E-Commerce or Electronic Commerce means buying and selling of goods, products, or services over the internet. E-commerce is also known as electronic commerce or internet commerce. These services provided online over the internet network. Transaction of money, funds, and data are also considered as E-commerce. These business transactions can be done in four ways: Business to Business (B2B), Business to Customer (B2C), Customer to Customer (C2C), Customer to Business (C2B). The standard definition of E-commerce is a commercial transaction which is happened over the internet. Online stores like Amazon, Flipkart, Shopify, Myntra, Ebay, Quikr, Olx are examples of E-commerce websites. By 2020, global retail e-commerce can reach up to $27 Trillion.
E-commerce is a popular term for electronic commerce or even internet commerce. The name is self-explanatory, it is the meeting of buyers and sellers on the internet. This involves the transaction of goods and services, the transfer of funds and the exchange of data.
So when you log into your Amazon and purchase a book, this is a classic example of an e-commerce transaction. Here you interact with the seller (Amazon), exchange data in form of pictures, text, address for delivery etc. and then you make the payment.
Characteristics of E-Commerce
E-commerce is characterized by the following features:
(i) The business tools are electronic and the application is commerce, i.e. profit motive.
(ii) Business is externally focused on those with whom business is conducted.
(iii) Most of the transactions are processed automatically.
(iv) Uses a gamut of business support services, such as inter-organizational e-mail and on-line directories.
Examples of E-Commerce
Advantages of e-commerce
- E-commerce provides the sellers with a global reach. They remove the barrier of place (geography). Now sellers and buyers can meet in the virtual world, without the hindrance of location.
- Electronic commerce will substantially lower the transaction cost. It eliminates many fixed costs of maintaining brick and mortar shops. This allows the companies to enjoy a much higher margin of profit.
- It provides quick delivery of goods with very little effort on part of the customer. Customer complaints are also addressed quickly. It also saves time, energy and effort for both the consumers and the company.
- One other great advantage is the convenience it offers. A customer can shop 24×7. The website is functional at all times, it does not have working hours like a shop.
- Electronic commerce also allows the customer and the business to be in touch directly, without any intermediaries. This allows for quick communication and transactions. It also gives a valuable personal touch.
Disadvantages of e-commerce
- The start-up costs of the e-commerce portal are very high. The setup of the hardware and the software, the training cost of employees, the constant maintenance and upkeep are all quite expensive.
- Although it may seem like a sure thing, the e-commerce industry has a high risk of failure. Many companies riding the dot-com wave of the 2000s have failed miserably. The high risk of failure remains even today.
- At times, e-commerce can feel impersonal. So it lacks the warmth of an interpersonal relationship which is important for many brands and products. This lack of a personal touch can be a disadvantage for many types of services and products like interior designing or the jewelry business.
- Security is another area of concern. Only recently, we have witnessed many security breaches where the information of the customers was stolen. Credit card theft, identity theft etc. remain big concerns with the customers.
- Then there are also fulfillment problems. Even after the order is placed there can be problems with shipping, delivery, mix-ups etc. This leaves the customers unhappy and dissatisfied.
Types of e-commerce Models
Electronic commerce can be classified into four main categories. The basis for this simple classification is the parties that are involved in the transactions. So the four basic electronic commerce models are as follows,
- Business to Business
This is Business to Business transactions. Here the companies are doing business with each other. The final consumer is not involved. So the online transactions only involve the manufacturers, wholesalers, retailers etc.
- Business to Consumer
Business to Consumer. Here the company will sell their goods and/or services directly to the consumer. The consumer can browse their websites and look at products, pictures, read reviews. Then they place their order and the company ships the goods directly to them. Popular examples are Amazon, Flipkart, Jabong etc.
- Consumer to Consumer
Consumer to consumer, where the consumers are in direct contact with each other. No company is involved. It helps people sell their personal goods and assets directly to an interested party. Usually, goods traded are cars, bikes, electronics etc. OLX, Quikr etc follow this model.
- Consumer to Business
This is the reverse of B2C, it is a consumer to business. So the consumer provides a good or some service to the company. Say for example an IT freelancer who demos and sells his software to a company. This would be a C2B transaction.
Process of e-commerce
Selling online has become easily possible nowadays. In fact, it has become one of the most popular platforms people prefer buying from.
If you plan to start a business of your own, and wondering how to go about it, then this post will help you learn the complete e-Commerce Selling Process.
Follow the steps as mentioned, and to the end, you’ll be done.
Step #1: Give your business a name; Register it
The first and foremost requirement is to give your business an identity in terms of a name. The name is something your audience will recognize your business with. Thus, choosing a good name is imperative.
Once you select a name, make sure you register it.
Why is registration important?
This is because if someday someone else comes up in the market with the same name, you will stand nowhere since you do not have proof that you own that title.
Moreover, one needs to comply with the registration as mandatory per law. Thus, it is essential to get your business registered. Each state may have its own policies; therefore, you may refer to your respective state policies for registration.
Step #2: Create a domain name and a website – Register as a seller
Once you are registered, either create your own website using a hosting platform or register as a seller. There are two different possibilities you might want to opt, i.e.
Register as a seller on popular websites like Amazon, and eBay OR start your own e-commerce business by buying space at popular sites such as Shopify, BigCommerce, etc.
The other possibility that arises when you want to set your own e-commerce store is to build a website using web hosting platforms and register your domain.
For example, buy a domain for the e-commerce platform through WordPress and install plugins that help you set up your business and sell online.
Registering as a seller on e-commerce platforms is the easiest way to start selling.
The complexity level increases when you opt for platforms to open up your own store. However, the primary benefit here is that you have your own store where you can sell unlike being just a seller on other e-commerce platforms.
You actually tend to build your own brand here. The most complicated method is to create a new website altogether to start a business.
However, if you plan to do business on a massive scale, it is the optimum choice to make.
Step #3: Upload Products
Once you’ve chosen where you want to sell and have a space to upload your stock, you may now start uploading high-quality images of your products.
Give them a name and mention their price.
If you are into selling various categories of products, make sure to categorize them. This makes the website look neater and easy to use for the customer.
Give the products a suitable description that is easy to understand and explains each and every feature of the product.
When doing business online, your interaction with customers is not direct. The customer cannot touch and feel the product physically. Thus, in order to succeed despite the demerit, it is important to explain each and everything about the product through descriptions.
Step #4: Use SEO
In order to get your website or listed products to rank on top of the Google search results, it is essential to have relevant keywords in the content.
For example, if a person is looking out for a juicer, and you have it as one of your products, then make sure your product title has the word juicer. This will help the search engines identify that you have the same thing that the buyer is looking for and will list your products on the top.
Similarly, make sure that the description along with being informative and easy to read, is also SEO optimized.
Step #5: Choose your shipping method
The next and most important thing is to choose a shipping strategy. Make sure you connect with only famous shipping companies who can make sure that they will deliver your product timely without any damage.
You are all set to start selling. You have an e-commerce store, have your shipping planned and the products are listed.
Now the buyers will simply have to click on the buy now option, make payments through the payment gateway you’ve opted for and buy your product.
In order to attract more customers, use all the digital marketing tactics and take your business to greater heights.
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