What Is Ecommerce? Applications of Ecommerce to Transform Your Business

Ecommerce is best defined as the processes and methods of buying and selling goods and services online.

In this modern era, eCommerce is done electronically using computers, tablets, smartphones, and other intelligent devices. There are over 26 million eCommerce websites globally, underscoring the technology’s wide adoption.

If you’re considering entering the eCommerce industry, you need a clear understanding of eCommerce. This article explains what eCommerce is and the various types that exist. Readers will also learn about the best applications of eCommerce that can transform their business.

What Is Ecommerce?

Ecommerce is the process of buying and selling tangible products and services online. Unlike brick-and-mortar businesses that require a physical presence, eCommerce transactions place completely online.

The process typically begins with the vendor providing a platform where users can browse through different products to choose items for their shopping cart. The prospective customer checks out with their preferred payment method while the eCommerce store arranges for product delivery.

The abovementioned process involves other systems such as electronic funds transfer, online marketing, inventory and supply chain management, and automated data collection.

Yet, all of these are abstracted from the end user, who enjoys a seamless shopping experienceThe history of eCommerce dates back to when the internet became publicly available in 1991. Very few online stores existed at the time before eCommerce with Amazon became a popular option in the United States.

Other prestigious businesses have emerged since then, including eBay, AliExpress, Walmart, Alibaba, and Rakuten. Yet, most eCommerce stores are operated by small and medium-sized enterprises (SMEs) looking to make their mark on the online space by adopting the different types of eCommerce.

Types of Ecommerce

The type of eCommerce implemented by a business generally depends on the goods and services provided. This section reviews the different types of eCommerce which you may consider when setting up your online business:

Business to Consumer (B2C)

Business-to-consumer (B2C) ecommerce is the most common model and what many people think about when they hear “eCommerce.” It refers to businesses selling their products or services directly to consumers through an online marketplace.

The most popular B2C eCommerce platforms exist as retail-focused marketplaces or mobile applications. Consumers can easily compare products and prices and purchase items without stepping out the door.

Also, unlike brick-and-mortar stores, B2C eCommerce allows businesses to reach a larger audience and sell their products or services 24/7. The profit margins are relatively greater as long as marketing efforts pay off.

Business to Business (B2B)

As the name suggests, business-to-business (B2B) ecommerce involves online businesses that sell directly to other businesses instead of direct consumers. A classic example is a construction company ordering building materials online from a marketplace.

B2B ecommerce provides significant advantages. Businesses can streamline their purchasing process, automate their supply chain, and reduce transaction costs significantly. There is also the option to set up recurring orders, a feature that comes in handy for businesses with recurring manufacturing processes.

Business to Government (B2G)

Business-to-government (B2G) ecommerce involves online businesses selling products or services to government agencies.

Such trades occur when the B2G ecommerce store meets government requests for proposal requirements, solicits bids for projects, or meets specific product or service criteria defined by the governmental body.

B2G business deals are generally more lucrative and may run consistently depending on the ability of your business to meet its obligations. A change in political offices may also significantly impact a B2G business.

Meanwhile, B2G ecommerce can further include the following models:

• A preferred online marketplace where businesses can connect with government agencies to sell their products or services.
• A government website where businesses can bid on contracts and purchase orders.
• An electronic data interchange (EDI) system allows businesses to electronically exchange purchase orders, invoices, and other documents with government agencies.

Consumer-to-Consumer (C2C)

This refers to customers buying and selling goods or services online through peer-to-peer marketplaces, social media groups, and classifieds websites.

Some examples of C2C ecommerce platforms include eBay, Craigslist, and Facebook Marketplace. These platforms allow individuals to list their goods or services while others can purchase them online.

C2C ecommerce also includes online peer-to-peer platforms such as Airbnb, Turo, and Taskrabbit, where people can buy or rent their properties and vehicles or offer their services to customers.

A central party, the eCommerce company, usually charges a service fee for maintaining order on the C2C marketplace. There are also systems for conflict resolution and fishing our bad actors who want to compromise the platform’s integrity.

Consumer to Business (C2B)

Customer-to-business (C2B) e-commerce involves consumers offering goods or services to businesses through an online platform such as a website, online marketplaces, and social media.

C2B ecommerce allows individuals to directly offer their products or services to businesses, bypassing traditional wholesalers and intermediaries. However, this may come at the cost of a service charge collected by the platform that connects consumers to businesses.

The most popular examples of C2B ecommerce are freelance platforms like Upwork, Fiverr, and Task Rabbit, where individuals can offer their services to businesses and individuals looking for specific skills.

C2B ecommerce also includes platforms like Kickstarter and Indiegogo, where customers can back a project or product by funding it.

Consumer to Government (C2G)

This eCommerce business model involves consumers selling goods and services to government agencies. This includes websites, online marketplaces, or electronic data interchange (EDI) systems.

C2G ecommerce allows citizens to access government services, submit applications, and perform other online transactions.

It’s important to note that C2G ecommerce platforms may have their own policies and regulations for accessing and using government services. Citizens must be aware of and follow these rules to ensure a successful transaction.

Other forms of C2G ecommerce include:

• Online portals where citizens can access government services and information, such as paying taxes, renewing licenses, and submitting applications for benefits.
• Online marketplaces where citizens can purchase goods or services from government agencies, such as purchasing a hunting or fishing license.
• An electronic data interchange (EDI) system allows citizens to exchange documents and information with government agencies, such as submitting a tax return.

How to start ecommerce

Starting an e-commerce business can be an excellent way to reach your customers and sell your products or any online service. Here’s a step-by-step guide to starting an ecommerce business:

1. Create a business plan: Creating a business plan can be as good as defining your targeted audience, products, or services and how you plan to market and sell them online.
2. Choose a niche: Identify an area of interest or specific product category in which you want to specialize.
3. Research the competition: Study the existing competition in your niche, and see what they are doing well and what they could improve upon.
4. Choose an ecommerce platform: Select a platform that best fits your business needs, budget, and technical capabilities. Popular options mentioned in this article include Shopify, Magento, BigCommerce, and many more.
5. Design and build your online store: Create an attractive, user-friendly website that showcases your products and makes it easy for customers to purchase them.
6. Search for products: If you plan to sell physical goods, you must search for products from manufacturers, wholesalers, or dropshippers.
7. Choose payment gateway and shipping: Connect with payment gateways and shipping providers to facilitate transactions and delivery of products.
8. Promote your store: Use various marketing techniques such as SEO, social media, email marketing, and PPC to drive traffic to your store and increase sales.
9. Monitor and Optimize: Keep an eye on your store’s performance, track your sales and customer data, and make necessary changes to improve the customer experience and increase conversions.

How Much Does it Cost To Start Ecommerce?

There is no fixed cost for starting an eCommerce business. The costs can go as little as $100 or as high as thousands of dollars, depending on the size of your business.

However, the cost of starting an eCommerce website is minimal for the small business owner. The basic costs include purchasing a website domain, hosting subscription, and theme to beautify the marketplace.

You may operate as a drop shipping business to lower entry costs instead of purchasing items you sell to customers. Dropshippers only pay for products after a customer purchases them.

Meanwhile, if you’re a large-scale business, you may incur higher costs often associated with purchasing licenses and permits. Yet, an eCommerce business tends to be less cost-intensive than other online business models.

Which eCommerce platform is best for small businesses?

Many eCommerce platforms are on the market today with various features that can supercharge your online business. This section reviews some of the most popular tools to help you decide:

WooCommerce

WooCommerce is an open-source eCommerce development platform built for WordPress websites. It is arguably the most popular ecommerce platform, with over 6.7 million online stores built on WooCommerce at the time of writing.

WooCommerce users can sell physical, digital, and affiliated products from certain marketplaces. The setup process is relatively easier, meaning merchants can set up their store within minutes of installing WooCommerce.

The WooCommerce plugin is available for free and is also packed full of features that are perfectly integrated into your self-hosted WordPress website. WooeCommerce seamlessly integrates hundreds of other products like Sage, MailChimp, and Stripe to offer additional functionalities to eCommerce merchants.

BigCommerce

BigCommerce is one of the leading ecommerce builders, providing extreme scalability for online stores. BigCommerce’s primary value proposition is that it delivers more built-in sales tools than competitors. Merchants also enjoy advanced SEO tools and seamless integration with other eCommerce solutions.

BigCommerce was designed to help boost large and fast-growing businesses into the big leagues. It is the only ecommerce builder on the market which lets you sell physical, digital, and service-based products without having to use an app (often at an extra cost).

All of these sales types are already built into the BigCommerce editor. This means less hassle and cost because you don’t have to worry about using third-party apps.

Magneto

Magento stands out as one of the most popular ecommerce platforms for established and successful retailers. Over 200,000 online stores (or 0.8% of all eCommerce platforms) are built with Magento.

Magento supports external sales channels like Amazon and is famous for delivering a level of customization currently unattainable with other eCommerce platforms. However, these customizations require advanced technical skills, leading to Magento’s market share dropping over the past few years.

Yet, the platform is a top choice for delivering a user-friendly sales experience. Prospective users can also tap into a global community of experienced Magento developers for guidance on deploying the solution.

Shopify

Shopify is a web application for creating your own online store. It provides several user-friendly ‘themes’ that you can customize to match your branding. As with other aforementioned platforms, Shopify allows you to sell physical or digital products.

Shopify is a ‘hosted’ solution, meaning it runs on its own servers, and you don’t have to buy web hosting or install any software to use it.

You build and manage your Shopify store in a web browser — so as long as you have access to the Internet, you can run a Shopify business from any location.

Weebly

Weebly is a beginner-friendly website builder that allows users to easily create a website without coding knowledge.

It’s a great option for those who want to create a professional website or online store quickly and without a steep learning curve, thanks to its drag-and-drop editor.

It’s also one of the most affordable site builders on the market, offering a free option and a premium version.

How To Apply Ecommerce To Transform Your Business

Ecommerce can transform a business in several ways, and here are a few examples:

1. Marketing: Ecommerce platforms provide marketing tools and analytics, which can help businesses identify their target audience, reach new customers, and track the success of their marketing efforts.
2. Automated Operations: Ecommerce platforms can automate many tasks such as inventory management, order processing, and shipping, saving businesses time and money.
3. Online Sales: Ecommerce allows businesses to sell products or services online, reaching a global customer base 24/7. It also allows businesses to sell products or services through different channels, such as websites, mobile apps, and social media platforms.
4. Increased Efficiency: Ecommerce can help businesses streamline their operations and increase efficiency by automating repetitive tasks, reducing the need for manual labor, and providing real-time data on sales and inventory.
5. Mobile optimization: Ecommerce platforms can be optimized for mobile devices, which can help businesses reach customers on the go and increase sales through mobile devices.
6. Flexibility: Ecommerce platforms allow businesses to make changes to their products, pricing, and promotions quickly and easily, which can help them respond to changing market conditions and customer demands.
7. Personalization: Ecommerce platforms can collect customer data, allowing businesses to personalize their products, offers, and communications. This can improve customer loyalty and increase sales.
8. Better Customer Service: Ecommerce platforms offer features such as live chat, customer reviews, and FAQs, which can help businesses improve their customer service and increase customer satisfaction.
9. Cost savings: Ecommerce eliminates the need for a physical store, saving businesses money on rent, utilities, and other expenses.
10. Wider Reach: Ecommerce can help businesses expand their reach beyond their local area, allowing them to sell products or services to customers worldwide.

Conclusion

Ecommerce has revolutionized the way businesses operate and connect with customers. With the help of ecommerce, businesses can expand their reach, improve customer experience, and operate more efficiently.

By applying ecommerce to your business, you can take advantage of the many benefits it offers, such as increased sales and revenue, reduced costs, and improved data and analytics. Starting an ecommerce business can be a complex and time-consuming process, but with a well-thought-out plan, and the right tools, it can be a successful and profitable venture.

It’s no surprise that ecommerce is becoming an integral part of the business world, and it is important to consider how it can be used to transform and grow your business, as mentioned in this article. If you are considering going into ecommerce, we have a team of professionals who can make this dream come true.