1) Introduction
Gone are the days when customers stood in long queues waiting to grab their favorite products from their trusted brick-and-mortar stores. Nowadays, with just a few clicks here and there, customers can get products delivered to their doorsteps. Such is the power of eCommerce, which is changing the dynamics of the retail industry.
eCommerce, or the buying and selling of products and services over the internet, has been a driving force behind the growth of many economies. It has simplified the process of trading and strengthened customer relationships.
However, despite its popularity, only a few sellers have been able to adapt and benefit from online stores. Reason: the lack of knowledge and resources.
If you also find yourself in the same boat, this article might help you. Let’s start with understanding the need behind eCommerce.
2) Why is eCommerce needed?
Often, with a busy lifestyle, people struggle to make time for their basic duties. Things like bill payments, bank transactions, grocery, apparel, stationery shopping, etc., keep getting delayed. This is where eCommerce comes into play and makes these tasks accessible from the comfort of homes and offices.
Apart from the accessibility factor, the following also make eCommerce vital for customers.
2.1) Customer experience
Shoppers can walk into renowned hypermarkets, supermarkets, or even nearby local shops, but unless they get an experience worth remembering, they won't return to those stores.
With online stores, customers get a seamless experience. They don't have to scour through aisles to find products or wait in long queues to pay bills. They can simply add products to their shopping cart and pay for them instantly.
2.2) Lucrative offers and discounts
Will you buy a product at its original price if you’re also getting it at a discount at some other store?
Often products available at brick-and-mortar stores are high-priced or require customers to pay their full value. Online stores, on the other hand, provide several offers and discounts to customers all year round, urging them to shop more from them and save every time.
2.3) 24*7 Availability
Most offline stores don't work around the clock, making it difficult for customers to visit them any time they want. Unlike them, online stores operate 24*7, 365 days, enabling customers to shop at their convenience.
2.4) Wide variety of products
Have you ever searched for a product in multiple stores and still not found it? Well, you're not alone.
Retailers often fail to stock all variations of a product in stores, many times, customers have to settle for a less favorable option. However, with a wide variety of products available at online stores, customers don't have to face this issue and can buy anything as per their preferences.
Now that you know why eCommerce is important for people, let's move on to its types and advantages.
3) What are the different types of eCommerce businesses?
Though eCommerce sounds quite straightforward, it involves a variety of business models serving different purposes. Given below are some popular business models with appropriate examples.
3.1) Business-to-Consumer (B2C)
B2C is the most popular eCommerce business model that allows sales between businesses and customers. A perfect example of this model is buying products from online sellers.
3.2) Business-to-Business (B2B)
In B2B eCommerce, transactions take place between businesses. For instance, a retailer buying from a wholesaler or a wholesaler buying from a manufacturer are all examples of B2B transactions.
3.3) Consumer-to-Consumer (C2C)
This eCommerce model encompasses sales of products and services between customers. Websites like eBay and Amazon that allow customers to sell and purchase products from other customers are the epitome of the C2C model.
3.4) Consumer-to-Business (C2B)
Breaking the traditional retail model, C2B allows customers to sell their products and services to businesses. iStock by Getty Images, which permits businesses to buy photographs directly from photographers, is a true example of this model.
3.5) Direct-to-Consumer (D2C)
A newer form of eCommerce business model, D2C allows the sale of products and services between eCommerce sellers and customers without any outside interference.
Netflix is the best example of this model as it doesn't rely on retailers, distributors, or wholesalers for the sale of its products. Instead, it directly targets and approaches customers.
3.6) Consumer-to-Administration (C2A)
This eCommerce business model involves transactions between individuals and the government. Examples of C2A include paying health services costs, social security costs, or taxes.
3.7) Business-to-Administration (B2A)
As the name suggests, the B2A eCommerce model involves businesses selling their products and services to government bodies. For instance, organizations performing tasks on behalf of the government related to legal documents, social security, etc., all come under the B2A model.
Though they are largely evident, let’s take a quick look at the advantages of eCommerce.
4) What are the advantages of eCommerce?
Along with ease and accessibility, eCommerce offers some unique benefits to both customers and online sellers. Let's take a detailed look into a few of them.
4.1) Lower operational costs
Unlike brick-and-mortar store owners, eCommerce business owners don't need to invest large sums in buying or renting a place or hiring professionals to attend to customers. They can simply start their business by creating a website and storing supplies in a pocket-friendly warehouse.
As for dealing with customers, they can either handle it themselves or include one or two members in their business group.
4.2) Access to technology
Having a traditional store restricts sellers from introducing multiple technological advancements. Whereas in an online store, eCommerce sellers are free to experiment with different technologies and work towards automation and a seamless customer experience.
4.3) Personalized experience
Generally, customers' shopping experiences end as soon as they pay and leave the brick-and-mortar store. However, that's not the case in an online store.
The moment customers shop from eCommerce websites, their journey begins, and they keep receiving personalized emails, Whatsapp, and text messages until they unsubscribe from the portal.
4.4) Stronger customer relationship
eCommerce sellers put a lot of effort into providing users with a personalized shopping experience. They offer users special discounts, suggest products based on their past shopping experiences, and keep them updated about new product launches, building stronger and long-lasting customer relationships.
4.5) Larger audience reach
eCommerce enables online sellers to reach a wider audience through various marketing and promotional methods. It gives them access to more budget-friendly options and effective customer acquiring options.
5) What is the impact of eCommerce?
Ever since its introduction, eCommerce has revolutionized the retail industry. It has not only helped online sellers build their businesses but also added value to the customers' shopping experiences, thereby proving its worth and growth in the future.
Some of its impacts on business and society include:
5.1) Elimination of middlemen
For ages, middlemen exploited both business owners and customers. They’ve charged hefty amounts from sellers to deliver their products and services to the customers, forcing them to increase the cost of products above the required margin.
With the introduction of eCommerce websites, online sellers could connect with customers directly and describe their offerings.
5.2) Better marketing alternatives
Earlier, pamphlets, hoardings, newspapers, radio or television advertisements, and word of mouth were the only ways to market a product. But with the growth in social media, businesses have found new ways to promote their products and reach a bigger audience.
It's expected that in the future, eCommerce will urge online sellers to adapt and find more unique marketing options to survive in the industry.
5.3) Global Opportunities
Many a time, brick-and-mortar store owners are restricted to the geographical area they are serving. Due to a lack of knowledge and options, they are unable to target a larger audience and grow their business.
With eCommerce websites, these sellers can reach people at distant locations and offer their products and services.
5.4) Higher profits
Unlike traditional stores, online stores operate around the clock enabling users to shop at any time, from anywhere. And due to their availability, they have a higher chance of earning more profits than traditional stores in the future.
5.5) Job creation
Since eCommerce involves many new tools and practices, business owners have to hire professionals to solve their problems. This has led to the creation of many job profiles and income opportunities for people.
5.6) Technological awareness
Earlier, people weren't technologically sound. Most of them had no idea how to use the gadgets and apps around them. But with eCommerce and the introduction of several social apps, customers became more tech-savvy and comfortable around applications and gadgets.
Now that we’ve understood the foundational aspects of eCommerce, let’s move on to discuss how to start an eCommerce business. If you’re thinking of stepping into online selling, you should take a note of these points.
6) How can you start an eCommerce business?
Starting an eCommerce business is a lot similar to opening up a brick-and-mortar store, except for a few steps. Here are the steps you’d need to follow:
Step 1: Conduct thorough research and finalize your line of business
Just like prior to opening a shopping center you check out the location, housing colonies around the place, nearby food options, etc., before opening your online store, you must research the industry you are targeting and finalize the niche you will be working on.
Questions like whether you will deal in products or services, how you will cater to your customers, what's your startup cost, and how you will meet the legal or product regulations should be answered before establishing the business.
Step 2: Name your business and choose a legal structure
Once you've decided on your line of eCommerce business, move on to naming your organization. Choose a name that does justice to your business's operations and register it with your state's authority.
Later on, decide about your company's legal structure, whether you want to create a sole proprietorship, corporation, LLC, or partnership, and apply for the same to your local government.
Step 3: Apply for EIN
Though not all entities require an employee identification number (EIN), it's safe to apply for one to differentiate your personal earnings from your business. An EIN helps revenue systems identify your business as a legal entity and permits it to participate in trading operations.
Step 4: Get hold of permits and licenses
As a seller, you are expected to obtain the necessary permits and licenses required for the smooth running of your business. Generally, for sole proprietorship or partnership, business owners don't need much paperwork, but in the case of other entities, you'll have to apply for an operating license.
Moreover, based on your line of business, you might need to apply for other permits like -
a) Sales tax permits
b) Signage permits
c) Health, environment, or safety permits
d) Professional and trade licenses (industry specific)
e) Building and construction permits (in case you are opening both eCommerce and traditional store)
Step 5: Create your eCommerce website
After completion of all paperwork, you will become eligible to open an eCommerce website. For this, you need to select an eCommerce platform like Shopify, WooCommerce, Magento, or Squarespace as per your preference, and then create a domain similar to your business name.
Once that is done, you can alter the theme, design your webpage, and start serving your customers.
Step 6: Generate a product list and obtain products
As mentioned in the first step, by now you might have decided how and where to source your products from. But before you delve into that, make sure you have created a list of what you will be offering to your customers.
Unless you do so, chances are that you'll overstock products and might incur losses.
Step 7: Market your business
Last but not least, you’ll need to market your brand to acquire new customers and retain old ones. Marketing your eCommerce website is crucial for gaining more customers and earning profits. Unless people know about your brand, the possibility of your business growing is negligible.
Therefore, you must use the available social apps and tools to garner more organic traffic for your website.
7) Best marketing strategies to drive more sales for eCommerce business
Every online seller wants to increase sales and profits. But, at times, even after following multiple marketing strategies, they fail to accomplish this goal.
That's why we've compiled a list of marketing strategies to help you increase traffic and get more conversions.
7.1) Upsell products
Upselling is a well-known technique for earning more profits. However, when gone wrong, it can cost loyal customers.
Therefore eCommerce business owners should always keep in mind that they offer upsells relevant to the original product and stick to the customers' price range.
7.2) Lessen abandoned carts
Abandoned shopping carts are the biggest problem in the eCommerce industry. They not only decrease sales but also take away potential customers.
That's why eCommerce sellers should find engaging ways to target abandoned carts. They could send persuasive emails or opt for a Whatsapp text to add a personal touch.
7.3) Get more email subscribers
Finding marketing posts on social media handles has become quite a common thing. Usually, customers just skip such posts and move on to other entertaining content.
Hence, online sellers should try to get more email subscribers and send personalized emails with out-of-the-box campaigns to gain more traffic on their eCommerce websites.
7.4) Create a customer-friendly eCommerce website
For most customers, accessibility and comfort are the major reasons to move to online stores. If they don't get that on eCommerce websites, they're likely to switch to other alternatives.
7.5) Integrate with Whatsapp and Instagram
Currently, Whatsapp and Instagram are the two most prominent social networking apps. Creating a profile of your business and posting regular content on these platforms can help you reach a wider audience and create brand awareness.
7.6) Reward loyal customers
Do you know acquiring new customers is difficult and more expensive than retaining them?
So why go the hard way when you can reward your customers and motivate them to keep shopping from you?
8) Conclusion
eCommerce is a growing sector and has the power to create many new opportunities for the economy. In recent years, especially during the pandemic, it has shown its potential and helped businesses continue operations smoothly.
In the future, we hope it can open more doors for online sellers by strengthening customer relationships and achieving greater milestones.
9) FAQs about eCommerce
Going through this article, you might have understood the major concepts involved in eCommerce. In case you didn't, take a look at these frequently asked questions (FAQs) about eCommerce.
9.1) What is eCommerce?
eCommerce is the buying and selling of products or services on an electronic network.
9.2) What are the benefits of eCommerce?
eCommerce offers a wide range of benefits, including accessibility, comfort, personalized experience, better customer relationships, technological awareness, and many more.
9.3) Is opening an eCommerce website costly?
Most people think creating an eCommerce website is a one-time investment. But it's partly true! Creating an eCommerce website can cost you a few hundred dollars. However, maintaining it will increase costs since you can't manage every aspect, like design, theme, plug-in, extension costs, and many more.
9.4) What strategies should one use while marketing their eCommerce business?
There are a lot of strategies you could use to drive more sales for your eCommerce business, including upselling products, integrating Instagram and Whatsapp, enhancing email campaigns, rewarding loyal customers, providing a seamless customer experience, and so on.