Does your e-commerce work offer value to your organization? Overall, did the last project completed provide good value for money; did it improve customer experience; did it contribute to the bottom line? What measurements and metrics were in place to map back to?
These are the questions e-commerce managers need to be asking themselves when they embark on new projects. To develop a further understanding of retailers and e-commerce managers challenges, successes and failures, we conducted a survey of 100 senior e-commerce decision-makers within UK retail.
We found that 30% of retailers operate in an e-commerce value trap, and expect to get no value back from their work – a staggering statistic when considering any e-commerce project.
The survey also revealed 99% were facing an e-commerce challenge. For decision-makers commissioning e-commerce work – it’s startling to think that there’s such a high expectation of problems and failure. But why is this the case?
The e-commerce value trap
The study uncovered that measurement is a big issue for organizations, with a staggering 71% not measuring return on investment in e-commerce projects in any way.
In addition to this, here were more surprising statistics demonstrating the e-commerce value trap:
- One in three fail to meet the business objectives
- 5% will not meet any KPIs and be a complete failure
- 1/3 struggle to find acceptable and meaningful metrics for success
- 52% don’t track customer retention
This adds up to a significant amount of money. On average the cost of failed or abandoned e-commerce projects is as much as £180,000. If retailers are expecting 30% of their work to give them no value – that’s £217,000 of an e-commerce project budget of £725,000.
Without defining value and metrics, e-commerce leaders are lost
How to define value and put the right metrics in place is such an important part of any e-commerce project. However, the survey shows this appears to be a big problem for UK retailers. It’s clear that work is started with no clear goals in mind. This could be down to projects not being fully scoped out, or that work is started without success being fully defined, or what it’s going to achieve for the business overall.
But how and why are so many retailers and professionals caught in this e-commerce value trap?
Align your organization before beginning e-commerce initiatives
E-commerce needs to be viewed as an issue and an opportunity for everyone in the organization. That’s not to say you need to let every cook into the kitchen, but it’s about collaboration and understanding on all sides.
Sometimes there can be tension between IT and marketing, or high street stores and their online counterparts. These are problems the leadership of a company needs to solve.
Ensuring alignment across the organization is key to the overall success of the company – never mind individual projects. Any and all projects need to have a business case attached to them, and e-commerce is no exception. If there isn’t clarity in why a project is being completed at that time, perhaps it isn’t the right time at all.
CX, DX, UX, but first
How can you match what the customer wants with what’s possible for your organization at that time?
While it can be tempting to implement the next ‘big thing’ when it comes to technology – it’s more important for retailers to understand their customer pain points and evaluate what will deliver the highest ROI.
Success is increasingly being determined by the digital experience, which means it’s critical to get the basics right before investing in more cutting-edge technology.
To avoid an e-commerce value trap, you must first define value – it’s one of the most important parts of any e-commerce project. It’s from this point that goals, metrics, and timelines can be agreed upon. They need to be realistic, business-centric, and clear for all parts of the business to understand and move forward with.
The next step is scoping out the project including all metrics: what’s the vision; how will the project impact the business; how will customers be affected and/or delighted; what’s the benefit to the balance sheet; what are the ideal and realistic timescales?
Determine what success looks like and build back from there. This ensures value is added to a project, and there won’t be a negative cost associated with metrics, since they’ll be clearly mapped out for the duration of any project.
Retail doesn’t rest. A recent survey of digital execs shows where e-commerce is going. Get the stats + data HERE.
In the last few years, the growth of e-Commerce has been somewhat exponential; especially with the invasion of the Covid-19 pandemic. According to statistics, over 2 billion people ordered products and services online in 2020, with global e-Commerce sales exceeding 4.2 trillion dollars. In fact, e-Commerce is growing at such a rapid pace that it is predicted to service over 2.14 billion people by 2023. So the question of whether or not venturing into the e-commerce business would be profitable shouldn’t be up for debate. Like every business out there, e-Commerce has its advantages and drawbacks. The real questions should be, “Do these advantages outweigh its disadvantages; or rather Am I willing to take calculated business risks, leveraging on the advantages while setting frameworks in place to mitigate those risks?”
Either way, you’d need every information at your disposal to make these decisions. In light of these, we’ll go over both advantages and drawbacks of the e-commerce business.
What Are the Advantages of E-commerce?
The cheap financial cost of e-Commerce is at the top of the list, even though other benefits include selling abroad, retargeting customers, personalizing the purchase experience, and so on. The e-commerce advantages below will help you decide whether or not opening an online store is the best option for you.
Low Financial Cost
Unlike physical stores, online stores are more cost-effective. To rent a physical retail store, business owners have to pay heavily. They also have a number of up-front expenses, such as retail signage, store design, inventory purchases, sales equipment, and so on. Not to mention the fact that the store owner must hire employees to work and run each site. Depending on the store’s merchandise worth, they may additionally need to recruit security personnel.
Startup costs for an e-Commerce dropshipping business, on the other hand, are within the range of $450-$550; that’s regardless of whether you decide to build it on WordPress or rent space on Shopify.
Read Also: Start An E-commerce Business & Make Money From Home & Anywhere! Discover The Secrets.
However, depending on the type of e-Commerce business you have in mind, you may only need to hire people if you have reached a particular level of success. And because your online store is online, these employees can work from anywhere, making it easier to discover employees who are a good fit for your business. You won’t need to acquire bulk inventory if you dropship online, which will save you a lot of money.
With e-Commerce, branding is also less expensive. A store logo is usually less expensive than a store sign. Graphic designers (even the best ones) are frequently less expensive than an offline paint job. One of the most appealing perks for new entrepreneurs is that their business expenses are often substantially lower.
Potential Income 24 hours a day, 7 days a week
With an e-Commerce business, you can reach also out to those with irregular work schedules or who don’t have time to purchase in person.
Furthermore, think about clients who place their orders late at night. To meet their needs, you don’t need staff working the night shift. To provide your consumers peace of mind, automate your ordering systems so that they receive a confirmation email when they place an order.
An added advantage when it comes to opening an online store over a physical store is that you will never need to hire a security guard!
Luxury of Selling Internationally
Next on the list of e-Commerce advantages is the ease with which a new brand can sell to customers in any part of the world. You might find your target audience in the United Kingdom, South America, or neighboring countries. If you opt to dropship from AliExpress, several products have low-cost or no-cost ePacket shipping. This enables you to sell and send your products to a global audience at a competitive price.
Selling internationally is a fantastic aspect of the e-Commerce business since it allows you to establish your brand faster, expand your market considerably, and profit far ahead of your local competitors.
Simplified Display of Bestsellers
Displaying best-sellers and other e-Commerce features makes it easier to show off products to your customers. While you can design a brick-and-mortar store to persuade customers to buy certain things, it’s faster for a customer to find the best-sellers in an online store than it is to travel through multiple aisles and shelves.
The upside to this is that customers would more willing to buy your best-sellers since they already have a good track record. Basically, others have already purchased these and are pleased with their purchase. So, you can incorporate new products in your upsell, email marketing, or retargeting advertisements to show them to customers.
Read Also: FREE EMAIL MARKETING TOOLS: Best 11+ Tools 2023, Updated!!!
Personalized Online Experience
One of the most significant advantages of running an online retail store is the ability to develop customized landing pages for various audiences. This persuades them to buy from you without requiring much additional effort on your part. It’s totally different from customers who walk into a physical store and need to be nurtured right away. In this case, you put in all of the efforts before launching a campaign, for example, and then sit back as soon as you commence marketing to your target base.
You can also personalize your email marketing campaigns to provide a more personalized experience. Consider segmenting your email lists depending on customer purchases, region, or even the amount of money they spend.
Read Also: EMAIL MARKETING LIST: Is buying a better choice?
Another approach is to retarget customers who have visited your online store by showing them an advertisement for a product they added to their cart but then forgot to purchase.
You can also design a welcome message to appear if your online business has a login feature, such as ‘Welcome back (name).’
Meanwhile, Product bundles allow customers to buy more at a lower price, resulting in a higher average order value. Upsells can also be customized based on what the consumer has looked at or what you believe they might enjoy based on their purchase history.
Reasonable Cost of Keeping Employees
The low cost of hiring keeping staff is one of the perks of this kind of business. And, as previously stated, you may hire from anywhere in the world. You have the option of outsourcing work to virtual assistants in countries with cheaper maintenance costs.
In contrast to a physical store, an online business will require less personnel. Plus, you don’t even have to hire them right away. You can build and operate on your own until you’ve reached a certain level of success or have sufficient funds.
On the other hand, the decision is yours to make. But in any case, there’s no scenario where you would as much workforce as a physical store demands.
Easier to Inspire Impulsive Purchases
Another advantage of e-Commerce is that you can profit from impulse purchases because online shoppers are more likely to do so. You can design commercials that promote impulse purchases if you have appealing product pictures with brilliant colors or human emotion.
To entice consumers to buy, you might also use scarcity strategies such as countdown timers or displaying limited amounts.
Furthermore, if you have a new or limited-edition product in your inventory, you can try it out for impulse purchases to see how consumers react. Impulse buyers are more social and image-conscious, so they may buy to brag about having gotten the latest goods before anybody else.
Simply put, people who add things to their cart but abandon them and do not buy, or those who browse a blog article but do not buy, can be retargeted. You can simply capture email addresses and market to your customers even after they leave your site with an efficient pop-up or lead magnet.
Less Invasive Experience for Customers
Oftentimes people avoid going into a physical store because they have to deal with the workers. Certain customers may prefer online shopping because it is less intrusive, making it one of the best advantages of e-Commerce. It’s a pretty straightforward process.
#10. Obtain Customer Data with Ease
One of the most appealing aspects of e-Commerce is the ease with which you may obtain data for customer analysis. Most individuals are hesitant to provide physical shops their email addresses or postal codes.
On the other hand, you can obtain your customer’s name, mailing address, email address, and phone number through an e-Commerce store. In literal terms, this means you have at least three options for communicating with them and developing a relationship with them.
#11. Ability to Process a Large Number of Orders
You can easily process a large number of orders if you opt to dropship. As your company grows, you may decide to hire workers to assist with order processing. But then, the dropshipping model eliminates the necessity to physically possess the product in order to sell it to a consumer. As a result, unlike physical retailers, you won’t have to worry about supply control.
Furthermore, long lines at stores can prevent consumers from shopping. There is no waiting period with online retail stores. Customers can place orders on their own time, which allows you to accept a large volume of orders.
#12. Ability to Scale a Business Quickly
Another one of the advantages of e-Commerce is the ease with which it can be scaled. As people click and buy, you can boost your ad spend without having to worry about keeping up with demand, especially if you dropship.
Furthermore, due to limited space, it can be difficult to expand product lines or add more cashiers in brick and mortar stores. To scale your business, you’ll need to find a larger place, renovate, or wait for your lease to expire. If you create informational products, you’ll have a similar problem, as writing ebooks, courses, and other materials take time.
O the other hand, you may add new products to your site without having to worry about shipping or inventory using the dropshipping e-Commerce strategy, allowing you to expand swiftly.
Read Also: How To Calculate Average Inventory- A Complete Step-by-Step Guide
# 13. Use Content to Grow Your Business Organically
With e-Commerce blogging, you can increase organic traffic and sales. You’ll be able to optimize your store to boost traffic and sales without having to spend additional money on anything from generating videos to writing blog content. Furthermore, you will be able to not only generate organic traffic through content development but also monetize those clients with retargeting ads.
This is more cost-effective than the brick-and-mortar alternative which would need to market to its customers or make sure they’re in a high-traffic location.
What Are Ecommerce’s Disadvantages?
There is a disadvantage to every advantage. As a result, it’s critical to be realistic while launching an online store. Below are a few common eCommerce challenges.
During a Site Crash, No One Can Buy
The worst e-Commerce disadvantage is when your site crashes and no one can buy from you. As a result, it’s crucial to ensure your website is hosted on the appropriate platform. If you go for the lowest-charged hosting option, your site will most certainly crash if you get a rush in traffic from a high-converting ad or a Shark Tank shout-out. So your best bet is to look out for options that would give you more space and security.
Fortunately, there are tons of them out there. You can make your pick from platforms like Hostinger, Bluehost, and the rest of them. Or better still go for platforms with ready-to-go e-commerce web templates like Shopify.
Customers Can’t Try Before Purchasing
While this is a prevalent setback for online several retailers, it will not be a long-term issue. Quite a number of them now use augmented reality features in their stores to allow shoppers to try on things; not literally tough.
How does augmented reality work? As an example, have a look at Sephora’s Virtual Artist app. Customers can visually test on different eyeshadows, lip colors, and more at the cosmetic retailer’s augmented reality experience.
It is Extremely Competitive
Another of the major e-Commerce drawbacks is battling for clients. The truth is that the most profitable niches are frequently the most competitive. That is why they attract so many entrepreneurs. The more competitive a niche is, however, the more expensive its ads are. There are a few ways to get around this. To begin with, you can implement a marketing plan that is distinct from that of your competitors.
Read Also: Most Profitable Niches For Your New Online Business
Customers Can Be Impatient
If a consumer has an inquiry at the store, a salesman is on hand to help. However, one downside of e-Commerce is that most businesses take forever to reply to clients’ inquiries. The reality is that most clients anticipate responses from a business on social media within an hour. They may become upset and shop somewhere else if you take too long to respond. You must be available 24 hours a day, seven days a week.
A simple fix is hiring a hands-on customer care representative. Upwork allows you to hire customer care agents that have been trained to make your clients happy. Alternatively, you can use a chatbot to assist clients in finding answers at any time of day or night. But none of this equates to a person who can care for each consumer on a one-on-one basis.
Shipping Durations Could Take a Long Time
One other prevalent ecommerce disadvantage, according to reviews, is shipment timeframes. When a customer purchases a product in person, she can take it home right away. Customers who shop online, on the other hand, typically receive their items in a week or more.
Despite the fact that Amazon offered same-day shipping, it was not a profitable business until Amazon Prime was founded. Because they have tens of millions of Prime subscribers, it has only recently become profitable. However, Transparency with your consumer is the solution. When customers place an order, let them know when they can receive their goods.
Physical Retail Is Still More Popular Despite
Regardless of the rapid growth in e-Commerce, physical retail still controls the majority of the industry. The retail industry had accumulated a total of $4.184 trillion notwithstanding the havoc wrecked on offline retailers due to the COVID-19 epidemic.
Starting an online retail business in its early phases helps you to establish yourself as a market leader. However, if you own a physical store, you should think about expanding your online presence, and vice versa. Despite being the largest online retailer, Amazon is now opening physical locations. Retailers such as Gap and Macy’s are also rushing to go online. Currently, there is a lot of potentials for e-Commerce businesses to leverage on.
What Are the 10 Advantages of E-commerce?
- Low Financial Cost
- Potential Income (24 hours a day, 7 days a week)
- Luxury of Selling Internationally
- Simplified Display of Bestsellers
- Personalized Online Experience
- Reasonable Cost of Keeping Employees
What Are the Advantages of E-commerce Short Answer?
The low financial cost of ecommerce is at the top of the list of advantages, but other benefits include selling abroad, retargeting customers, customisation of the purchasing experience, and so on. These ecommerce advantages can help you decide whether opening an online store is good for you.
What Is the Importance of E-commerce in Today’s Life?
- Less time spent buying and more time spent using.
- Business system that is transparent.
- The business grows more quickly.
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E-commerce always was the way of the future, but now it is more than ever before. The outside world has become a place of uncertainty, caution, and social distancing, bringing to light the many advantages of e-commerce for businesses and consumers.
, we’ve seen an increase in loan applications from e-commerce businesses that wish to grow and meet this increased consumer demand.
Why is e-commerce set to grow?
E-commerce was growing predictably up until COVID-19 put it on an expedited trajectory, accelerating the industry’s growth by 4-6 years! The pandemic shone the spotlight on the many e-commerce advantages, particularly that of convenience. During May alone, during the Coronavirus lockdown, global e-commerce sales reached $82.5 billion, a 77% increase over the previous year.
According to a Deloitte report, 85% of retail sales were through brick and mortar stores up until 2019. Then along came COVID-19, causing traditional retailers to scramble to get online and e-commerce numbers soared. The biggest shift in the US has been in the grocery shopping market. In March 2020, 42% of US consumers shopped for groceries online at least once a week compared to just 22% in 2018 (GeekWire, 2020).
Experts don’t see this as simply a short-term fix for Coronavirus concerns, and it’s been predicted that COVID will increase US e-commerce by almost 20% over the next year. Coronavirus served as a catalyst, propelling consumers into the online shopping world, consumer behavior that’s likely to continue, even once the Corona dust settles More than 50% of online grocery consumers state that they’re planning on shopping online even after the pandemic.
The lower costs of running an e-commerce store versus a physical store translate to cost savings for the consumer. This is one of the biggest e-commerce advantages. Online prices are typically lower than traditional store prices, and e-commerce sites are able to offer more discounts and promotions that are easier to claim.
Convenient and safe
Shopping when you want from where you want is far preferable (and a whole lot safer) than heading out in this COVID reality we’re now living in. Coronavirus aside, there’s also something to be said about shopping from your bedroom, without having to venture out, wait in lines, battle cold weather, and all the other challenges that go along with consumerism.
Wide product variety
In the global marketplace that is the internet, consumers can buy electronics from China, books from England, clothes from Paris, and good old US products all from the comfort of home. The width and depth of products sold online are unbeatable.
More informed decision-making
Information is literally at your fingertips when buying online, including:
Comparison shopping is another one of the top benefits of e-commerce to consumers, who can easily compare products, brands, and websites with even side-by-side comparison possible. Many comparison shopping sites exist with the sole purpose of enabling consumers to compare products side-by-side based on price and discount metrics.
In an age where time is a rare commodity, shopping online provides massive time savings to the consumer. Since 63% of consumers start their shopping journey online, it makes sense to be able to buy where you already are (Thinkwithgoogle, 2018).
No need to head out, shop in-store, wait in line, and then journey back home when you can access a greater product variety at a lower price from the comfort of home.
Top 5 advantages of e-commerce for business
Selling online gives the retailer access to a goldmine of customer data that is just not accessible through brick-and-mortar retailing.
Not only do online consumers typically provide their name, email address, and phone number when checking out or registering on a site, but they also provide a wealth of consumer behavior and demographic data, available through Google Analytics, that can help online retailers optimize the consumer journey and market more effectively and accurately.
E-tailers are also able to nurture and retarget consumers precisely, based on their stage in the journey. For example, using data insights, an online retailer can email potential customers who have abandoned their carts, motivating and reminding them to check out their purchase, and can even use retargeting advertising to nurture leads that have not yet purchased.
Wider customer base
Going online with e-commerce sites makes geographical boundaries become inconsequential. You could sell your products to online shoppers across the country or even across the globe. You’re not limited to shoppers in your physical location.
The internet also opens up your retail store to different niche audiences that you wouldn’t have access to. By using multiple online touchpoints, you can access customers from all angles by going where they already are, such as social media, forums, and Google search.
When you sell online, your business is open 24/7/365. Even though your customer support may be sleeping, automation ensures that the rest of the sales process is always flowing and consumers can buy on any day, at any time.
Easier to scale up
Scaling up or growing a physical store requires more floor space (and the expense that comes with it!), employees, and shelf space. In contrast, it’s very simple to grow an online store, which is one of the less obvious benefits of e-commerce for businesses.
All you need is more inventory, a few digital tweaks, and possibly more storage space, which is far less costly than storefront space. Being online also eliminates the need for opening a new store in another location as you’re already within the reach of a global marketplace.
Online, in-store, or hybrid?
What’s in store for your business in 2020? Based on the advantages of e-commerce to consumers and businesses, as well as the e-commerce statistics, it’s clear that online selling is the way forward. But that’s not to say that physical stores will die out after Coronavirus.
If you’re already online, you’re in a prime position to capture the many consumers that have turned toward online shopping in these uncertain times – make sure to track your profit and expenses so that you can always optimize for profit!
Pro tip: BeProfit – Profit Tracker is the ultimate expense and profit margin calculator Shopify app. If you sell on Shopify, this Shopify profit calculator allows you to effortlessly track and optimize your store’s profits and expenses.
Try BeProfit, the cutting-edge Shopify calculator app, here.
For those of you that are still brick-and-mortar, now’s the time to get your store online, perhaps even using your physical store as an order fulfillment center when foot traffic is low.
can help you grow your e-commerce store by ordering higher quantities of stock in advance and expanding your marketing budget so that you’ll be able to capture as much of your target market online as possible and grow – the demand is already there, you just need to grab their attention!
Disclaimer: The information contained in this article is provided for informational purposes only, should not be construed as legal advice on any subject matter and should not be relied upon as such. The author accepts no responsibility for any consequences whatsoever arising from the use of such information.
E-commerce has been around for a long time. It started with Phil Brandenberger, a man who purchased the first online product – “Ten Summoner’s Tale” studio album from Sting in 1994. Twenty seven years later, in 2021, online commerce took over the market. It is estimated that e-retail sales worldwide will soon grow up to 4,8 trillion dollars. E-commerce is progressing so significantly that it may soon be serving 2.14 billion people.
It simply became an integral part of our life and a significantly more profitable business model than brick-and-mortar stores. This article will show you the most significant of online shopping, from a customer, as well as business point of view.
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Other terms for e-commerce include electronic commerce, internet commerce, or online commerce. It refers to all activities that involve buying or selling goods and services online. Simply, it has the same concept as brick-and-mortar stores, only all the transactions and interactions happen through the internet. You can purchase various products, from clothes or sports equipment to software solutions and other services.
E-commerce does no longer happen mostly on laptops. Nowadays, mobile devices are in the lead. This year, mobile commerce is expected to cover more than half of all online sales activities.
Important note: Don’t confuse e-commerce with e-business, since these two terms are not synonyms. E-commerce includes the transaction of products and services solely, while e-business covers all aspects of internet business operations.
#1 B2C – Business to Consumer: We put this model first since it is the most popular one. In the case of B2C e-commerce, sales happen between business and consumer. For example, if you buy swimwear via Shein, you just made a B2C e-commerce purchase.
#2 B2B – Business to Business: It defines a model where a business is selling either products or services to another business. CloudTalk counts as a B2B e-commerce model since we offer software solutions to other companies.
#3 C2B – Consumer to Business: Simple model. An individual person sells services or products to a company. Here, we can mention freelancers, such as writers, photographers, etc., but, for example, also social media influencers marketing, promoting branded products on their channels.
#4 C2C – Consumer to Consumer: This model refers to one individual person selling a product or service to another individual person through the internet. For example via platforms like eBay or Etsy.
Yet, in this blog, we will be talking solely about the first two models – B2C and B2B.
The Advantages of E-commerce For a Customer
E-commerce ensures customers can find everything needed in one place, without a necessity to even get up from the couch. This is probably one of the greatest advantages of online shopping. Why walk among store shelves and search for products when all you need is a couple of clicks from you?
Here is our selection of the most significant advantages e-commerce brings to customers:
Choose From Wide Range of Goods
E-commerce allows customers to choose a product or service they want, from any supplier, anywhere in the world. You have a much wider choice than in brick-and-mortar stores. And the freedom to browse digital catalogs without any stress or hurry is priceless.
You can also get a big variety of products since there is no space limitation with e-commerce. The traditional store has boundaries that allow it to offer only a limited quantity of goods.
However, e-commerce stores may have their limitations elsewhere. Although you can choose from a much higher number of products online than offline, it does not necessarily mean that the online product is actually in stock. If it isn’t, you have to wait for a few days.
Enjoy Simplicity and Comfort
Customers can buy any product from any e-commerce in the world without having to leave their workplace or home. Due to bad weather, economic and health situations, or any other reason, many people cannot go shopping. A great showcase is a Covid19 pandemic when brick-and-mortar stores were closed for months.
E-commerce is convenient for buying goods or services without creating physical limitations. It requires just a few clicks from the comfort of your home to gain the merchandise.
There is also no need for cash. You may simply fill in credit or debit card details and make an immediate payment.
Products offered over the Internet are generally cheaper than those in the shops. So, you can save your money. Costs incurred by a provider of products or services in cooperation with an intermediary are paid by the customer. When there are no middlemen, the customer may not have to spend that much.
Saving time is one of the major benefits of e-commerce. Customers can order anything you need online, even groceries to cook. E-shops are open 24/7/365, so you can shop at any time. There is no issue with ordering in the evening or even during the night.
The period required to choose, buy, and pay for an online product is 15 minutes or less. Products are often delivered within a maximum of one week, but it can be days or hours, depending on a sort of service. If you order goods that are heavier, the delivery person will bring them to your doorstep.
Get Detailed Information
The Internet is used as the main tool for making e-commerce transactions. It allows customers to search for product information, compare prices and benefits and ultimately evaluate whether it is really worth the money.
There is also warranty information that contains product descriptions and other details. All customers therefore may be fully aware of the conditions before purchasing the product. This way, a change of any dispute regarding guarantees or other matters drops to minimum.
To put it simply, with e-commerce, you can find all the product details online while goods that are physically located in the store may not have this option.
You can also modify their orders online and track the delivery status. If there is any doubt about product handling, you may contact the company, for example through tools like Live Chat.
Advantages of E-commerce For a Business
There are countless of them. From less financial investment to worldwide selling possibilities, e-commerce is a huge deal in the world of business.
Let’s go through the most significant benefits that online sales can bring to your company.
#1 Lower Your Costs
Saving finances is definitely one of the biggest benefits of e-commerce for any business.
When you open a brick-and-mortar store, you may need thousands of dollars. You pay for a space, a rent, maintenance, stock and various services. Not mentioning store signs, inventory, sales equipment, store design, etc. Many times, the costs are so high that it simply doesn’t pay back the money you invested. If you don’t receive enough profit, there is no ROI.
E-commerce stores don’t require any of the above mentioned items. It needs significantly less investment, which makes online sales a great opportunity also for individuals and small scale sellers. If you are just starting with e-commerce, you can use hosted solutions, such as Hubspot, Shopify and Squarespace to create an ecommerce website. All functions are already there, you just need to customize the information. The best ecommerce hosting is reliable, easy to use, and capable of matching your budget.
A lower need for staff members is another benefit of e-commerce that saves money. You can sell by yourself or, if you need help, here comes additional advantage – all your employees can work fully remotely. That makes it easier to find talents, since they can be located wherever.
#2 Use Affordable Marketing
Also, branding is more affordable with e-commerce. Online, your logo can be made by yourself or a professional graphic designer, yet it’s still cheaper than manufacturing an actual physical logo.
You may consider using a QR code in your logo. Quick Response code can store practically any data for example a link to your website.. Simply by scanning the QR code with their smart devices, your customers will be routed wherever you send them.. All you need is to look for the best dynamic QR code generator.
#3 Collect Customer Data Insights
If businesses wish to achieve an exceptional customer experience, they simply need customers’ data. It reveals all their likes, dislikes and needs in order to tailor the best products, services, campaigns, or even exceptional e-commerce customer support.
Online world is a goldmine of data insights that you would never get in brick-and-mortar stores. During purchasing or subscribing to promotional materials, customers provide their name, phone numbers, email addresses, demographic data and more. You may then analyze these data in analytical tools, such as Google Analytics or HubSpot.
This accumulated information can also help with retargeting advertising to attract leads who haven’t purchased yet, or to email potential customers that left your store before purchasing, reminding them that their “shopping card” is full.
Note: Even though e-commerce generates an incredible amount of useful data, you should always act ethically while collecting them. Don’t forget to keep a GDPR in mind. And if you collect sensitive data, do your best to protect it.
#4 Reach New Customers
Even if they don’t always purchase, around 87 % of people start their shopping journey online. They are browsing, reviewing prices, comparing different services and so on. These are all your potential customers.
While brick-and-mortar shops are more or less tight to their location, in case of e-commerce stores, no geographical borders apply, which significantly widens a number of business leads. You can sell to anyone in the world, by a single click on your website. Therefore, it’s crucial to ensure your website is secure by choosing the right hosting solution and using penetration testing services to ensure the same. Hosting helps to ensure your content is secure and reliable when it reaches your customers.
#5 Make It Easy To Scale Up
A huge benefit of e-commerce – an online store never closes. That allows the profit to rise constantly. It also provides an opportunity to reach those who are too busy to shop in normal store opening hours.
Selling online non-stop is simple. Even though your human customer service agents may be sleeping, sales automation assures that your store works 24/7/365. Any day and any time a customer makes a purchase, automation software sends a confirmation email about placing the order.
Disadvantages Of E-commerce
Although it may seem like the ideal way to get what you need, e-commerce also has its disadvantages that can discourage the buyer, such as:
- Impersonal approach: The customer does not communicate with the seller face to face, which may cause doubts or distrust. Some customers are therefore more cautious when buying over the Internet and prefer personal contact. That way, they can talk to the seller, see the goods, touch them or try them on.
- Additional costs: Another disadvantage of online shopping may be that customers often pay for customer shipping or packaging.
- Longer waiting time: As we mentioned, shopping online means waiting. Customers cannot “walk into” the online store and take the product immediately, as it is in the case of brick-and-mortar shops. Waiting time can take days, but it may also be several weeks, if the product is not in stock.
- Uncertainty: If consumers fall into a trap of unreliable sellers, they can get a product that doesn’t match their order or even not receive it at all. Customers may therefore be concerned whether e-commerce is safe.
Just be cautious. If you do business with well-established e-shops and find all information before you make an order, all shortcomings will be eliminated and you will enjoy only the benefits.
E-commerce is the buying and selling of goods or services via the internet, and the transfer of money and data to complete the sales. It’s also known as electronic commerce or internet commerce.
Online selling has changed tremendously since it began; the evolution and history of e-commerce is fascinating – and it’s advancing at an even quicker pace today.
Today, questions about e-commerce usually center around which channels are best to execute business online, but one of the most burning questions is the appropriate spelling of e-commerce. The truth is, there isn’t any one that’s right or wrong, and it usually comes down to preference.
Here’s a few of the variations of how e-commerce is spelled:
(In other words, “what is e-commerce” is far easier to answer than how to spell it, so we may have to agree to disagree on the proper spelling).
How does e-commerce work?
E-commerce, or electronic commerce, is the exchange of goods and services, or the transaction of funds or data, over the internet. This process of buying and selling goods and services online typically consists of the exchange of data or currency to process a transaction involving more than one entity or individual.
The customer places the order via the online store using a web browser; the order details are then relayed to a central backend system – an e-commerce platform, which facilitates or performs several tasks, including:
- Receiving the order
- Updating stock or inventory levels and confirming if there’s sufficient stock
- Processing the payment for the order
- Confirming adequate funds were received to fulfill the order
- Notifying the customer that the order was successfully processed.
- Notifying the shipping department for the order to be shipped to the customer, or access to the service to be granted.
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Most common types of e-commerce businesses and examples of how they work
As commerce continues to evolve, so do the ways that it’s conducted.
Following are the most common types of e-commerce businesses and examples of what they mean
- Business to Consumer (B2C): B2C e-commerce is the most popular e-commerce model. Business to consumer means that the sale is taking place between a business and a consumer, like when you buy something from an online retailer.
- Business to Business (B2B): B2B e-commerce refers to a business selling a good or service to another business, like a manufacturer and wholesaler, or a wholesaler and a retailer. Business to business e-commerce isn’t consumer-facing, and usually involves products like raw materials, software, or products that are combined. Manufacturers also sell directly to retailers via B2B ecommerce.
- Consumer to Consumer (C2C): C2C e-commerce refers to the sale of a good or service to another consumer. Consumer to consumer sales take place on platforms like eBay, Etsy, and Fivver.
- Consumer to Business (C2B): Consumer to business is when an individual sells their services or products to a business organization. C2B encompasses influencers offering exposure, photographers, consultants, freelance writers, etc.
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It’s plainly understood that in order to run an e-commerce business, you must have something to sell. Unlike brick-and-mortar businesses, an ecommerce store can take on a number of forms, where the economic exchange involves a variety of products and services.
Three type of goods you can sell online
- Sale of physical goods The sale of physical goods is the exchange of monetary value for the purchase of goods that are tangible and have physical mass, for example, merchandize. Physical goods include both durable (think: cars, TVs, furniture) and non-durable goods (e.g., food and beverages).
- Sale of digital goods The sale of digital goods involves the exchange of monetary value for purchase of good that are intangible and exist in digital form, such as digital media like audio files, video files, and e-books.
- Sale of services The sale of services involves the exchange of monetary value in return for value to customers that want to achieve specific outcomes. Put another way, a service is a means of delivering value to customers by facilitating specific outcomes that customers expect to achieve. Examples of a service include transportation, healthcare, and education.
What is an e-commerce business
An e-commerce business is a business that exchanges or sell products and services over the internet. Everyone from independent freelancers to small businesses to the largest of corporations can benefit from the ability to sell their goods and services online at scale.
Following are some the most common types of e-commerce business models
Retail e-commerce is the sale of products or services through an online store directly to a consumer without an intermediary. This ecommerce delivery model is also referred to by other terms such as online retail, e-tail, electronic retail, or e-retail
Drop shipping is the sale of products that are manufactured and shipped to consumers via a third party. The key difference from the retail ecommerce delivery model is that the selling party doesn’t stock or own inventory.
These are downloadable items like templates, courses, e-books, software, or media that must be purchased for use. Whether it’s the purchase of software, tools, cloud-based products or digital assets, these represent a large percentage of ecommerce transactions.
The white label business model involves a company selling products with its own branding but manufactured by others. After a customer places an order, the ecommerce company receives the white labeled product, applies their branding and packaging, then delivers the product to the customer.
Wholesaling involves products sold in bulk. Wholesale products are usually sold to a retailer, who then sells the products to consumers.
Private labeling is a suitable approach for companies that may not have upfront capital or don’t have their own manufacturing space to produce goods. Typically, private label ecommerce businesses send their plans to a contracted manufacturer, which manufactures the product. The manufacturer, also referred to as Original Equipment Manufacturer (OEM), may also have the ability to ship directly to a customer or ship directly to the company receiving the order.
These are skills like coaching, writing, and influencer marketing, that are purchased and paid for online.
A popular D2C model, subscription services are recurring purchases of products or services on a regular basis.
Crowdfunding allows sellers to raise startup capital in order to bring their product to the market. Once enough consumers have purchased the item, it’s then created and shipped.
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Top e-commerce companies
E-commerce accounts for trillions of dollars in sales every year.
Today it’s almost inconceivable that a company wouldn’t be using a digital space to drive sales and bottom lines.
Here are some of the top e-commerce companies
- Launched in 1999, the Chinese company Alibaba is by far the world’s most successful e-commerce company and retailer, hosting the largest B2B (Alibaba.com), C2C (Taobao.com), and B2C (Tmall) marketplaces across the globe. Their online profits have surpassed all US retailers combined – including Walmart and Amazon – since 2015.
- Amazon is the largest e-commerce retailer in the US, and has changed the face of retail so much that a burning question for most retailers is how to beat Amazon.
- Once the top retailer in the US, Walmart has focused mightily on their online business, with great results, offering traditional retail sales, as well as grocery delivery and subscription services.
- One of the first e-commerce sites, eBay still dominates the digital market space, allowing for businesses and individuals to sell their products online.
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Advantages and disadvantages of an e-commerce business
Let’s dive into the top benefits of an e-commerce business
- Convenience & accessibility. E-commerce can occur 24/7; for this reason, it provides customers with the best in both convenience and accessibility. They can find what they need, when they need it, and directly from their mobile or desktop devices. This level of convenience and access translates into sales and revenue opportunity round the clock for ecommerce businesses.
- Increased selection of products. Retail brands have the flexibility to offer a wider selection of products through their online store online compared to their physical brick-and-mortar stores. Many retail brands also offer consumers access to exclusive inventory and promotional offers that aren’t available elsewhere.
- Lower start-up cost. Compared to traditional retail stores, pure-play e-commerce businesses can avoid a lot of upfront start-up costs associated with running physical stores such as rent, inventory, and in-store headcount. However, they can have warehouse costs and shipping costs.
- International or cross-border sales opportunities. As long as a customers can place an order online and the e-commerce store can capture the revenue from the sale, then ship the product or service to the customer’s location, online stores aren’t limited by geographic location as brick-and-mortar stores are. An ecommerce store allows your business to reach more customers, globally — maximizing selling potential.
- Easily retarget customers online. E-commerce stores regularly use retargeting as a way to attract and retain existing customers, or acquire new look-a-like customers. With retargeting, you can either target your existing customers, or your most profitable customers with products that are similar to the ones they love, or complement their past purchases. Retargeting is also a strategy used by online stores to recover abandoned carts.
- Scalability with lower operational costs: As the customer base grows, brick-and-mortar retail operations are forced to either relocate to a larger location or expand their physical store footprint, all of which comes with significant costs. In contrast, an e-commerce platform can be equipped to handle high traffic volume and sales spikes, enabling an e-commerce businesses to scale with increased inventory and order fulfillment.
- Delivery personalized experiences. E-commerce businesses can personalize everything from onsite search to dynamic pricing and curated product recommendations. With an AI-powered e-commerce platform, you can upsell, cross-sell, and present products that customers are most likely to be interested in, thereby increasing revenue-per-customer
- Access to new technologies: With progressive enhancements to e-commerce platforms and technologies, you can always find ways to streamline your e-commerce business operations to save time and money. In contrast, there are limitations to what technology can do to streamline physical stores. E-commerce has the upper hand in its ability to leverage technology to streamline operations, market products, improve team collaboration, and provide faster customer service.
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Some of the disadvantages of an e-commerce business in comparison to a brick-and-mortar store include
- Limited interactions with customers. If customers have questions or an issue with a product they purchased, they can visit a physical store and speak directly with a store manager or customer-service rep to address their issue by returning or replacing the product. E-commerce business are can’t provide direct in-person customer service and support. Some e-commerce websites employ online chat or click-to-call features to reach a live person, but it’s not a standard practice.
- No ability to try-and-buy. Visual representation of products on e-commerce stores using images or video cannot deliver the full experience a physical store is able to provide its customers. For example, at a departmental or a footwear store you have the ability to try it and then buy it.
- Lack of instant gratification. With e-commerce, you must wait for the product to be shipped to you. While e-commerce businesses like Amazon have made significant investments to improve last-mile delivery by offering same-day delivery for some of its products, they can’t offer the instant gratification physical stores provide customers.
- Unreliable technology and security breaches. E-commerce businesses are susceptible to website crashes, or websites needing to be taken down, especially in the event of a security breach compromising personal customer data. This leads to loss of sales and revenue while the e-commerce store is down.
- Stiff competition. Due to low barrier to entry and low start-up costs, competitors can easily enter the market selling the same or competing products at lower costs, thereby cutting into your margins and revenue. As a result, e-commerce business must be hyper-diligent in their marketing strategies to remain competitive.
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