With the introduction of technology, businesses have been trying to keep up with their customers who seem to be attracted to online everything. Ecommerce is the way that businesses have found that helps them keep their business in front of where their customers’ eyes are.
What exactly is ecommerce? Defined, ecommerce is the buying and selling of products to consumers electronically. Seems pretty simple right? A lot goes into ecommerce from having to design a website, get a payment gateway, to marketing and promotion. Ecommerce demands a lot of a business in order to be successful.
There are 3 different types of ecommerce: business to business [B2B], business to consumer [B2C], and consumer to consumer [C2C]. Business to business selling is different than other types of selling. Companies like Cisco sell businesses the things they need to make their consumers happy. Business to consumer selling is most common.
Businesses such as Amazon sell products directly to consumers. They have different types of advertising and pricing than business to business. Consumer to consumer selling is more of the individual selling items to people like them. A good example is EBay which is made up mostly of individuals not a part of an established business who sell products.
There are certain requirements that need to be met when starting with ecommerce.
A business needs to set up a website, have the ability to checkout, accept payments online, and a method of delivery. The first step to getting started with ecommerce is to build a website. This is where consumers will come and view all the products that are for sale. It needs all the things a physical store would have such as checkout and shopping cart methods. It is also helpful to have the website reflect the same themes and colors as the physical store, if there is one, so consumers can feel confident they are in the right place.
It is best to have shopping cart software that tracks your customer and helps them keep all their purchases in one place during their visit. Just as if they were in the store, consumers need somewhere to keep all their purchases and this is where the online shopping cart comes into play. It can also be used to help upsell items at checkout.
A business will have to setup a payment method in order to get paid for the items that consumers purchase. The easy way to accept payments online is with PayPal. It can integrate with a website or simply be a button that redirects to PayPal. There are other businesses such as Google and Amazon who offer similar things to PayPal.
Another payment method is to set up a merchant account. This type of account lets a business accept payments directly using an Internet merchant account. After checkout, the payment is put directly into a business’s bank account. The business has to contact its bank which will set up and make sure the payments are transferred secure through a payment gateway. The payment gateway keeps all customer data confidential and safe.
The final thing that a business will need to for ecommerce is a delivery method. For electronic media, there is not real need for shipping. However, for physical items, there will be shipping fees. This should be taken into account and it is a good idea to set up business accounts with shipping services like FedEx or UPS to be able to get certain discounts for large shipments or frequent shipping.
There are many benefits to having an online store; one of those being that it removes the distance factor between customer and seller. Brick and mortar stores have a set location that they can sell to. It is difficult for them to sell to people outside their geographic location. Ecommerce gives businesses a means of providing their products to a wide range of consumers in many areas.
It also has much lower operation costs for a business. Owning a business can be costly: employee salaries, rent, utilities, etc. The expenses add up quickly. With an online store there are limited costs and some expenses are even eliminated completely such as rent or utilities. It is also not as expensive to get an online store up and running as it is for a physical store.
Comparison shopping is also made easier with ecommerce. Consumers like to compare products when they are shopping. They look at many different attributes of the products which help them decide which one fits them. In a business, it is sometimes hard to compare all the options as some may be in a different store or out of stock. Online, consumers can easily compare different products and find the one that fits their needs quickly.
Ecommerce stores also have no real hours of operation. Physical locations need to have specific hours that they run because of employee availability and the money it costs to stay open. Online stores can be open all day every day. There is no one that is needed to run the website because it runs itself.
So what is the current state of ecommerce? In an article by the Huffington post on ecommerce they mentioned that “online shoppers spend a record-breaking 1.25 billion” on 2011 on Cyber Monday and “by 2015 annual ecommerce sales are projected to hit $278.9 billion.” Obviously ecommerce is alive and well in our modern technologically dependent society. With more and more people using mobile smartphones and tablets daily, stores are keeping up by creating online stores.
In the beginning times of ecommerce starting a website was not that easy, but not almost anyone can set up a website and start selling products. Consumers have the demand and businesses are supplying this growing demand. The future of ecommerce looks strong and is even taking a toll on the physical stores. One well known example is Borders going out of business because they were not able to keep up with online providers such as Amazon. It is possible that eventually most business will be online with no physical stores, but this is an extreme prediction.
Ecommerce is a valuable method of selling for businesses. Although the process can sometimes require more technical means, overall it is something just about anyone can achieve. Hopefully, consumers will continue to have demand for online stores and products and keep the ecommerce industry alive and well.