What is ecommerce? Launch and grow an online sales channel

"Ecommerce" or "electronic commerce" is the trading of goods and services on the internet. It is your bustling city centre or brick-and-mortar shop translated into zeroes and ones on the internet superhighway. An estimated 2.14 billion people worldwide buy goods and services online, and the number of Prime members shopping in sAmazon stores globally now tops 200 million.

Ecommerce is one way people buy and sell things in retail. Some companies sell products online only, while other sellers use ecommerce as a part of a broader strategy that includes physical stores and other distribution channels. Either way, ecommerce allows startups, small businesses, and large companies to sell products at scale and reach customers across the world.

An ecommerce website is your digital storefront on the internet. It facilitates the transaction between a buyer and seller. It is the virtual space where you showcase products, and online customers make selections. Your website acts as the product shelves, sales staff, and cash register of your online business channel.

Businesses might create a branded store experience on a store like Amazon, build their own commerce site on a dedicated domain, or do it all for a multi-channel approach.

An ecommerce business is a company that generates revenue from selling products or services online. For example, an ecommerce company might sell software, apparel, housewares, or web design services. You can run an ecommerce business from a single website or through multiple online channels like social media and email.

Ecommerce works by connecting buyers and sellers using various electronic channels. For example, you need a channel, such as a website or social media, so customers can find products and services to purchase. Then a payment processor enables the exchange of the goods or services. Once the transaction succeeds, the customer receives a confirmation email or SMS, and a printable receipt.

If the transaction is for goods, then the seller ships the items and sends the customer a tracking number via email or SMS. If the transaction is for a service, then the service provider can reach out to schedule and complete the service.

Like any sales method, ecommerce can have upsides and downsides. Is ecommerce right for you? It’ll depend on your business goals, your intended audience, and other factors. Here are some considerations.

All of these points offer strong incentives to participate in ecommerce. Let’s explore each in detail.

In the past, a business’s reach was limited by the number of people able to physically enter through a store’s front doors. Today, ecommerce allows you to reach customers across the world. The rise in internet usage and the growth of social media have made it easier for ecommerce business owners to reach a diverse new mix of customers.

With all the different types of ecommerce, customers can browse options and make purchases from anywhere with just a few clicks. Amazon makes it easy to sort and compare products by price or features. Online payment innovations can further streamline the checkout process.

Creating and maintaining a website is less expensive than running a traditional brick-and-mortar store. You can start an ecommerce business channel without leasing retail space, hiring a team of employees, or having a large warehouse.

All of these advantages add up to low overhead. You don’t need to pay rent or worry about building maintenance. Once online, your store is open 24 hours a day—without the need to be monitored or staffed like a physical store.

You can use website building tools and services to establish your own ecommerce store quickly, or you can forgo building a website and launch your brand on social media or a store like Amazon. Many businesses sell on numerous online channels.

Let’s walk through each of these potential pitfalls.

Face-to-face interaction is necessary for some businesses and transactions. Depending on your product, service, or sales style, it may be challenging to bring the full force of your personality into an online space.

While there is no magic solution, keeping your brand how story at the fore of all you do can help you maintain authenticity online. Alternatively, if you prefer communicating with customers via email or phone, this drawback might be a huge plus!

Challenges related to technology can negatively impact sales. Just as a hiccup in your supply chain can prevent timely delivery of products, internet issues, or a hard drive failure can cost you time and money.

Remember, for every technical issue that may arise, there’s likely a solution or a preventative measure you can take. Be sure to back up your data regularly. Using a store like Amazon can help mitigate these risks with an established, trusted technical infrastructure.

Customers care about how information is stored and shared. Build customer trust by giving details on your privacy policy. Doing so demonstrates transparency and reassures customers that you will safeguard their personally identifiable information.

Amazon has worked for decades to create a secure shopping experience, and businesses that sell in Amazon benefit from long-standing customer trust. When you host an ecommerce store on your own domain, you need to find a secure payment processing service and take reasonable measures to avoid putting customer data at risk.

It may be easy to pack and ship orders from your garage or spare room when you’re starting out in ecommerce. But as your business grows, order fulfillment becomes a much more time-consuming process. Sudden increases in orders can leave you scrambling to fulfill orders. Using a service like Fulfillment by Amazon can help reduce the strain on your business and keep customers satisfied.

Learn how to choose the right ecommerce fulfillment service to grow your business.

A few key ingredients go into every high-performing ecommerce business. To set yourself up for success, focus on the product and your audience, first and foremost. Also, consider your brand messaging and your store’s user experience. You should also consider your fulfillment process, ensuring the timely delivery of products for maximum customer satisfaction. Let’s explore each of these critical components in detail.

High-quality, reliable products and ecommerce services are at the heart of successful online brands. Your product should solve an unmet customer need or challenge. You must also offer it at a compelling price point.

Product quality and pricing can make or break your ecommerce business. Do some market research to get a sense of what types of products your competitors are selling, as well as the market value of similar items.

Unique brands stand out, but a great brand takes more than a great product. To catch a customer’s attention, convey your business’s purpose and vision.

Ask yourself, why does your business need to exist? How will the products make your customers’ lives better? Your branding should convey the answers to these questions.

Spend time thinking about the look and feel of your brand. Dig deep and find a simple, powerful way to convey the origin and mission of your business.

Define your ideal audience to help attract loyal and enthusiastic customers. Who do you want to serve with the products? Direct your marketing efforts accordingly.

Once your business gains steam, keep the momentum going by considering who will be moved by your brand story. Instead of chasing after buyers who don’t need what you’re selling, focus your efforts on an audience that will appreciate your brand.

Online stores should be user friendly. When the online experience of a store is well-designed, making a purchase feels effortless. If customers have to jump through too many hoops, they will abandon carts before completing transactions, and sales could suffer.

Successful ecommerce stores keep the spotlight on products by streamlining the checkout process. Remove any unnecessary steps, make your user experience intuitive and straightforward, and bask in the glow of happy customers.

Customers want speed and efficiency, especially when shopping online. No matter what you sell, customers want purchases delivered intact and on time.

Fulfillment is the process of getting products to customers. It can include sourcing products, storing and packaging orders, handling returns, and maintaining customer communication. Successful ecommerce shops pay careful attention to the fulfillment process and make sure they have enough product on hand to fulfill their orders, even during their busiest seasons.