In recent years, e-commerce has been booming beyond wildest expectations.

It‘s estimated there are already 1.92 billion online buyers across the globe. Fueled by this high demand, e-commerce is poised for explosive growth and expected to reach $27 trillion by 2020.

And this is just the beginning: numbers are only expected to rise in the years to come.

Tech infrastructure is in place to support such development. Internet connection is ubiquitous and ever more powerful smartphones constantly streaming. Customers absolutely cherish the convenience of shopping on their own terms.

Large marketplaces are still dominating the market. At the same time, more and more small businesses and freelancers are attempting to establish a foothold and sell at an unprecedented scale. They are exploring exciting new avenues such as B2B e-commerce.

Here are some key things you should know about e-commerce before diving in.

What is E-commerce?

E-commerce refers to the process of selling and buying products via digital means (apps and internet browsers). This definition encapsulates sectors like online retail and a matrix of online transactions that represent their blood flow. Hence, e-commerce spans the globe and operates around the clock. Online shopping is easily the most well-known and most-explored facet of it. This is nothing short of a revolution in the way we perceive and handle transactions. Unlike traditional businesses, e-commerce organizations aren’t constrained by the geographical territory they serve. They don’t have to be physically present or headquartered in that area at all. In fact, e-commerce companies tend not to own and maintain brick-and-mortar stores. As a result, they face fewer overheads. The beauty of it is the leap from local to global arena doesn’t incur extra expenditures.

E-commerce Business Models

Upon hearing the word e-commerce, most people evoke images of popular business to customer (B2C) brands. However, the field is vaster and more diverse than they assume. We have witnessed the rise of various new business models. Based on who is involved in the transaction, we can distinguish:

• Internet banking
• 2C
• Online auction sites
• Online ticketing/reservations
• Business-to-business (B2B e-commerce)
• Consumer-to-consumer (C2C)
• Consumer-to-business (C2B)

Some of these deserve a bit more attention.

B2C organizations are the most common of all. They exist in virtually every niche. Online retail is the largest sector of this e-commerce subset and it’s still soaring. C2C field is much smaller, albeit growing steadily year after year. It’s composed of a network of transactions that occur between consumers. Here, eBay remains the leader, closely followed by Etsy and Craigslist. C2B is an even more obscure domain of e-commerce. As the name suggests, this model involves customers selling or contributing money to business organizations. Crowdsourcing platforms in the league of Kickstarter are its pioneers. Finally, B2B e-commerce takes place between two businesses. Instead of individual customers, sellers target whole organizations. HubSpot is a prime example of a B2B industry leader. The company specializes in inbound marketing services and sales software solutions.

The Main Benefits of E-commerce

In this day and age, setting up an e-commerce business is a rather streamlined venture. There are many platforms you can utilize to have a jump-start. These tools are beginner-friendly and require no technical knowledge. We are going to cover them in a bit more detail later. One great benefit to emphasize here is related to startup and operating costs. Namely, they are lower than with conventional businesses. You don’t have to worry about rent, utilities, and employee payroll. In fact, there are very few fixed expenditures to speak of, except for warehousing and product storage. Additional value can be unlocked with businesses automation. For example, automated inventory management is quickly becoming an industry standard. There’s no shortage of online tools from third-party vendors for managing the stock effortlessly. Automation has also revamped the process of ordering, delivery, and payment processing. So, use this technology wherever possible— you will make significant savings. Moving on, the potential reach of an e-commerce business is global. You are location-independent— not limited to your local backyard. Did we mention that the working hours are of no concern either? Yes, that means you are able to generate an interrupted stream of profit. Finally, as time rolls by, you obtain valuable consumer data. This can be done via website pop-ups, information forms, and cookies. Processing these different data points enables you to create buyer personas and deploy highly-targeted marketing campaigns. Such an approach yields impressive results in terms of customer acquisition and retention. Moreover, the data-backed strategy can pave the way to niche market dominance.

Different Types of E-commerce Merchants

In general, there are two basic types of e-commerce merchants:

• Merchants selling physical products
• Merchants dealing with digital products

The difference is rather self-explanatory. Even though they both use electronic platforms, one sells items you can touch and feel (apparel, appliance, book, etc.). On the other hand, digital products are downloadable files you store on a computer or other device. They take many forms, including e-books and computer programs. Online courses and webinar fall into the sub-category of digital services. This line of distinction has profound practical implications. Most notably, physical products have to be transported, stored, and shipped to customers. Digital products can be obtained right away through electronic transfer/download. Apart from a bit of space on a disc, the transaction requires little more. So, if you are a physical merchant, you need to think about how to source your products. In essence, your choices boil down to four options:

• Wholesaling
• Drop-shipping
• Making
• Manufacturing

All of them have unique pros and cons you should evaluate. For instance, upfront and ongoing costs of drop-shipping are lower because the goods go from the manufacturer directly to the customers. You don’t hold any inventory yourself. Still, drop-shipping isn’t always the most optimal model. It all depends on what kind of business you run.

What Kind of E-commerce Businesses Can You Start?

Time has never been better for launching a digital storefront. You can sell pretty much anything, as long as it’s legal, profitable, and shippable. But, you cannot rush into the whole endeavor unprepared or act on a hunch. The truth is that for various reasons (mostly poor planning), most e-commerce businesses go under. The good news is there are some traits that all successful brands share. First off, their leaders refrain from doing any guesswork. Instead, they conduct market research to find a suitable niche. You also want to do go down this road, which includes gauging the level of competition, as well as potential demand. Only data can allow you to make a well-informed strategic decision. Relying on it, you avoid oversaturated segments of the market. Also, it gets easier to flesh out a unique selling proposition (USP) and draft a business plan. In other words, you have an opportunity to stand out and instantly reach your customers. Next, accomplished entrepreneurs know one has to spend money in order to earn money. In theory, you may start the storefront with zero-dollar investment. But, if you really mean businesses, you are better off making some investments Take the example of great user experience (UX), which is what sets one brand from cohorts of others. How much attention and resources you dedicate to it matters a great deal. One way to establish a web presence is from scratch. This is a more expensive tactic because you have to hire freelance developers or an agency. The investment may pay dividends in the long run due to benefits that 100% customization gives you. Alas, not everyone can afford to do so. This is why most newcomers go for off-the-shelf web builders. They are a less costly and simpler pathway to assembling a functional online store. You can hardly go wrong with trusted e-commerce platforms such as WooCommerce, BigCommerce, Magneto, and Shopify. All-in-one solutions like e-commerce Makilla are a sound choice as well. You get point of sale, B2B, and shopping cart in a complete app package. There are also multiple payment gateways and complete data reports to integrate. Of course, you can consider other, more specialized tools. So, do your homework! Assess your needs, means, and goals. Factor in projected growth and expansion, especially if you plan to scale quickly. Create a list of must-have features, settings, and features. It’s a good idea to keep an eye on the following aspects:

• Inventory management
• Payment collections
• SEO features
• CRM
• Store management
• Order fulfillment
• Site analytics
• Popular integrations
• Shopping cart
• Secure checkout

The list isn’t all-inclusive, but it’s a good start.

What Does It Take to Launch an E-commerce Business?

This question has many different answers, depending on whom you ask. Some entrepreneurs underline fast and/or free shipping. Others attribute success to return policies. There are also those who claim that safe and fast payment is the main consumer magnet. Well, the truth is all these things matter. What you don’t hear that often is that coming across as another generic, one-of-many brands is something to avoid at all costs. To be more precise, you have to develop your unique brand’s identity. From a visual standpoint, you can pull it off by selecting an appealing theme, which reflects your brand personality. A customized website always makes a striking first impression and awakens curiosity. Secondly, it would be wise to create a store that is simple and intuitive to use. Ideally, your product pages feature comprehensive, accurate descriptions and quality, high-resolution images. FAQ section is there to address any dilemmas and concerns customers may have. Moving on, it’s crucial to publish relevant and helpful content. In case you are a fashion brand, for example, you want to write makeup tutorials and lists of top seasonal trends. You can also make good use of user-generated content. You make customers feel like a part of your mission and get some content pieces for free. It’s a clear win-win! Finally, bear in mind that apart from pricing, there are many other fronts where you can compete. Leaders like Amazon have the fastest-loading websites in the market. Their servers are highly reliable, with almost no downtime. The lesson is clear: It pays off to invest in the technical side of things and make your site work like a charm. The list of business-boosting ideas goes on, so feel free to research on your own. More power to you!

Get On Top of the Game

E-commerce is the present and the future of shopping. The winds are certainly favorable, but there are a couple of problems. The profit isn’t there for the taking and making the first steps can be intimidating. To have a real fighting chance, you have to come up with a solid game plan. Harness the power of data and let consumer wants and needs dictate your choices. Then, add digital tools to your arsenal and get operations off the ground. Once you set up a strong online presence, engage in laser-focused marketing and start delighting the audience on a regular basis. Provide stellar customer experience: offer a fast, secure, and easy way to order merchandise. Instill confidence and build your brand name. That’s the way to take advantage of the benefits e-commerce has in store and steer clear of the risks. Just remember that work only begins once you go online. It entails constant learning, optimization, and promotion. Oh, and feel free to check out e-commerce Makilla— it might be just the right fit for you. It’s time to secure your sizeable slice of a market pie. References:
1. https://www.oberlo.com/blog/ecommerce-statistics-guide-your-strategy
2. https://ecommerce-platforms.com/glossary/ecommerce#benefits
3. https://www.oberlo.com/ecommerce-wiki/ecommerce
4. https://www.shopify.com/encyclopedia/what-is-ecommerce
5. https://www.oberlo.com/blog/what-is-ecommerce
6. https://www.ecommerceceo.com/start-ecommerce-business/