What Is eCommerce?

1. Electronic Commerce (eCommerce)
2. History and Timeline
3. Statistics of eCommerce
4. Types of eCommerce Models
5. Examples of eCommerce
6. Advantages and Disadvantages of eCommerce
7. How to Start an eCommerce business
8. Choosing eCommerce platform
9. The Future of eCommerce
10. FAQs

eCommerce, also known as electronic commerce, is the marketing of goods and services , and every transaction done online involves a seller and a buyer.

The term ecommerce mainly refers to the sales of physical products on the internet. Still, one can also describe it as any commercial activity done on the internet. Individuals can perform these commercial activities on laptops, smartphones, tablets, and other intelligent devices.

eCommerce includes online retailers like Amazon, eBay, Etsy, Flipkart, Myntra, Paytm Mall, sellers of digital books like eBooks, online services, and many others.

A relatable example of ecommerce is when you paid for an eBook or software on an online store. You took part in ecommerce, which was done via one of the b2b commerce platforms.

Ultimately, every individual in the 21st century with internet access has engaged in electronic commerce in one way or the other.

However, this hassle-free technology began in 1960 when there was no internet. Companies were known to use an electronic system called the Electronic Data Interchange to enable the transfer of documents.

As time progressed, on the 11th of August, 1994, the first online sale was made by a man named Phil Brandenberger, who sold a CD called the Band Sting to his friend for $12.48 through his website, NetMarket.

Afterward, in 1969, CompuServe was founded by Dr. John R. Goltz and Jeffrey Wilkins, electrical engineering students. They built the system by utilizing a dial-up connection. In the 1980s, CompuServe dominated the ecommerce landscape by introducing the earliest form of emails and Internet connectivity to the public.

In 1979, Michael Aldrich, an English inventor, introduced electronic shopping by connecting a modified TV to the transaction-processing computer.

After this innovation, Boston Computer Exchange was launched in 1982, making it the first internet commerce company. Its main aim was to serve as an online market for people interested in selling used computers.

In the late 90s, particularly in 1992, Book Stacks Unlimited launched the first online book marketplace. Its pioneer, Charles M. Stack, changed from the original dial-up bulletin board format. And in 1994, the site switched to the internet and operated from its Books.com domain.

It is worth noting that in 1994 Netscape Navigator became the primary web browser on the Windows platform, (there is now Microfost-powered net ecommerce platform) before the arrival of modern giants like Google.

1995 saw the launch of a well-known Amazon.com, with Jeff Bezos being the brain behind the establishment. However, upon starting, it was initially introduced as an ecommerce platform primarily for selling books.

As time progressed, another essential piece joined the eCommerce puzzle, PayPal, the most reliable eCommerce payment system. It was launched in 1998 by Max Levin, Peter Thiel, Luke Nosek, and Ken Howery as a money transfer tool.

By 2000, it merged with Elon Musk's online banking company, marking a significant beginning to its fame and popularity.

In 1999, one of the world's largest online marketplace, Alibaba, was launched with up to $25 million worth of funding. By 2001, it went on to turn into a central B2B, C2C, and B2C platform that people used worldwide today.

Ultimately, we can conclude that from 1969 down to 2020 - in the outbreak of COVID-19 - electronic commerce has gone through a series of changes, resulting in a significant evolution.

It has evolved to make products easier to discover and purchase and has also helped independent freelancers and corporations sell their goods and services at a scale that would not have been possible on an offline retail platform.

eCommerce has come a long way since the CompuServe launch in 1969 till date. The changes in technology have facilitated eCommerce growth, not to mention the global circumstances.

eCommerce has met consumers' expectations in different ways.

• In 2019, US retail sales on Amazon increased by 19.1% and amounted to 222.6billion US dollars overall.
• The total number of global eCommerce sales in 2020 was $4.28 trillion, and experts expect it to grow to $5.4 trillion by 2022.
• 95% of all purchases would be online as expected in 2040.
• One of the primary reasons why people make online purchases is that they can shop whenever they want.
• 43% of eCommerce traffic comes from Google searches.
• Websites that are slow in loading receive an abandonment of 75%.

Due to the COVID-19 outbreak worldwide, consumers only could use online marketplaces, which have developed to become a new normal.

By May 2020, ecommerce transactions reached $82.5 billion. It would have taken a long time of four to six years to get that number looking at previous records. Now, consumers have proceeded to online marketplaces to make purchases they would have typically made in physical stores. Many consumers have also considered this to be a safe way to prevent being infected by the virus.

eCommerce has brought about a life-made-easy way of marketing both for sellers and buyers. You can purchase anything and everything online, from as little as coffee and action figures to massive items like vehicles and industrial machines right from your home.

eCommerce operates in six distinct segments, and they are:

Business to Business (B2B) is the direct sales of goods and services between two businesses. Essentially, an establishment sells its offerings to another company, and sometimes, the buying firm is the end-user, but often, the buyer resells to their customers.

Naturally, this business model presents significant benefits compared to the conventional methods of commerce. Such benefits include a higher-order value, longer sales cycle, and more recurring purchases.

It's worth noting that roughly half of B2B buyers will be millennial in 2020, making the eCommerce model more critical as the younger generation reach the age to perform business transactions.

This model of eCommerce covers the transactions made between online businesses and administrations. Regularly, the products and services involved are related to legal documents, social security, etc

This model is quite different from B2A in that consumers sell online products or services to an administration. Some typical offerings associated with this model include online consulting for education and tax preparation.

There are different forms of internet commerce involving several transactional relationships between businesses and consumers and other objects in between these transactions.

We are going to look at them one after the other.

• Retail: this is the sale of a product by a business directly to a customer without a middleman.
• Wholesale: This sells a product in bulk to a retailer who sells directly to a consumer.
• Dropshipping: a third party comes in this example. The products are manufactured and shipped to the consumer by this third party.
• Crowdfunding: Crowdfunding involves collecting money from consumers before a product is available to raise the initial capital necessary to bring the product into the market.
• Physical Products: Any tangible item that requires an invention to travel physically to the customers after payment.
• Digital Products: these are downloadable digital goods, templates, and courses, or media that individuals buy from an online store for consumption.
• Subscription: this good is automatic and constantly recurring. Purchased products or services subscribed to are regularly until the subscriber chooses to discontinue.
• Services: service involves someone providing their time for a fee in exchange for a skill or set of skills.

The benefits of opting for eCommerce are undoubtedly overwhelming; however, this essential, hassle-free concept comes with a few disadvantages worth discussing. Fortunately, this section will shed more light on both the pros and cons of electronic commerce.

• Easy access to new customers: through online platforms with the benefit of social media and email marketing, companies can easily reach their clients from anywhere in the world.

An ecommerce store doesn't tie to just one geographical location, making it open and available to any customer who visits it online.

• Comfortable buying experience: for customers, ecommerce makes buying anywhere and time possible. This concept means consumers can get what they need faster without constraints, as would be experienced by operating hours of a brick-and-mortar store.
• Increased selection: unlike brick-and-mortar stores, online stores can have the ability to offer a variety of products and services that wouldn't have been possible in a physical store. There is also an exclusive inventory for customers that is unavailable elsewhere.
• Personal experiences: reviews on personalized experience from customers can be made and used as a marketing tool, leading to a higher average order value(AOV) and making the buyer feel like you understand them for real.
• Lesser cost of operation: because all activities will be online, you would cut down the need to put up a physical structure and the worry of getting trustworthy staff. Reducing the cost of operation and the overall capital of starting an eCommerce business

As more sales accumulate, brands can quickly scale up their strategies without providing a more extensive workspace or workers.

What products and services would I offer? Who would buy this? Who else is into this? How am I going to benefit from this? These questions are most likely on your mind as you conceive the idea of starting an eCommerce business and assess the pros and cons of the decision.

Keep in mind that starting an online business is equally as tricky as a brick-and-mortar one since it involves substantial research, financial resources, several steps, and many more. Both business types have notable differences in their mode of operation; nevertheless, the execution determines your success.

To begin your journey in the eCommerce world, below is a step-by-step guide on how to start:

As a brick-and-mortar business is a physical store, so is an ecommerce business to an online store. An ecommerce business has to have a platform where marketing takes place.
These include the following:

• Designing your ecommerce website.
• Choosing domain names
• Checking out other ecommerce platforms and how they work.

However, the first and most crucial step is knowing your business world, including your business name, your business structure, the services rendered, and a website (as mentioned in the previous headline).