What Is eCommerce?

What Is eCommerce?

Do you mostly rely on the Internet to buy whatever you need? Have you already sold something online yourself? Or do you plan to launch a virtual store with actual results and profit? That’s right; we will be talking about eCommerce in today’s article. Probably no one would deny that it’s the most strikingly growing trend of the last few decades worldwide. Saying that the Web is a whole marketplace by itself sounds almost like a pleonasm, don’t you think? So let’s discover together how electronic commerce does work. First, it would probably be a good idea to understand what the term means. Then we should also talk about the different models before giving you the essential tips to create your own online business.

eCommerce Meaning

Let’s get back to the main title of our article: what is eCommerce? Sometimes also spelled as ecommerce or e-commerce, the term stands for electronic commerce. Broadly speaking, it refers to any kind of trade carried out through an electronic/online environment such as the Internet. The parties involved (usually a seller and a buyer) don’t have to meet physically. Depending on the context, they can finalize every step of the transaction electronically (order placement, payment, follow-up, etc.). However, the concept is not limited to a simple sale/purchase procedure. We will see why later on. Also, remember when we said ‘a few decades’ in the introductory paragraph? It wasn’t an exaggeration.

Electronic commerce has an already half-century-old history behind it, given that the first attempt is traced back to 1971. ARPANET (Advanced Research Projects Agency Network), somewhat considered the ancestor of the Internet, was most likely the first interface to conduct a virtual sale. The experiment was about some… cannabis trade between two university institutes in the United States. Another country, France, used to swear by Minitel throughout the 1980s and 1990s. This was a videotex online service connected to telephone lines. Almost every French household had one. It was the go-to tool for innumerable activities, from shopping to the annual school registration of the kids. So, in fact (and all the more with today’s upgraded versions), eCommerce encompasses many varieties of exchange and interaction.   

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ecommerce models

Models of eCommerce

So what are those varieties and models? We have previously hinted at the fact that it’s not only about selling and buying. One has to also take into account the core structure of the exchange. Is it a direct one, carried out via retailing (from the seller to the customer)? Is there a hosting entity or information system involved, as is the case with electronic markets? One’s initiatives and strategies will depend on the answers given to such questions. When it comes to models per se, we may distinguish the following ones:

  • Business-to-consumer (B2C)
  • Business-to-business (B2B)
  • Consumer-to-business (C2B)
  • Consumer-to-consumer (C2C)
  • Business-to-administration (B2A)
  • Consumer-to-administration (C2A)

We won’t expose the details of each one here since we want this article to be rather in a ‘beginner’s guide’ spirit. By doing so, we hope to help a greater number of readers at once. We strongly recommend you explore the inherent requirements and subtleties of each model, though. See which one(s) fit(s) your objectives best. There are many online resources that focus separately on each. 

So what should you do in order to launch and grow your own online commerce? Have you already thought about it or maybe even made your first steps? Here are the basic suggestions that we would like to share with you:

find your niche

Select Your Niche

This may sound too simply obvious. Well, let us tell you that it is not. At all. There’s a common mistake that many aspiring entrepreneurs keep making nowadays. They get overly excited about a dozen business ideas waltzing in their minds. So they want to invest immediately in all of them at once. This approach is wrong, as can be. Sorry if it seems boring, but moderation, focus, and patience are the keys to long-lasting success. Take it easy, and don’t try to promote hair dye, polyethylene pipes, and taco sauce at the same time. You won’t possess an all-in-one empire overnight unless you have inherited it from a multimillionaire uncle.

Decide selectively and realistically what you can produce and/or sell. If there will be several products, make sure that they are somewhat relevant to one another (e.g., shampoo and conditioner). Be aware of your area of expertise. Speaking of producing, do you have the means of producing something on your own? Or would selling an already available product be a more manageable choice in your case? Will you commercialize material products or rather ideas (e.g., teaching activities)? Many questions indeed, but in the long run, you will be happy for having taken your time to answer them. 

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Similarly, you will also have to think about your eCommerce model, as already mentioned previously. For instance, you should know whether you are going to deal directly with consumers or rather with other companies. 

Several factors should be considered when making up your mind. One of the most essential is the level of competition. Don’t pick a business type already saturated with a huge amount of competitors. But don’t aim for a desert island either. Make sure at least that it has some similarities with already existing niches.

supply potential

Check Your Supply Potential

This subtitle will have different meanings depending on what you have decided to sell. We assume that you want to see your eCommerce business ‘live long and prosper. In other words, you are probably aiming for an activity that will last longer than a few weeks or months. Thus you have to check your resources and be sure that you will be constantly supplied. This is one of the crucial aspects determining the feasibility of your project.

Are you planning to sell your expertise and knowledge through an online course? Great. Do you think that you won’t need any assets for this kind of job? Not so great. Even when your primary business tool is yourself, well, you still have to update… yourself. If you hope to conduct teaching or coaching activities only with your old acquisitions, you will fizzle out pretty quickly. To refresh your intellectual capital and know-how, ensuring that they fit today’s context. Don’t hesitate to invest in additional training courses to learn more about your field.

Will you rather commercialize tangible goods? Here again, you should look at the bigger picture. Let’s suppose that you have decided to go for one of the latest trends like natural hair dye products. Are you able to make them yourself? Namely, do you have a garden or another place where you can cultivate henna? Or would collaborating with an external producer and/or manufacturer be better? What if you receive big orders? Have you started looking for a distributor that can allow you to work within a wholesale system? You should also think about the aspects related to delivery. So yes… another bunch of questions to brainstorm about.

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build your persona

Build Your Persona

Sure, you will certainly have to work on buyer personas, aka virtual customer models. Those will help you determine your target audience. But what we are pointing out here is your own persona. In Jungian terms, that’s the part of yourself (‘social mask’) that you present to the outside world. We may also call it your ‘business image’ in this context. Indeed, you will need to build a specific image to nurture your eCommerce efforts. This process comprises several steps. First of all, choose a name for your company and/or brand (the two may be different in some cases). It doesn’t have to be necessarily short. However, it should definitely be original and easy to remember.

Then come the logo and the slogan. These have to be compatible with your name and products/services. Easier said than done, though. If you lack inspiration or experience, don’t hesitate to contact a marketing agency. Field experts can help you design your brand from A to Z. Plus; this can be an opportunity for you to start thinking about your overall marketing strategy. For example, social media is usually excellent for promoting eCommerce initiatives. But it also requires to be aware of some subtleties in order to be successful. A marketing professional or even a whole creative team can show you the way and make things clearer for you. You can read our how to create a brand article to get going!

legalize your ecommerce business

Legalize Your Business

No standard formula here. This is because the legal procedures will also largely depend on the country where you live and/or work. So please examine carefully the local legislation that applies to your business. Don’t omit any detail, nor listen to some supposedly cunning people claiming that it’s alright to cheat the law. Sure, you can save a few pennies and hours of work if you decide to cheat. But trust us, the price that you would have to pay in the long run is always much higher. If you want to avoid any remorse in the future, just build your eCommerce on a reliable and transparent basis.

Even if we can’t give a precise list applicable to all locations, we can still recap some common elements. Launching an electronic commerce activity usually requires:

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  • Registering a unique domain name usable for your online store.
  • Selecting the appropriate legal structure (limited liability company/LLC, joint-stock, corporation, partnership, etc.).
  • Getting a professional identification and tax number (for example, EIN in the United States). 
  • Applying for the mandatory licenses and permits.
work on your online store

Work on Your Online Store

Yes, we are using the term ‘work’ deliberately here. Because it’s not just about creating a store and then walking away. Sadly enough, we often run into eCommerce stores that look like some online waste, totally neglected, and outdated. So before even getting started, take some time to reflect on your deepest motivation. Do you want to open a shop just to imitate others, until you get bored of it within a few months? Or are you aiming for something more sustainable? Are you ready to follow and update your business on a daily or at least regular basis? Will you avoid being one of those sites still displaying obsolete/non-existent products and prices from 2003?

At this point, you will need a website. You may build it by yourself if you have the necessary skills and tools. You may also choose to work with a webmaster and/or developer. Such professionals can even guide you about which software you should choose. Indeed, platforms like Shopify, Squarespace, or BigCommerce are already able to handle many tasks for you. But you will still need some basic knowledge to use them properly. 

Here are a few ‘must haves’ for your website:

  • Attractive, speedy, and user-friendly interface.
  • Visible and understandable buttons.
  • SSL certificate to protect your clientele’s confidentiality (credit card information, etc.).
  • Well-organized and well-categorized products pages.
  • Exhaustive description for each product (properties, price, return policy, etc.).
  • Various and flexible payment/shipment options. 
  • Links to other marketplaces like eBay and social media pages to reach out to more customers. 

FAQs about eCommerce

Do I really need a website for my eCommerce business?

Well, that’s almost the whole point with eCommerce. The electronic and automated aspects of it are what make the thing appealing for consumers. They get assured about the fact that they won’t have to go to physical stores anymore, right? Instead, they are happy to save time by ordering what they need in just a few clicks on their technological devices. Without a website and online store, you don’t really have any chance to fulfill such expectations. 

You’ve been quite vague about the different models of eCommerce. I want to know which one is the best, though.

Various surveys and statistical studies show that B2C (business-to-consumer) tends to be more popular than the others. Besides, it’s a more manageable model, even for beginners.

How many products can I sell in my shop?

We have already written a warning about the importance of moderation and prevision when one starts a business. But as long as you know what you are doing, then the sky is the limit. Nothing prevents you from selling thousands of products if you wish.

What if I change my mind once having started? Aren’t there easier options for skeptics like me who don’t want to invest in a website?

You can try all-in-one platforms such as the aforementioned Shopify. That one offers a 14-day free trial period. Plus, it takes care of many procedures on your behalf, from marketing to shipping.

Where can I learn more about eCommerce?

Online classes are usually a practical solution. Udemy and Skillshare are among the sites that you may want to explore. 

Getting Started with eCommerce

Indeed, this article was nothing but a foretaste. As you can see, eCommerce is above all about asking and answering the right questions. Now we suggest you get back to the first sections of the article and start thinking. Spread your available cards on the table and see how you can turn them into a profitable project. Once you have managed to refine your ideas, you will be ready to materialize them. We wish you success in your online business journey.

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Graduating from a Language and Literature Department, I have used my advanced skills to edit, proofread and translate. I also enjoy writing short stories in my spare time. Now, with the rise of digital marketing, I utilize my skills to write blog posts on the latest topics.

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