Are you planning to start a business to sell your products and services online? If yes, then you will be joining the several entrepreneurs who have already carved out a niche in eCommerce. But what exactly is eCommerce? To put it in simple words, eCommerce or Electronic Commerce refers to buying and selling goods or services using electronic channels like the internet. This means that each time you buy and sell anything via the internet, you are involved in eCommerce.
eCommerce has gained a lot of popularity than ever before. Many people now prefer to shop via eCommerce instead of going to the regular brick and mortar stores. Mobile devices have majorly contributed to the popularity as well as the rise of eCommerce in the recent times. It is estimated that mobile phones will account for around 70% of eCommerce traffic by the end of 2018.
Moreover, social media websites such as Facebook have also contributed to the growth of eCommerce. Facebook earlier reported that 87% of all its advertising revenue comes in from mobile devices. And as the social media websites are slowly merging along with eCommerce platforms such as Spotify, several people will start to integrate eCommerce in their shopping habit.
Types/Categories of eCommerce:
Just like the traditional commerce, there are four primary categories of eCommerce:
- B2B or business to business involves one company selling directly to another company.
- B2C or business to consumer involves the company selling directly to the consumers.
- C2B or consumer to business involves a consumer selling to a company through social media or auction.
- C2C or consumer to consumer involves one consumer selling goods/services to another online.
What are the benefits of eCommerce?
There’s a reason why eCommerce has shown such an intensive growth in the last few years. Since internet has become an essential requirement for most people these days, eCommerce is beneficial for businesses in several ways such as:
Has a global reach:
A regular brick and mortar store has a limited reach as it serves within a geographical region. But on the other hand, an online store or any other kind of eCommerce business has the entire world as its market. eCommerce facilitates a business to reach out to not just a local consumer base but also to a global market and that too without any additional cost, which is one of the greatest benefits of online trading.
Offers round-the-clock availability:
Another benefit of running a business online is that its round-the-clock availability. This is a great advantage for the merchants to increase sales opportunities and also for a customer as it is an immediate and conveniently available option. The eCommerce stores are open 24/7 throughout the year, without any kind of restriction in the working hours.
Helps to lower costs:
An eCommerce business benefits from tremendously low running cost. As there is no requirement to hire a sales force to run and maintain a physical store, most of the primary eCommerce costs go out to product storage and warehouse. Therefore, as the merchants can save out on their operational costs, they tend to offer great deals as well as discounts to the customers.
Helps in efficient inventory management:
An eCommerce business can manage its inventory with the help of electronic tools to accelerate customer orders, delivery as well as payment processes. This again helps businesses to save out on their inventory and operational costs.
Having access to such a vast number of customer base and a chance to keep an eye on the buying habits of the customer as well the new industry trends, an eCommerce business can tailor its marketing efforts to offer its customers a better experience and discover more potential customers.
Helps to serve the niche markets:
Running a regular physical store can be difficult. There are bleak chances of scaling it unless one of its niche products becomes a hit and a mainstream. On the other hand, eCommerce businesses reach out to a global market and thus get an opportunity to develop a profitable niche business without any kind of further investment. The advent of online search has facilitated customers living in any corner of the world to find and buy the products you offer.
An eCommerce business can work from anywhere:
Running an eCommerce business generally means that you do not have to follow the typical 9 to 5 office routine o have to travel long distances each day to reach the office. Just a laptop and an internet connection is all you require to manage your online business from any corner of the world.
Who can start an eCommerce business?
In just a word: Anyone. Any person can open an eCommerce store and start a business. The several barriers which generally restrict a person to run a traditional commerce store do not exist online such as:
- You do not have to spend days to search for a good location for a physical store.
- You do not have to secure a risky long-term lease.
- There will not be a need to hire an army of the workforce to help run the store
- You will not have to pile up your stock upfront in advance as generally most of the eCommerce stores purchase stock only when they have made a sale, which thus minimizes risk. This method of product sourcing is called as a dropshipping business model.
Simply, eCommerce makes things much easier. All you have to do is have a website which will not cost much, and of course, offer exclusive products or services with good discounts. Moreover, you will also need to offer secured payment procedures to your customers which are again cheaper to install.
Getting started with an eCommerce Business:
Even though setting up an actual online store will not need more than a day, conducting research, building, launching and then growing a profitable eCommerce business involves a process which consists of some decisions and steps like:
Choosing a product to sell:
The very first step you have to do to start an eCommerce business is to decide what products you want to sell really. Coming up with a profitable idea can involve a lot of hard work so you should be prepared to think and dig a unique idea. It is important that you choose the products which have a healthy margin which will let you earn a profit as well as scale the business in the future. Once you decide on the products you want to sell, next, you will have to decide how and where you are going to source them. Products can be sourced mainly through 4 methods: making, wholesale, manufacturing, and lastly drop shipping. So take a wise decision when it comes to sourcing.
Carry out research and plan in advance:
The products you choose will dictate the market you should be targeting and researching on, but certain important areas you will have to look into is the competition, the pricing strategy as well as your USP (unique value proposition). Hence, it is best to draft a plan which will help to identify your growth strategy as well as the obstacles or threats prevailing in the market.
Do the branding correctly:
After finalizing the products and having a clear idea about the market, you will next have to think about the major elements about your eCommerce store, like the domain name, brand name, logo and the brand guidelines. It is essential to have perfect banding right from the start to grow your business and conquer the hearts of your potential customers. Therefore, you should invest some time to learn the basics of SEO so that your online business has a good start.
Decide how you will sell:
It is up to you to choose how you wish to set up your online store. You can either start an eCommerce shop from scratch which means creating it yourself by taking the help of an agency to do the work for you, or you can take the help of an off-the-shelf eCommerce solution such as Shopify which will make it easy for you to build an online store.
By this step, you will be trying to get your eCommerce store to the World Wide Web. But it is important that you define your key performance indicators before the launch to track your business progress and make improvements when required. Also, ensure that you have set up social media profiles, readied your email marketing strategy, done keyword research, and finalized a launch advertisement or promotion strategy.
After the launch:
This is when your real work will actually start. After the launch of your online store, you must move to the promotion phase. Promoting and marketing your store as well as optimizing the conversion rates are the two things you will have to carry out on regular basis. Moreover, you will have to try and refresh your inventory to offer new products to customers. Also ensure that the quality of the product is maintained during the transit. Staying ahead of the competition will take some testing.
As with time eCommerce evolves, it is best to keep an eye on the latest eCommerce trends. Even if you are new to eCommerce or if you already have a brick and mortar store, you can still take advantage from understanding eCommerce as from both a consumer and business perspective; there are certainly exciting times ahead for commerce.