eCommerce Explained: Six Ways to Better Understand E-commerce
Unless you’ve been living under a rock for the last few years, you have probably heard about ecommerce. And you probably heard about it from several different angles. Still, you may feel like you don’t understand e-commerce at all. What is all the hype about? Why the huge valuations? And most importantly, is there a way for you to participate? If you have an e-commerce idea, how might you get started implementing it? If you have had questions like these, then this article will help out by explaining e-commerce and providing six (6) ways to help you better understand it.
E- commerce for what it really is – Electronic commerce or e-commerce is a term for any business, or commercial transaction that involves the transfer of information across the Internet. Simply put, e-commerce allows consumers to electronically exchange goods and services with no barriers of time or distance. It is also called a ‘Virtual Market Place. Every minute millions of people from all over the world are logging into the Internet looking for some information, for product, services, to look for news, download music, for online shopping and so on. Every individual is looking for something that he would like to obtain or buy online instead of having to go through a physical transaction. Imagine what this means to the business organizations. If they can identify and access those individual users who have a specific need or want, they have a ready customer in waiting.
Why should I care about e- commerce – The most amazing aspect of e-commerce is its ability to impact sales and marketing efforts immediately. First and foremost internet being a world wide web, opens up the world as a market to the businesses. Businesses can reach out to millions of customers in an instant that is not possible in any conventional mode of marketing. By going online, suddenly a neighborhood bakery or a home-based consulting service expands its reach to a national, or even international base of potential customers. Web-based sales know no international boundaries. Not only is the internet increasing the number of potential customers that a company can reach, but it is also driving profitability. With an e-commerce store, your business is open 24 hours a day, seven days a week and 365 days a year. You do not pay rent or the salaries of sales associates. You do not have any geographical limitations that restrict your customer base, which means you can sell to any country in the world, any time zone and in any language.
Co-existing with others in the marketplace, stand alone or both – It is an important question to ask regardless of which option is chosen, but more importantly understanding your risks will help to shape that decision. You should examine the differences and benefits between building your e- commerce platform and being a part of a shared platform with others. Security, for example, is critical regardless of which option is chosen. There’s likely a greater risk of being a standalone versus sharing that risk with others. These are important decisions for small businesses particularly if costs is a major factor. Businesses must choose based on their individual needs and objectives. For example, the virtual mall is a marketplace where brands
Your business model and e-commerce – It is important to understand your existing business model and determine how it can be fitted or adjusted to facilitate e-commerce. Tangible or intangible products and services can all work in the online marketplace. Shopping carts are better suited for tangible products and payment pages for intangible products. This could see an existing business making some huge changes to accommodate e-commerce. For a startup, it may be a much easier fit.
Is it the right time to move on e-commerce – There can never be a more opportune time. However, every business is unique and must examine the value e-commerce will be adding to their business model before embarking on such a move. The idea of selling to more people in more places and accessing customers in different marketplaces is excellent for any business. However, this will require some dedication and commitment to make it work.
The real costs of e-commerce – E-commerce has various kind of costs and will be dependent on the route one takes. A typical standalone e-commerce website, for example, has to be developed. This is, usually, done to scale based on your needs and will include regular development fees, hosting fees, security fees, commission or transaction fees depending on your processor. These are a combination of one-time, annual and daily costs that must be covered with your business. It is very easy to get to this point, but to recoup this investment is also crucial and will, of course, be linked back to your efforts to drive business to your website. Another example is where you coexist with others on a single platform. These fees are, usually, shared between you and other vendors and hence will be more manageable.
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