customers, you should define your ideal audience. What is the target market for your products? As a result, you should direct your marketing efforts accordingly.

Maintain the momentum of your business as it grows by identifying who will be moved by your brand story. Focus your efforts on an audience that will appreciate your brand, rather than chasing after buyers who do not need what you are selling.

A seamless online experience

A user-friendly online store is essential. Making a purchase feels effortless when an online store's online experience is well-designed. A lengthy check-out process may lead to customers abandoning their shopping carts before completing their transactions, resulting in a decrease in sales.

When e-commerce stores are successful, they streamline the checkout process so that the focus remains on the products. Ensure an intuitive and straightforward user experience, and bask in the glow of happy customers by eliminating any unnecessary steps.