As of 2020, there are roughly 12 million to 24 million eCommerce sites around the world. More are being opened every day as people become aware of the unique benefits of eCommerce.
The burgeoning number of eCommerce stores, as you’d expect, has increased the competition in the online market space. However, there’s still massive room for growth for any aspiring eCommerce entrepreneur. Currently, less than 1 million of existing eCommerce stores sell over $1,000 annually.
So what is eCommerce? What market potential does it hold for your business? What benefits does eCommerce offer over traditional retail?
These are just some of the issues this comprehensive guide tackles. Read on to learn more.
What Is eCommerce?
eCommerce refers to the buying and selling of products and services through the internet. The term is a shortened form of electronic commerce. In eCommerce, money, and data is transferred to execute the transactions.
Because eCommerce is a concept that has been around for decades, most people are aware of it. Of course, the eCommerce business model has experienced multiple transformations through the years to become what it is today. Still, its definition has remained the same.
What’s the Difference Between Ecommerce and E-Business?
eCommerce and e-business are closely linked. The two business models, however, are entirely different from each other. While eCommerce deals with the transaction of goods and services specifically, e-business focuses on all aspects of operating an internet business.
An eCommerce business may have both an offline channel and an online channel. Some eCommerce businesses operate strictly via an online channel.
What Are the Different Types of Ecommerce?
To get a better understanding of eCommerce, we need to break it down to the various types of eCommerce available today. We discuss six of them below:
I. Business-to-Business eCommerce
Business-to-Business (B2B) eCommerce refers to electronic dealings and transactions that relate to goods and services between two businesses. A good example of B2B eCommerce is the retail industry that involves manufacturers, wholesalers, suppliers, distributors, retailers, and business owners.
II. Business-to-Consumer eCommerce
Business-to-Consumer (B2C) eCommerce involves transactions between a business and the end consumer at an individual level. B2C leads the eCommerce market size in terms of volume and revenue, with the market expected to reach a staggering $7.7 trillion by 2025.
III. Consumer-to-Business eCommerce
Consumer-to-Business (C2B) eCommerce is a reversal to the conventional selling and buying process. In this model, the purchasing decision is in the hands of the business, while an individual consumer is the one offering a product or service.
C2B eCommerce can apply for crowdsourcing projects where a consumer generates requirements for businesses to achieve. A consumer could post the request for a service or project on an eCommerce website. Multiple companies will then make bids to win the project.
IV. Consumer-to-Consumer eCommerce
Consumer-to-Consumer (C2C) eCommerce refers to the buying and selling of products and services between two end consumers.
V. Business-to-Administration eCommerce
Business-to-Administration (B2A) eCommerce is one of the less familiar eCommerce models. Administration, in this case, refers to government entities and public administration.
An example of B2A is where a procurement department sources for business via a third party company that performs the transactions on their behalf.
VI. Consumer-to-Administration eCommerce
Consumer-to-Administration (C2A) eCommerce is a business model where authorities and government bodies source for products and services from end consumers. An example is where an individual pays taxes through an online platform. C2A eCommerce is more niche and not particularly commercial.
Benefits of eCommerce
When compared to conventional practices of doing business, eCommerce provides a wide variety of benefits that could take your business to the next level. Below are four of them.
A. eCommerce Removes Geographical Limitations
One of the top eCommerce benefits is that it positively eliminates the location factor. Consumers can thus transact from any place. This caters to your potential customers that might want to shop on the go.
When you eliminate geographical limitations, you can open up a broader coverage for your business. Eventually, you can branch out to the international market without needing to set up operating bases overseas.
B. There Are No Longer Time Constraints
eCommerce has also eradicated time constraints. Consumers can purchase around the clock. Most brick-and-mortar stores have standard operating hours that limit a customer’s ability to purchase whenever they want to.
C. eCommerce Saves Costs
Setting up a physical business usually requires a significant amount of capital. You’ll need to think of such factors as rental fees, maintenance of the physical store, and so on.
An online store only requires you to set up a web-based platform to kick start your operations. You can even run the business from your home. Where you need to employ employees, your staff will most likely be much smaller than you’d need to operate a physical store.
Marketing an eCommerce business is also easier. Where you’ve taken your time finding and qualifying an eCommerce marketing agency, you can expect even better results from conventional digital marketing efforts.
D. eCommerce Boosts Convenience
Of all the advantages of eCommerce, it’s convenience that gives you the biggest edge over traditional retail. The modern consumer wants the ability to shop easier and faster. They want to be able to pay without any hassles.
eCommerce offers many features that provide consumers with the best user experience. They can locate products and services more easily with the search bar functionality. They can also customize and refine their search options, so they directly view products that are relevant to them.
Making purchasing decisions is a lot easier for the consumer because they can conveniently compare and contrast different products and services online. Most platforms have the live chat feature that allows consumers to receive any assistance they need. This way, they don’t have to visit the store or make a phone call physically.
With all these conveniences, it’s no wonder more consumers prefer to shop online, which is good news for the e-retailer.
The Future of E-Commerce Has Never Been Brighter
There’s no question that eCommerce continues to massively outgrow traditional retail every day. This trend isn’t without reason, given the ever-increasing benefits of eCommerce. If you’ve been thinking of becoming a part of this holy grail of retail, now’s the best time to do it.
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