How To Start Ecommerce Business – In this article, let’s discuss everything you need to know to start an ecommerce business. What is eCommerce? How do I start my own ecommerce business? What platforms are there? You will also learn the latest trends and tips to survive in the current e-commerce era.
E-commerce, also known as internet commerce or electronic commerce, is defined as the activity of buying and selling products or services over the internet. In principle, every type of commercial transaction is initiated online. These transactions involve the transfer of data and money.
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While e-commerce is about the transaction of services and goods, e-commerce is often confused with e-business or e-commerce business. There is one small difference. While e-commerce is all about trading goods and services, the e-commerce business model deals with all aspects of running an online business, which includes selling:
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Any business that has an online presence and fits into one or more of the above categories. It gives you an idea of what kind of service/product you are offering to your customer.
Physical Goods – If you sell and deliver real, tangible products to your customers that they can touch and feel once they receive your product, it is a physical good. For example a water bottle, baby toys etc.
Digital Products – A digital product, on the other hand, is not an actual physical product. When your customer buys a digital product from you, they generally don’t receive packages from you. However, you can download the digital file you sell.
Services – Online businesses can provide personal or digital services to customers. These include providing training services, computer repair services, or interior design services. Any e-commerce business model that offers services rather than products falls into this category. These services can vary from days to years depending on the industry.
How To Start An Ecommerce Business
Did you know that ecommerce businesses can make money from affiliate marketing? The money earned in this way is known as a commission, which is earned through affiliate links that accept to pay them from the money they make from a sale.
Affiliate marketing is a popular way to increase sales and generate online revenue. It is a win-win solution for both the company and its affiliate partner.
Electronic Funds Transfer (EFT) and Electronic Data Interchange (EDI) were the only sources for users to initiate transactions and exchange business data online. The history of e-commerce dates back to 1969 when CompuServe, the first major e-commerce company founded by Jeffrey Wilkins and Dr. John R. Goltz was founded. This company was set up with a dial-up connection. However, e-commerce explored its full length after 1991, when the internet was available for commercial use.
E-commerce business growth has skyrocketed lately, with the apparel and beauty segments in particular consistently posting double-digit growth rates. This trend will not slow down. As the statistics below show, the global e-commerce industry continues to thrive at a steady pace, supported by multiple factors including affordability, rising consumer affluence and improving infrastructure. Nowadays going global is not a strategy but a necessity to be successful.
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As mentioned earlier, the e-commerce industry is set to accelerate rapidly in the coming years. Here is the proof –
China has the largest e-commerce market in the world. With countries like China and India leading the way, Asia has the largest share of the global e-commerce sector at around $831 billion, followed by North America and Europe at $552 billion and $346 billion respectively (Shopify) .
As we jump into the next decade, businesses will embrace new changes and prepare for the latest e-commerce trends in the business landscape. As digitization sweeps every corner of the world, brands and sellers need to be agile and adaptable to thrive online.
In this day and age, e-commerce business is changing the traditional shopping experience to a great extent. The line between physical and digital commerce is blurring. Today, customers, companies and countries are connected for business, education, work and entertainment. E-commerce has become a part of everyday life. But why is this happening? And how has e-commerce gained traction lately?
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It turns out that running an ecommerce store is less expensive than traditional stores. Unlike brick and mortar stores, you don’t have to worry about maintaining your traditional stores. Necessities such as electricity and other utility bills, store rent, equipment and room decoration are eliminated in an e-commerce store. On the other hand, you need a website and database to run your ecommerce business, which are easy to manage with little capital.
Print media and television advertising are ineffective and notoriously expensive compared to online media. Selling where your customers are is the new trend. With the number of online users increasing every day, online advertising has proven to be an effective way to sell and market your products and services. In addition, the ROI of online advertising is definitely higher than traditional advertising. Plus, it’s easy to track and align your ad spend with your goals and PPC budget.
Today you/your company can exist in one country and sell your products through an e-commerce website in another country.
If you want your business to reach a wider audience, the online route is the right choice. Of course, selling online is no longer viewed as a business strategy, but rather as a necessity for businesses. Also, at some point you want to expand your business. There are several factors to consider when opening a brick-and-mortar store, such as: B. your store location, customer reach, inventory placement, etc. On the other hand, an ecommerce website will serve multiple market segments and increase your sales. This reduces significant costs. All you have to do is come up with a concrete marketing plan to increase the reach of your product/service.
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With the wholesale and warehousing model, you buy items in bulk and store them in your warehouse. In this model, companies/entrepreneurs sell products in bulk. Generally, B2B companies use this model. The basic benefit of this wholesale model is that you get products at a cheaper price because you buy them in bulk. Also, your profit margins are high in this case.
In the drop shipping model, you sell items that are made, fulfilled, and shipped by other sellers or companies. In this case, you are establishing a relationship with a wholesaler or retailer who stocks items that can sell products of your choice. You place these products on your ecommerce business website and sell them online while your wholesaler or retailer takes care of the order fulfillment.
With white labeling, you are not making the product you are selling. However, you do get a licensed contractor that allows the product to be sold under your brand. In this case, import the products. You must control the shipping and fulfillment process. You also need to track and maintain the quality of the product, which in this case can be difficult. While it’s extra work, you reap the benefits of higher profit margins.
The e-commerce subscription model allows a business to (usually) provide periodic services to the end user in exchange for periodic payments or fees. This model is not new. Companies involved in fashion, food and entertainment are introducing subscription models into their operations.
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All kinds of eCommerce business models are thriving in modern times. We are excited to see how fast the e-commerce industry is developing. But you need to know the basics to get more profits from it.
Careful research into available business models and products will give you the knowledge you need about the eCommerce industry. Before diving further, familiarize yourself with the popular ecommerce business models in the market and identify the appropriate model that suits your business and products.
In a B2B eCommerce model, your company sells products/services to another company. You will find software companies, suppliers or manufacturers that sell products to resellers, office and school vendors that sell to schools and institutions that fall into this category.
Stable Environment – Compared to other ecommerce business strategies, B2B ecommerce models are more stable. A successful B2B company will grow steadily and take on a variety of market scenarios. In this way, B2B becomes more successful and can expand its online presence and opportunities.
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Better Selling – Collaborative approach to customers will increase customer loyalty. These models work with an improved and robust supply chain that makes it easy to showcase the product portfolio and uncover upselling and cross-selling opportunities. This in turn will boost overall sales of the product.
Low Cost – These online B2B models have organized structures. With most of these models, the work is automated, resulting in fewer functional and operational errors, which in turn reduces management costs.
Data-centric process – Thanks to Industry 4.0, most companies today use automation in their processes. The processes are based on factual data and follow an integrated data-driven approach.
B2C eCommerce business models sell to their end user who is a customer. This is the most widespread business model in the e-commerce space. A B2C model can involve selling products and
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