What is ecommerce

What is ecommerce? All you need to know

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What is ecommerce? All you need to know

What is ecommerce?

The buying, selling or trading of products and services over the internet is called ecommerce (the ‘e’ stands for ‘electronic’). Generally, the term also encompasses the transfer of money – funds – to complete such buying, selling, or trading transactions. In an ecommerce context, both sellers as well as buyers can be individuals, small to medium-sized businesses, or even large businesses and governments or governmental organisations.
Some sellers might opt to sell only online exclusively, whereas others could have both physical stores – also called ‘brick-and-mortar’ stores – in combination with an online presence, either on their own website or through Amazon or other such websites.
The field of ecommerce looks set for continued growth. By 2025, online sales are expected to make up nearly a quarter of total global retail sales. More than 2 billion people bought products online in 2021, resulting in nearly $5 trillion in retail ecommerce sales. This number is expected to grow to $6.54 trillion in 2022, hitting $7.4 trillion by 2025.
Types of ecommerce models

Types of ecommerce models

Although there are several ecommerce business models, here are a few common ones that prevail:
  • B2C –This refers to businesses selling directly to end consumers.
  • B2B – In this model, businesses sell directly to other businesses and not end consumers.
  • C2B – Consumers sell to businesses. C2B businesses allow customers to sell to other companies.
  • C2C – Consumers sell to other consumers. Businesses create online marketplaces that connect consumers.
  • B2G – Businesses sell to governments or government agencies.
  • C2G – Consumers sell to governments or government agencies.
  • G2B – Governments or government agencies sell to businesses.
  • G2C - Governments or government agencies sell to consumers.
Ecommerce advantages

Ecommerce advantages

There are several potential benefits to having an ecommerce business (or to start an ecommerce business for your existing business). Here are a few:
  • Lower overheads and operating costs
  • Ecommerce businesses can operate without the need for physical stores, warehouses, or a large number of employees. Setting up and maintaining a website can be less expensive than starting a physical store. Several online tools might make it easy for you to set up a website – or you could launch your business on websites like Amazon, potentially removing the need to have a website of your own.
  • Engage with customers directly
  • Ecommerce brands could build relationships with their target audience directly while catering to their wants and needs, including through special offers and personalised product recommendations.
  • Worldwide business coverage
  • The global reach of electronic commerce provides benefits to both customers as well as businesses. Customers do not have to physically travel the world to buy products from different countries. They can also access a wider range of products thanks to the internet. Similarly, businesses too might reach customers all over the world, diversifying their reach.

Ecommerce challenges

While there can be numerous advantages to running an electronic commerce business, it can have potential challenges that you need to be aware of.
  • Technical challenges
  • Despite your best efforts, you may sometimes face technical difficulties like internet and server issues, or supply chain problems that might impact your ability to deliver products in time. Although there may be workarounds available, these challenges can cost you time and money. You could consider building your own store on Amazon, alternatively, to gain the benefits of working with an established, trusted technical infrastructure.
  • Information security
  • With an increasing number of interactions being conducted online, customers are concerned about how their information is stored and shared. A detailed and clear privacy policy can help build trust and reassure your customers that you will safeguard their personally identifiable information. You might also need to ensure that you use a highly secure payment processing service like Amazon Pay to help avoid putting customer data at risk.
  • Scalable delivery of products
  • Because of ecommerce, customers now have abundant options to browse, compare and buy products and services with ease from anywhere in the world. It may be difficult for small and medium-sized businesses to ensure proper delivery of products to multiple countries or continents and guarantee safe payment options. Services like Fulfilment by Amazon can handle the process of picking, packing and shipping your products to customers in multiple countries with ease.

What makes a successful ecommerce business

In the highly competitive world of ecommerce, where knowing how to start an ecommerce business is crucial, it takes some effort to stand out and be successful. In order to maximise your chances of growing your business, you could focus on a few aspects, such as what kind of user experience your store offers, how to target customers effectively, and how to choose products to offer for sale.
  • Build an attractive store
  • Customers love online stores that are designed well and offer a carefully calibrated user journey. When you start an ecommerce business, you need to make it easy for your customers to navigate your store and choose the products they want with a minimum of difficulty.
  • Choose the right products
  • The products you list on your online store should have certain features to make them attractive to customers. They must be of high quality, reliable and capable of catering to your customers’ needs. Do some market research before selecting the specific product or range of products that you will offer for sale online.
  • Target the right audience
  • Ensuring that your online store attracts the right kind of customers – those who could benefit from your products – could help drive your success.
    Identify the kinds of customers who are most likely to buy from you and target your marketing efforts to that audience. Then, as your business grows, think of who else can be your potential customers and work on adding them to your existing marketing strategy.
  • Ensure proper, safe delivery
  • Ordering online and not getting your products delivered on time or in good condition is one of customers’ pet peeves. So, right from the start, ensure you have chosen reliable and effective delivery methods to keep your customers happy. Services like Fulfilment By Amazon offer advantages you may want to explore.
  • Tell a compelling brand story
  • There are many tools available for you to create an effective online presence. Use them to ensure your electronic commerce business tells a strong brand story that attracts your target audience to choose you and shop with you.
What makes a successful ecommerce business

What to consider before starting an ecommerce business

As more and more shoppers look to find products and services online, ecommerce can offer you a distinct advantage to scale up your business online, potentially allowing you to target a wider global consumer base with ease.

Points you need to consider before starting out are:
  • Own store vs existing website
  • While you can set up your own website and convert it into an ecommerce store, there are potential benefits to launching your brand and start an ecommerce business on an existing site such as Amazon. where you can access attractive features and gain from the site’s existing user base instead of starting from scratch on your own.
  • Scaling up internally vs outsourcing services to external vendors
  • Eventually, you might need to take a call on how you want to scale your business. You could either opt to hire more members internally to handle the increased load or outsource specific services to external vendors who can potentially reduce your overheads and enable better order management. However, if you choose to outsource, you should do your research to ensure that you are signing up with reliable vendors or services.
  • Handling your own inventory or utilising a fulfilment service
  • When the number of orders on your store increases as your business becomes popular, ensuring timely delivery becomes crucial. You can explore options of using an external fulfilment service that can handle your requirements, making your journey a little easier.
Now that you are aware of the basic facets of ecommerce as well as the potential benefits and challenges of running an ecommerce business; you will find yourself in a better-informed position to make a decision.


What is ecommerce?
Ecommerce refers to the process of buying, selling or trading products or services over the internet. The term also covers the usage and transfer of funds to complete these transactions. The sellers and buyers can be individuals, businesses or even governments and government agencies.
What are the types of ecommerce?
These are the most common types of ecommerce:

1. B2C –This refers to businesses selling directly to end consumers.
2. B2B – In this model, businesses sell directly to other businesses and not end consumers.
3. C2B – Consumers sell to businesses. C2B businesses allow customers to sell to other companies.
4. C2C – Consumers sell to other consumers. Businesses create online marketplaces that connect consumers.
5. B2G – Businesses sell to governments or government agencies.
6. C2G – Consumers sell to governments or government agencies.
7. G2B – Governments or government agencies sell to businesses.
8. G2C - Governments or government agencies sell to consumers.
What is an ecommerce business?
An ecommerce business is a subset of the broader ecommerce concept which involves selling products or services to customers over the internet.

Ecommerce businesses can range from small, home-based operations to large, multi-million dollar enterprises.
How to start an ecommerce business?
To start an ecommerce business, it is important to consider the following steps:

1. Decide whether to set up your own online store or leverage established sites like Amazon.
2. Choose the right products and ensure they are presented attractively to potential customers.
3. Identify your target audience, and create a business strategy to reach and engage with them effectively.
4. Determine whether you will handle order management and logistics internally or outsource these services, for instance, through Fulfillment by Amazon or other third-party providers.
5. List your products on your chosen site and begin selling to customers online.
Do I need my own website to set up an ecommerce business?
It depends. Some sellers choose to set up their own sites or online stores, while others choose to launch their online business or brand on Amazon or similar websites.
How can I effectively market my ecommerce store?
There are many advertising and marketing strategies you can use to help customers discover your store more easily and buy products from you. Amazon, for example, gives you multiple advertising solutions to increase your visibility to help grow your business on Amazon.
Is ecommerce still a growing market?
Yes. Statistics show that ecommerce sales are projected[CA15] to grow by 50% from their value in 2021 to reach a total potential value of more than $7 trillion by 2025.
How many people use Amazon Prime?
How many small to medium-sized businesses (SMEs) work with Amazon in the UK?
As of 2021, more than 65,000 UK SMEs have chosen to work with Amazon. In total, UK SMEs sold more than 750 million products on Amazon.

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