Even if you haven’t heard about it, which we highly doubt, you’ve already participated in e-commerce. Whether you sold your old couch on Craigslist or bought a new fresh pair of Nikes from that one cool website, you played your part in the big world of e-commerce. There are a lot of reasons why you should know more about e-commerce and we are here to tell you all about it. Grab your favorite drink of choice and let’s dive in, shall we?
What is E-Commerce?
Electronic commerce or internet commerce, also known as e-commerce, involves companies and individuals that sell or buy goods over the internet. Today nearly every imaginable service or product is available through e-commerce transactions. From airplane tickets and housing to groceries and books, the world wide web provides it all. The term e-business often pops up too but it shouldn’t be mistaken or used as a synonym for e-commerce. E-business describes all aspects of running an online business(legal, accounting, storage, transportation, packaging, etc.), whereas e-commerce specifically refers to the transaction of goods and services online.
Why is E-Commerce so popular?
People traded goods way before the age of the Internet, now it’s just way easier to do it. Anyone with a phone, a bank account, and an internet connection can go on Amazon and buy/sell whatever they want. It’s THAT easy. The very first documented online transaction occurred in 1994 and since then e-commerce evolved into a digital giant. According to research made by Insider Intelligence, global e-commerce site sales will reach over $1.67 trillion in 2022. To put that number in perspective, with that amount of money you can almost buy each citizen of Uruguay a $500,000 Lamborghini. With technology slowly advancing its way more and more in our lives, buying or selling stuff online will become easier. Apart from products, e-commerce has empowered individuals who work as independent freelancers to better position themselves online and to scale their business more conveniently. Traditional brick-and-mortar stores also adopted e-commerce as a way to keep up with the competition. The hybrid model of providing goods both online and in-store helps many small and big businesses to increase their profit and to offer more services to keep their existing clients and possibly attract new ones.
Benefits and Downsides of E-Commerce
As with everything that exists e-commerce comes with its advantages and disadvantages. We listed a few to try and give you a better perspective.
When most brick-and-mortar stores lay down for a rest at night, e-commerce doesn’t need to sleep and it’s there for you 24/7. You suddenly realized at 2 a.m that you need a new pair of shoes to match your outfit for the wedding tomorrow, grabbed your phone, and hopped on Amazon to order three pairs of Converse sneakers because they were on sale and all of them arrived the next day before noon? It’s hypothetical but you can do that if you wanted to.
Many e-commerce stores offer a much wider variety of products in their online shops. Unlike their physical counterparts, where you are constricted by space, you can fit pretty much everything you want in your e-commerce store. Also, many online stores offer goods that can’t be bought elsewhere. Exclusivity is a classic.
Location, location, location
Nowadays geolocation isn’t a big issue. Almost every e-commerce store offers international shipping, which then expands your market by a lot. Yes, there are costs to shipping items anywhere but if the product is good, people wouldn’t mind paying them. Also, they might not have access to that product in their country, so the only way to buy it is to order internationally. And with how popular remote work has become over the years, providing online services globally isn’t an issue at all too. Sky’s the limit as they say.
You don’t need a small loan of a million dollars to get your e-commerce store up and running. Yes, you do need to set up an online store and possibly also need to figure out a warehouse and maybe a manufacturing site, but you don’t need a physical storefront, which will require you to pay rent, insurance, maintenance, staff, etc.
Sucks to wait for that novel to arrive. It also sucks when the delivery gets messed up and you have to wait a week more. The downside of e-commerce is that you have to wait for your product to arrive. Maybe you can just go to the local store and buy that board game, for your niece’s birthday, which you know she’ll adore. But if you have to order it online, make sure it will arrive on time for her birthday, otherwise, you’ll be crowned worst-uncle-in-the-universe and that is not good.
For better or for worse you still can’t physically touch and try products when you’re buying them online. This might be a deal-breaker for some people. Have you ever bought a shirt that is your size but the material doesn’t feel nice? Or those shoes which are your size but aren’t fitting well? Yes, you do have an option to return your shipment free of cost but that just doesn’t alleviate the frustration.
Hi, how are you?
Traditional stores have personnel who are there to help you anytime you have troubles with your purchase and often make the shopping experience more pleasant. E-commerce doesn’t have the same option. Yes, you could have 24/7 customer support, and chatbots but they can’t replace the warm greetings and even the warmer smile of a store assistant, and the “Hi, welcome to _______ how are you today?”, can they?
Don’t pull the plug
If God forbid your website crashes for any reason (and there are a lot of reasons why it can crash), your business will be out of order until the e-commerce storefront is back. Bugs also occur often and clients have issues with their orders, deliveries, etc. You can offer discounts and hope to compensate your customers but it’s not good when that happens often. Technology, while awesome, can sometimes be unreliable and when things go south you can just wait and hope that your e-store will be up and running as soon as possible.
Types of E-Commerce
Depending on the goods, services, and organization of an e-commerce company, a business can choose to operate in several ways. Here are the more popular ones.
Business to Consumer (B2C)
When a business sells a product or a service to an individual (e.g. You buy a hat from an online store)
Business to Business (B2B)
When a business sells a product or a service to another business (e.g. A company sells software-as-a-service for another company to use)
Consumer to Consumer (C2C)
When an individual sells a product or a service to another individual (e.g. You buy a used book on Amazon from another person)
Consumer to Business (C2B)
When an individual sells a product or a service to a company (e.g. A graphic designer creates a logo for a small business)
E-commerce is just part of running an e-business. If you want to sell your products or services online, you need to do your research thoroughly. Chances are that whatever you sell, the competition will be brutal and you need to figure out how to discern from it. It’s easy to set up an e-commerce store but it’s extremely difficult to turn it into a successful business. We don’t want to be discouraging. There are plenty of tools, platforms, groups, and resources that can help you to start selling goods online. There’s plenty of fish in the sea of e-commerce and there’s enough space in the limitless ocean for your boat too. So go for it.