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What Is eCommerce?
Before we get into the practical details of the eCommerce sphere, let’s first answer one basic question: what exactly is e-commerce?
Simply put, e-commerce refers to moneymaking transactions accomplished online. This means that whenever you buy and sell something using the Internet, you are involved in eCommerce.
The day was August 11, and the year was 1994. Around noon that day, Phil Brandenberger of Philadelphia logged into his computer and used his credit card to purchase Sting’s “Ten Summoners’ Tales” for $12.48 plus shipping.
That tale may not sound too thrilling today, but at that time, this exacting deal made history. Why? Because it was the first time that encryption technology a person used to perform an internet purchase. Many believe that moment is the first “true” eCommerce transaction.
Of course, eCommerce has grown rapidly since then. Big Commerce refers to that eCommerce is rising 23% year-over-year, and as said by eMarkerter, worldwide eCommerce sales are expected to summit $27 trillion in 2020 — and that is just statistics for the retail zone.
Quite amazing, isn’t it?
In this article, we tried to bring notable eCommerce success stories to light. And, we are able to deliver you a better idea of what it takes to do well in this dynamic industry.
You may be someone who wants to set up an eCommerce site or you’re already running an online store. And, you may just want to learn more about the industry, you’ll find plenty of nuggets in their guide.
Let’s take a look at what I’ll be discussing:
1. What is eCommerce?
2. Types of eCommerce merchants
3. Order of eCommerce merchants according to what they’re selling
4. E-commerce platforms: a look at where and how eCommerce takes place
5. E-commerce examples: success stories and flops
TYPES OF E-COMMERCE MERCHANTS
There are many ways to organize eCommerce websites. You can classify them in accordance with the products or services that they sell, the parties that they carry out business with, or even the platforms on which they operate.
In this guide, we’ll look at all three aspects to give you a clear picture of what types of eCommerce sites are out there.
Classifying eCommerce merchants according to what they’re selling Let’s start with the products and services in general sold online.
Below is a list of eCommerce merchants according to what they sell.
1. PHYSICAL GOODS SALE
These online retailers you most frequently come across. They can comprise clothing stores, homeware businesses, and gift shops, just to mention a few.
Physical goods sold via online stores are displayed online. This enables shoppers to include the items they would want to put in their virtual shopping carts. Once the transaction completes, the store typically ships the products ordered to the shopper, though an increasing number of retailers are introducing initiatives such as in-store pickup.
Some examples of these eCommerce stores consist of eyewear retailers, notably Warby Parker, menswear store Bonobos, and shoe retailer Zappos.
2. SERVICE-BASED E-TAILERS
There are people who are willing to buy or sell services. People willing to serve online could be online consultants, educators, and freelancers. These people are usually the ones engaging in eCommerce.
It is the merchant who influences buying process for services. Some may allow you to buy their services immediately from their website or platform. An example of this comes from www.Fiverr.com, a freelance marketplace. People willing to buy services from Fiverr must order a service on the website before the seller delivers their service.
Some service providers, in contrast, need you to communicate with them first (i.e. book a consultation) to conclude your needs. Web design company Blue Fountain Media is one example of a business that concludes its business through this.
3. DIGITAL PRODUCTS
Ecommerce is intrinsically highly digital, so it is without a doubt that many merchants sell “e-goods” online. EBooks, online courses, software, graphics, and virtual goods are the most common types of digital products.
Examples of merchants that deal with digital products are Shutterstock (a site that sells stock photos), Udemy (a site for online courses), and Slack (a company that provides instantaneous messaging, archiving, and search for teams).
Categorizing e-commerce has proven to be another effective way to classify e-commerce sites. Look at the parties taking part in the transaction. These typically comprise:
1. Business to Consumer (B2C)
2. Business to Business (B2B)
2. Consumer to Business (C2B)
1. Business To Consumer (B2C) – Transactions take place between businesses and consumers. In B2C eCommerce, businesses are the ones selling products or services to end-users (i.e. consumers).
Online retail typically makes use of a B2C model. Retailers with online stores such as Wal-Mart, Macy’s, and IKEA are all examples of businesses that do business through B2C eCommerce.
2. Business to Business (B2B) – As its name implies, B2B eCommerce concerns transactions operated between two businesses. Any companies whose customers are other businesses rely on a B2B model.
Examples include Xero, an online software application that provides accounting solutions for small businesses. ADP, a payroll processing company, and Square, provide payment solutions for SMBs.
3. Consumer to Business (C2B) – Consumer-to-business eCommerce takes place when a consumer sells or contributes monetary value to a business. Many crowdsourcing campaigns are categorized under C2B eCommerce.
Ecommerce growth (and money!) is notably amazing, which is why if you’re keen on doing business online, you need to know the fine points of the eCommerce industry.
In addition, that is exactly why this guide is written for. In this guide, we take a deep look at the eCommerce industry — how it transpired, what types of merchants you deal with, and what platforms are available for online selling.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.