EVERYTHING YOU NEED TO KNOW ABOUT E-COMMERCE

Platforms such as Amazon, Alibaba, Etsy, and eBay have allowed E-commerce to revolutionize everything about the typical buying and selling process. Most firms have taken the initiative of integrating online business practices into their business processes. By doing this, they have taken their businesses to the next level and reap numerous benefits. Clients have benefited from the ease of finding reliable online stores that aid their online shopping experiences and ultimately lead to their satisfaction. 

Business analysts and economists alike wonder if physical stores will one day become obsolete with the constant rise of companies and clients that are turning to E-commerce. 

If you’re a business owner wanting to grow your business, an investor looking to identify opportunities with companies thriving with E-commerce, a marketing strategist seeking to drive traffic to your client's online store, or a shopping enthusiast, keep reading to find out what all the buzz is about E-commerce.

What is E-Commerce?

Investopedia defines E-commerce as “the buying and selling of goods and services over the internet. It also involves the transfer of money and data to execute these transactions." From this definition, one can deduce that the Internet is central to the success of E-commerce and it is what differentiates it from ordinary shopping. While regular shopping requires a buyer to go to a physical store, pick up items, and make payment in person, E-commerce allows both the buyer and the store to easily converge through the use of devices such as mobile phones or laptops that are connected to the internet and carry out all the same buying and selling procedures like picking items and paying for them through the mere clicks of buttons.  

Types of E-Commerce 

There are six types of E-commerce:

1. Business-to-business (B2B):  As the name suggests, Business to business-to-business e-commerce is the exchange of goods and services between companies. Alibaba is a prime example of B2B e-commerce as it connects businesses worldwide. With Alibaba, companies whether big or small are able to access diverse products like electronics, clothing, interior decoration items among many others, easily in order to keep their businesses running smoothly. A shoe store, for example, can obtain shoes of different kinds from Alibaba in bulk and then offer them for sale at a certain price in their retail store. 

2. Business-to-consumer (B2C): This refers to the direct transaction between a business and individual consumers, where businesses sell products or services to people for personal use. Initially, B2C referred to customers or buyers relating with sellers physically though buying products at stores, eating at a restaurant, but through the Internet, sellers can relate with buyers online and buying and selling transactions can happen without a buyer seeing a seller face to face. For example, B2C e-commerce takes place when consumers shop on websites like Amazon, or when buyers subscribe to streaming services like Netflix.

3. Consumer-to-consumer (C2C): In this situation, consumers can sell products or services to other consumers using a third-party platform like Craigslist or Ebay. With EBay for example, one doesn’t have to own a business in order to sell products and make a profit. A consumer creates a listing of for items he/she has that are either new or used and posts it on the site. Another consumer who sees these listed products and is interested in purchasing them can easily do so. Consumers use EBay to sell a variety of items ranging from home appliances to toys and even books.
    

4. Consumer-to-business (C2B): The C2B E-commerce type is unique because in this scenario, both the consumer and the business have something to gain from each other. Not only does the business create value for the customer but the customer under this type also creates value for the business. A consumer might have a product that could catch the interest of a company. For instance, if the customer runs a popular blog or social media account with a significant following, they could create value for the business by making reviews or videos that market the product of that business and offer them exposure and more customers over time. 

5. Business-to-Administration (B2A): E-commerce isn’t limited to just businesses amd consumers. B2A is am E-commerce type that involves the participation of public administrations. This E-commerce type is also known as Business-to-Government (B2G). It refers to when companies work directly with government agencies. This can include businesses providing goods or services to the government, or sharing important information through government-run websites or platforms. For example, a software company can provide a customized website for the government that makes it easy for the government to acquire public data, manage them and store them securely. In this case, the software company is creating value for the government by improving the operations of the government. 

6. Consumer-to-Administration (C2A): This type of E-commerce involves transactions between consumers and government agencies. Consumers interact with the government or public administrations digitally in order to have access to certain information or services. With C2A E-commerce, citizens of a country can make payments for public services like healthcare, social security, or taxes, to the government easily. It allows citizens to fulfill their obligations or access essential services through online platforms.

 Benefits of E-Commerce  

Now that you know what E-commerce is and what the types of E-Commerce are, you’re most likely wondering what you stand to gain from engaging in it. E-commerce has numerous benefits to offer. Continue reading to discover the benefits it offers you.

Benefits of E-Commerce for Business Owners 

1. E-commerce allows Stores to have a Wider Market: Physical stores can only accommodate a limited amount of customers per day. Through E-commerce, however, anyone from around the world can be a customer of any store without having to actually be there. Businesses benefit as they are able to reach an international audience without the four walls of the store being a constraint. Hence, companies are able to make sales at any point in the day from different time zones and geographical locations.  

2. E-commerce Cuts on Back Overhead Costs: E-commerce takes place over the internet hence there are certain aspects to running a physical store that you don’t need to worry about when running an online store. Companies are able to save on rent, they don’t need to bother about investing in utilities to run the store and they certainly don’t need to bother about bills like electricity and water. All that money can be invested in bettering the online shopping experience instead.

3. Companies can Offer a Variety of Products: Many online stores offer a wider range of products that may not be typically found in a traditional store. Online stores can source products from anywhere around the world and sell them. They don’t need to bother about having limited shelf space but can instead incorporate drop shipping or third-party suppliers into their systems where goods needed by customers can easily be delivered to the customer without having to be stocked in a physical store. 

4. E-commerce Makes Use of Cost-Effective Marketing Strategies to Gain Customers: Digital marketing is becoming increasingly popular and it serves as a way for online stores to gain recognition around the world through cost-effective marketing strategies using social media advertising and email campaigns. These allow online stores to reach wider audiences at a reasonable cost.

5. E-Commerce Allows for the Opportunity to Collect Customer Data: When purchasing goods online, E-commerce platforms are able to access needed information about customers like their preferences and shopping patterns. Shop owners can use this to their advantage by adapting their marketing strategies to suggest products to customers in a way that they won’t be able to resist. 

Benefits of E-Commerce to Customers 

1. Shopping is More Convenient: E-commerce enables customers with busy lives to be able to shop at any time and from anywhere in the world without the need to visit a brick-and-mortar store. Customers don’t have to confine their shopping time within the times physical stores open and close but they can shop at any time that’s convenient for them. Home delivery services are also another aspect of shopping online that customers get to enjoy. 

2. Customers Enjoy Greater Product Variety: Online stores can offer a wider range of products since they are not limited by physical space. This variety allows consumers to find specific products they need that suit their taste from anywhere in the world.

3. Customers Benefit from a Faster Buying Process: Shopping online is undoubtedly faster than shopping in a brick-and-mortar store. Shopping in a traditional store entails the customer having to search through aisles to get a specific item, having to wait in queues to pay and sometimes the physical store may not have what the customer needs! Shopping online, however, is much faster as all that is required of the customer is to click on the item that’s needed and pay. 

4. Customers are able to Compare Prices: Without having to drive from store to store taking note of where they can get the best products at the lowest prices, E-commerce gives customers the advantage of comparing prices of products across different stores just by looking at their phone screens. This way, customers can rest assured they were able to explore the cost of goods from different stores.   

5. Customers have Access to Reviews: Physical stores don’t have customer reviews and ratings readily available on each product on their shelves. With E-commerce, customers are able to browse products in online stores and have honest reviews waiting at their fingertips. This increases a customer’s trust in a product while also boosting customer satisfaction.  

Downsides to E-Commerce 

As seen above, E-commerce has multiple benefits but it also has its set of challenges.

1. Restricted Customer Service: Many shoppers require the aid of a staff to assist them while making buying decisions but with E-commerce, shoppers tend to feel like they are making important decisions alone without anyone to turn to for help or guidance. They can wind up feeling frustrated and annoyed when they have no one to ask questions to if they encounter issues with products, delivery, or payment problems. This may decrease customer support for a specific store and further damage a business’s reputation. 

2. Lack of Immediate Fulfilment: The waiting period between buying the item from an online store and receiving it can pose a disadvantage to buyers as with physical stores, customers are able to receive the products they paid for instantly. Customers of online stores, on the other hand, may have to wait days or even weeks to obtain their products.

3. Inability to feel or test products: Items purchased from online stores can sometimes end up being a disappointment as customers are expecting to receive one thing from the images shown on the store’s website but may get another thing delivered to them.

4. Dependence on technology: Glitches, malfunctions, or technical issues in the store system’s operations can be a challenge to both store owners and customers. E-commerce seizes to operate effectively if there’s a problem with the technology needed to keep the store running. Everyone involved has no option but to wait until the issue is resolved. 

E-commerce offers benefits to both business owners and customers. Despite challenges to its smooth operation like lack of proper customer service, the sometimes long waiting process to get what was ordered or the prospect of not getting what was expected, benefits such as the reduction of overhead costs, wider market reach, and variety of products offered far outweigh its disadvantages as most times, E-commerce processes lead to happy and satisfied customers as well as thriving businesses.

Consumer behavior continues to turn towards online platforms. Hence it is smart and necessary for businesses that aim to grow and expand in the coming years to adapt their operations to make room for E-commerce. 

What are you waiting for? Join the thousands of business owners and satisfied customers who are already transforming their online shopping experiences with e-commerce. Your success is merely one click away!