What Is E-Commerce Simple Definition?

December 8, 2021

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You’ve likely heard of e-commerce before, but you may not know all the ins and outs. These days, it’s important to know and understand e-commerce so that you can use this model to your advantage.

So here’s everything you need to know about e-commerce and how you can launch your own e-commerce business:

What Is E-commerce?

Electric commerce or e-commerce for short is a business model wherein companies sell goods and services to customers over the Internet rather than in-person. The e-commerce model is an alternative to the traditional brick-and-mortar retail model wherein companies use physical storefronts to sell goods and services to customers in person. Types of e-commerce models include B2C, B2B, C2C, and C2B companies.

Some companies exclusively utilize ecommerce platforms and online marketplaces without any physical storefronts. Many companies choose to combine the two models so that they have an online store in addition to brick-and-mortar stores. These days, very few retail stores do not also have an e-commerce website.

What Are the Advantages of the E-commerce Model?

Like any business model, the ecommerce business model comes with both advantages and disadvantages. Let’s start with some of the pros of this model:

Low startup costs: One of the biggest advantages of the e-commerce model is that it comes with low startup costs — making it possible for anyone to start their own e-commerce business. With e-commerce, you don’t need to invest capital into a storefront, equipment, and employees to sell products. Instead, you just need to invest in inventory, set up your ecommerce website, and you’re ready to go.
Wider reach: Another advantage of internet commerce is that it provides you with a wider reach since it effectively breaks down geographical barriers. Since customers don’t actually have to live near your store to visit it, people all over the world can find and then purchase from your ecommerce store.
Easier and more convenient access: The e-commerce model also provides consumers with easier and more convenient access to shopping. Instead of being limited by set store hours, people can shop online 24/7/365. And instead of having to drive to the store physically, people can just hop on their computer, phone, or other mobile devices without having to leave the house.
Increased access to data: The e-commerce model also provides you with more information about your customers. You can then use this information to your advantage — tailoring your offerings and marketing to what people actually want.
More impulse buying: Finally, the e-commerce model is primed for impulse buying. Thanks to online retailers, people don’t even have to leave the couch to make a purchase. They can just decide that they want something and go online to an ecommerce site to make it happen. You can help push your retail sales funnel along with scarcity tactics like countdown timers and limited quantities.

What Are the Disadvantages of the E-commerce Model?

Now that we’ve talked about the pros of the e-commerce model, let’s cover some of the cons so that you can get the full picture:

High competition: Since literally anyone can start an online business using the e-commerce model, you’re going to experience a lot of competition depending on your industry. As a result, it’s important to differentiate yourself from your competitors through your products and principles.
Less interactive: The e-commerce model can be less interactive than the traditional retail model since everything is done online rather than in person. This also means that customers aren’t able to physically see, feel, and try products before buying them.
Slow shipping times: It’s no secret that consumers are impatient and want their products as soon as possible. With the traditional retail model, they can go out and buy what they want right away. With the e-commerce model, they have to wait for their products and can be frustrated by slow shipping times.

How to Start an E-commerce Business?

While anyone can technically start an e-commerce business, it’s certainly not an easy feat — you need expertise and experience to make it happen. Thankfully, Greg Gillman has extensive e-commerce expertise and experience that he’s used when helping his brand generate $4 billion in annual revenue — and he can help you too.

Here’s what you should do to start an e-commerce business:

Figure out what you want to sell. Before you can actually start your e-commerce business, you need to figure out what type of business you want to operate. You can pretty much sell anything online these days, so you’re going to need to narrow down your options to products that are easy to make, sell, and ship.
It also helps if you are knowledgeable about the products and familiar with the wider industry. Before you make your final decision, make sure to check out the competition to ensure that the space isn’t oversaturated with existing companies and similar products.
Choose your e-commerce platform. Once you have a better idea of what you’re selling online, you need a place to sell it. There are countless e-commerce platforms out there to choose from, so make sure that you choose the right one for your products and business size, and capabilities.
Source and develop your products. As an e-commerce business, you’re going to need exciting and quality products to sell online. You may be able to make your products yourself or you may have to source them from a distributor or even work with a manufacturer. Just make sure that you’re offering products that customers actually want to buy.
Market your e-commerce business. Now that your e-commerce business is more established, you need to grow your brand through marketing. Create social media pages for your business on sites like Facebook and Instagram and get posting. Start growing your email and SMS marketing lists. Develop branded content and post it to your online blog. These are some of the different marketing channels that contribute to an effective omnichannel approach.

What Are the Best E-commerce Platforms?

As you can see, choosing the right e-commerce platform is an important component of starting your own e-commerce business. So what are the best e-commerce platforms out there, and how can you choose the right one for your business needs and goals? Here’s a quick breakdown of some of the different options:

Shopify: Shopify is an e-commerce platform designed to help businesses run their own online stores. This platform offers customized websites and a point of sale (POS) system. It also offers easy integrations and applications. For these reasons, Shopify is a great place to start if you’re looking to launch your own e-commerce business.
Wix: Wix is an e-commerce platform that is similar to Shopify in that it helps small businesses build their own online stores with easy-to-use and customizable templates. This platform is ideal for new and small businesses just starting out.
Amazon: Amazon is an e-commerce marketplace where companies can list their products so that customers can buy them directly from the platform. In fact, Amazon is the largest e-commerce marketplace in the world — shipping over 1.6 million packages a day through its own fulfillment service.
eBay: eBay is another e-commerce marketplace, although it’s specifically known for auctions. However, it’s still possible for companies to list their products at specific prices. Unlike Amazon, eBay sellers are solely responsible for shipping orders as there’s no fulfillment service available.