What is e-commerce?

E-commerce stands for electronic commerce. It is the process of buying and selling products or services through the internet. Today, E-commerce is a massive field and a booming industry, and there are hundreds of thousands of stores selling products to billions of people.

What is e-commerce?

Table of contents:

How can you get into e-commerce?

How does e-commerce work?

Benefits of e-commerce

Essentials to start e-commerce

Major types of e-commerce

Top e-commerce companies

E-commerce stands for electronic commerce. It is the process of buying and selling products or services through the internet. Today, E-commerce is a massive field and a booming industry, and there are hundreds of thousands of stores selling products to billions of people.

The first e-commerce thing sold was a CD for Sting, an English musician and actor in 1994.

In recent years, E-commerce has expanded exponentially and will continue to do so. The number of e-merchants has increased after the Covid19 pandemic in parallel with the number of people buying online.

Nowadays, e-commerce is the fastest growing retail market. With e-commerce, your products and services will be so easy to discover and purchase at any hour of any day from almost anywhere in the world.

How can you get into e-commerce?

You can get into e-commerce in two ways: You can be a buyer and buy everything you want online from groceries to any product you want, or a seller and set up your own e-commerce store; which is straightforward  and a lot easier than setting up a physical store.

How does e-commerce work?

If you are a buyer, you should go to the website you want to buy from and that you often find through Google search, you choose the product you want, you add it to cart and then you check out. Mostly, e-commerce websites offer different methods of payments (Credit card, Cash on delivery …). Depending on how that store delivers their products, it might just take one day or a couple of weeks.

If you are a seller, all you need to get started are the essentials including a product or service to sell, a platform where to sell them, a payment process, and a marketing strategy to attract customers.

Benefits of e-commerce:

  • Global market: With e-commerce, you have a global market which multiplies your target audience exponentially. Also, it helps you choose who your customers are and define how to target them. With an online store, you are open 24/7, 365 days a year. You also have the ability to work from anywhere in the world, with an internet connection
  • Low investment: E-commerce requires a lower investment compared to traditional commerce

Essentials to start e-commerce:

  • Product or service: You can either make something yourself or source it from somewhere else. After choosing a product or service; think of who you want to sell your products or service to ( consumers or businesses)
  • Sell something unique: When selling something unique, you get less competition and more chances of sales
  • Solve a problem: The product you choose should solve a problem people are suffering from
  • Cost of goods: Try to price your products at a low enough rate in order to remain competitive to similar products on the market. However, don’t price your products too low that you don’t make a sufficient profit to keep operating, neither too high to avoid that no one will purchase your products
  • Place to sell your goods: The nature of e-commerce is selling online, so you will not need a physical storefront. All you need is a website or an e-commerce platform to sell your products from. When choosing your platform, keep in mind these factors: Pricing, scalability, Flexibility and ease of use
  • Process payments: You should think about how you will be transacting with customers. This is a very important decision. Your payment provider must be someone who is credible and trustworthy. Before choosing your payment service provider, make sure it is compatible with your e-commerce platform, available in the countries that your business is targeting, accepts payments in different currencies, charges affordable fees and offers good customer support
  • Marketing strategy: You need a good marketing strategy that is constantly reviewed and adjusted to attract your customers and make sales

Major types of e-commerce:

Based on nature of the transactions, the types of e-commerce are:

  • Business-to-Consumer (B2C): Is the e-business between companies and consumers. It involves customers collecting information, purchasing physical goods, or intangible goods. B2C is considered as the second largest and the earliest form of e-commerce. In B2C e-commerce, customers are following their emotions and the purchasing process tends towards ameliorating their lives and leveraging their e-shopping experiences
  • Business-to-Business (B2B): Is e-commerce between companies. This type deals with relationships among businesses. Based on expert predictions, B2B e-commerce will continue to grow faster in the upcoming years. Walmart stores are an example for B2B e-commerce. Walmart’s major suppliers sell to Walmart stores electronically and can access online the inventory status in each store and refill needed products when needed
  • Consumer-to-Consumer (C2C): Is the e-commerce process where consumers sell directly to other consumers using the internet and web technologies for the transactions, a variety of products and services on the web or through auction sites like Consumers are also able to advertise their products or services to make them reach more potential customers
  • Consumer-to-Business (C2B): Contrary to the usual way of working, this type of e-commerce involves individuals selling goods and services to businesses. Fiverr is a very good example to illustrate C2B e-commerce. Through this platform, consumers can post their services and businesses can answer with bid proposals
  • Business-to-government (B2G): Commerce between companies and the public sector. It refers to the use of the internet for government operations. This type of e-commerce has two features. First, the public sector assumes a pilot major role in establishing e-commerce. Second, it revealed that the public sector has the biggest need for making its procurement system more effective
  • Mobile Commerce (m-commerce): Is the process of buying and selling goods and services through wireless technology handheld devices. Japan is the global leader in m-commerce. Shopping with mobile devices is trending today, and expected to continue to expand in the future

Top e-commerce companies : 

  • Alibaba: Is a multi-billion dollar company owned by Jack Ma. Alibaba revolutionized the e-commerce market and became one of the most valuable companies in the world. Launched in 1999, Alibaba is today the most known destination for e-commerce that brings together hundreds of millions of users and millions of e-merchants and companies
  • eBay: Started in 1995, eBay is considered as the first online marketplace where online users can buy and sell almost anything they want. eBay gives to its visitors, when they want to buy an item; the choice between buying at the price displayed and biding for the item in an online auction
  • Amazon: Back to 1995, Amazon was launched by its founder and CEO Jeff Bezos, who is today the richest man on earth thanks to his company. From an online book retailer to one of the most valuable sales platforms in the world, Amazon allows its customers to compare prices from different sellers and have the best online purchase experience by having items delivered straight to their doors
  • Walmart: Is one of the largest retail stores in the United States. It was founded by Sam Walton in 1962 Walmart is known for offering low prices products, and has more than 200 million customers weekly in its various outlets in about 27 countries