What is Ecommerce and how to get started?
Hello there!
Today you will learn what eCommerce is, the pros and cons of eCommerce, and its components, so you can start selling online. Additionally, I will be mentioning some of the most popular platforms for each component of eCommerce.
What is eCommerce?
E-commerce stands for electronic commerce and encompasses selling and buying through electronic means; internet.
According to Shopify, “Ecommerce is often used to refer to the sale of physical products online, but it can also describe any kind of commercial transaction that is facilitated through the internet”.
What are the pros and cons of eCommerce?
Consumers (Individuals and organizations) want faster processes, wide and quick access to solutions, and the possibility of buying from anywhere, at any time. Similarly, sellers(Individuals and organizations) are always looking for more efficient ways to sell, charge, and deliver their products.
Ecommerce is one answer on both sides; buyers and sellers. The following are some of the major pros and cons of e-commerce.
Benefits of eCommerce.
Access to a larger market. Consumers can access vast amounts of goods and service options from one single place; the internet. Sellers can support their sales process on multi-channel in order to access larger markets.
Store personalization. With current technologies, customizing the virtual store to each customer is possible. Consumers appreciate personalization and sellers get more sales in return.
Lower costs. Having your store online helps in reducing costs. It’s cheaper to build a virtual shop than a physical store. All processes of selling and distribution can be automated, reducing costs like having many employees. There are many providers of e-commerce platforms, and therefore the competition increases efficiency and lowers the costs.
Increased sales and instant gratification. Traditional obstacles like having to visit physical stores, finding the right products on their shelves, and carrying the products home, are no longer excuses for consumers. With e-commerce and virtual shops, consumers can look for and find their favorite goods and services online. This process is done easier and faster, providing instant gratification for the consumer and increased sales for the seller.
Unlimited “Shelf space”. As a seller, all you have to make sure is that the products you offer can be delivered at the promised time and price. There’s no limited shelf space; the limit is your warehouse or fulfillment center (or someone else’s).
Disadvantages of eCommerce.
Lack of face-to-face interaction. Due to the automation of the selling, paying and shipment process, there are no face-to-face interactions between sellers and buyers. Normally, the higher the cost of the products the more people want one-on-one interaction. Closer interaction with people will help you better understand the needs and wants of your customer, but surveys and other tools will help you minimize this eCommerce disadvantage.
No feel and touch. Technologies are constantly improving, and there are many ways to allow consumers to better “feel” or experience the product before they buy (videos, AR, AI, etc.) Although there’s not yet an equivalent for real interaction (smell, touch, and taste) make sure to provide as much information (FAQ,s details, and technology) as possible, so your visitors are more prone to purchase your products or services.
A stable and fast internet connection required. If the internet connection is not fast enough, or stable enough, the consumer might experience issues and frustrations. On the other hand, the seller would experience a decrease in sales and more unhappy customers.
Security issues. Encryption and decryption of data through key algorithms and other techniques provide advanced security to internet transactions. Your job is to make sure you are using high standards of security and that your customer is aware of it, so that they can trust you. Security issues are always a possibility; make sure you are protected.
Complexity in logistics and regulations. Access to larger markets might be a benefit, but this comes with a price; more complexity in logistics and regulations. Selling in different countries, states, and territories come with different processes, regulations, and logistics that you have to understand and overcome.
The components of e-commerce.
If you want to set up electronic commerce for your goods and/or services, you have to think of 3 main components:
The virtual shop.
The payment gateway.
The shipping and fulfillment process.
The Virtual shop.
To build your online store you have multiple alternatives. For example, you could build a website with WordPress and use WooCommerce as the e-commerce platform to create your virtual shop.
You could also rely entirely on e-commerce platforms, like Shopify, BigCommerce, Magento, Squarespace, Wix, and Big Cartel. These are all popular platforms with their pros and cons.
When talking about e-commerce platforms, there is no “One size fits all” option. I highly suggest understanding the advantages and disadvantages of every platform, in order to select the one that best works for you.
To set up your store, you need to have a domain name, web hosting, and an SSL certificate. Many of the above-mentioned e-commerce platforms include or help you with these requirements.
Once you have set up the virtual shop(online store) you still need to take care of the following two steps.
The payment gateway.
A payment gateway is an e-commerce software that authorizes payments for online merchants. In the background, the payment gateway will then contact the customer’s card issuing bank and to see if they have sufficient funds to pay for the sale. If so, the card-issuing bank will return an authorization, and the funds will be debited from the customer’s card.
According to Razer Merchant Services, “Payment gateway is a third-party between merchants and customers that securely takes the money from customers and sends it to the merchant's bank account. A payment gateway is a virtual equivalent of a physical point-of-sale terminal (POS) located in most retail outlets”.
Among some of the most popular payment gateways are Amazon Payments, WePay, PayPal Payments Standard, Authorize.net, 2Checkout, and Stripe.
Shipping and fulfillment.
Once you have built the online store and linked a payment gateway, it’s time to board the next step; shipping and fulfillment.
According to BigCommerce, order fulfillment is “...the process of storing inventory, picking and packing products, and shipping online orders to customers. This process can be completed in-house by an e-commerce company or outsourced to a third-party logistics (3PL) provider”.
The providers for shipping (carriers) vary depending on your location. I encourage you to research both local and countrywide carriers to find out what options suit your business model the most.
Wrapping Up
In today’s digital era, having an online shop, besides your brick and mortar store, is crucial. Customers want everything fast and efficiently, and the way to do it is through e-commerce.
The way to implement your virtual shop can be summarized in the above-mentioned 3 steps, but the apps, platforms, and technical support you will need to set it up, changes based on your business needs and budget.
There are some cons of e-commerce, like everything in life, but with some tech tools, you will be able to minimize them.
In order to gain deeper knowledge about e-commerce, feel free to explore all links provided in this article. The more informed you are, the better decisions you make on behalf of your customers and business.
If you have any questions, suggestions, or comments, please, let me know down below. Every opinion on how to improve the content of this blog will allow me to make adjustments on the go, with the objective of providing quality information for you, my dear readers.
If you would like to read my previous post about “Digital Marketing Plan; Creation and Implementation”, click here.
Sincerely,
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