Updated: Apr 3, 2022
Before we dive deep into defining eCommerce and looking at its benefits, you may want to take a look at the Statistics on eCommerce in the United States from 2017 to 2024
In 2019, U.S. online retail sales of physical goods amounted to 343.15 billion US dollars and are projected to reach close to 476.5 billion US dollars in 2024
Apparel and accessories retail e-commerce in the U.S. is projected to generate 153.6 billion U.S. dollars in revenue by 2024.
Now, that is only the United States, but that is not all, more eCommerce statistics worldwide show that the growth is expected to remain steady for the next few years and growing even faster especially from emerging markets in Asia.
Additionally, you can also look at the History of eCommerce to get an even broader picture of the timeline for the development of e-commerce.
What is E-Commerce?
E-commerce, also known as electronic commerce refers to the activity of buying and selling goods or services using the internet.
Online Transaction processing and technologies such as mobile commerce and EFT (Electronic funds transfer) are used, which is basically the transfer of funds from one bank to another without the direct intervention of the bank.
Just like the traditional advertising of passing around brochures and Radio advertising, electronic Commerce uses Online Marketing also known as Internet advertising which is a form of marketing and advertising that uses the Internet to deliver promotional marketing messages to consumers.
Because many consumers find online advertising disruptive, ad blocking has increased which creates alternative marketing tactics such as e-mail marketing.
What are the Benefits of E-commerce?
Now, if you review the Global eCommerce statistics, you know that means huge potential and a massive opportunity for anyone wanting to start an eCommerce business. But one might ask, besides all that, what are the core benefits of getting my business online?
Advantages of an Online Store include;
With an online business, you are not limited to a physical geographical location as it is for a local store. Going from a local customer base to a global market at no additional cost is one of the greatest advantages eCommerce offers. E-commerce opens up the whole world as a market for your products or services.
Faster Payment/ Transactions.
Ever found yourself waiting in line or pushing through crowds just to buy something? Well, that never happens on the internet, which means you shop from home and get the products you want and need without stressing yourself and being constrained by the hustle usually experienced in a traditional brick-and-mortar store.
Open for Shopping 24/7/365
Another great benefit of an online business is that it is always open. If you own an eCommerce business, this means a dramatic increase in sales opportunities and convenience for your buyers. Buyers get to enjoy unrestricted working hours, therefore, getting products and booking the services they need without being constrained by the operating hours of a traditional brick-and-mortar store.
Besides the startup costs like purchasing a domain name and your website hosting, there is no rent or staff to hire and pay, and very little fixed operating costs. For example, websites such as Bluehost, Wix, and HostGator offer free domains if you purchase a yearly plan for website hosting from as low as €2.28 per month.
Automated Inventory management
With electronic commerce, order fulfillment, delivery, and payment procedures can be accelerated and inventory management automated with the various electronic online tools and third-party vendors such as PayPal, Stripe, Google Checkout, and Amazon Payments among others. Inventory management has become even more sophisticated as you can manage your inventory on multiple platforms like eBay or Amazon.
Personalized experiences/Targeted marketing
Now more than ever, Online business owners can collect very powerful consumer data to ensure their marketing targets the right people with the products. Tools like Google Analytics and the Facebook pixel, help you as an eCommerce business owner to get this data which you can use to re-market or retarget the most likely to buy visitors via Facebook Advertising or Google Ads.
If you want to learn how to create a Facebook Pixel to start tracking customers and collecting relevant data, watch this video.
Work from anywhere
With an eCommerce website, all you need is a laptop and an internet connection, log in to your inventory management platform and start fulfilling orders and managing your business on the go. This is not restricted to location, in fact, some platforms like Amazon or Shopify have their own mobile apps that allow you to fulfill orders right from your smartphone or tablet.
What are the Disadvantages of E-commerce?
Everything has its pros and cons, and so let’s now look at the disadvantages of an online store or e-commerce website.
One of the biggest issues with an online store is trust. Trust on the internet space may come in different forms but first, you need to ask yourself, do people trust the company or brand you represent? Do they trust the quality of the products you offer if you are selling physical products, and most importantly the payment method, buyers want to know that their information is secure especially if they are purchasing using Credit/Debit cards.
A review system such as Trustpilot and a secure payment solution like PayPal would be some of the few ways to go around that.
Well, you just contact the support team of whatever platform you are using to host your website. Wix, Shopify or BigCommerce have dedicated services to help you out if these issues arise.
Limited interaction with Customers
With an online store, your customers don’t have to see you and you don’t need to see them for a successful online transaction to take place. This makes it difficult to collect first-hand customer concerns and data even though there are other ways to get this data for example through surveys.
No ability to try-on or Test the products
So far, we have looked at mostly the disadvantages of eCommerce for business owners. For customers, it means they can’t try on the products or test the products before they can make the purchase. However, some websites offering software or services have trials for a specific period of time.
What can you sell with an E-commerce Website?
Now that you know a little bit about eCommerce and why you need to have an online business, let’s go ahead and look at what you can sell on your eCommerce website. You can call these the different types of eCommerce businesses.
1. Physical Goods
Whatever you sell physically right now, anything that can be physically touched, acquired to satisfy consumer needs and desires, you could sell online. These could be things like furniture, merchandise, apparel, or books that you would usually sell and ship to customers. If you sell physical products you’ll need to add at least one shipping option to your store.
2. Digital Goods
You can call these e-goods, they are intangible goods which means you can’t touch these because they exist in digital form via the internet. These are things such as downloadable music like iTunes, internet radio, internet television for example NetFlix, e-books like Tai’s MentorBox, and Amazon’s Audible offers, even simple guides.
These types of products also include things like online courses like LinkedLearning offers, software like Adobe offers, or even graphics templates to use on a website or social media like Canva offers.
Digital products might also come in the form of guides or eBooks.
When you look at the definition of a Service, it’s simply doing work for someone. A service is a transaction in which no physical goods are transferred. Service-based websites may include Fiverr, Freelancer or Upwork for Freelancers that are compensated for their time or work done.
You don’t have products to sell? No problem. Dropshipping allows you to sell what you don’t own/have. With dropshipping, you simply source the products from a supplier or manufacturer and list these products on your selling platform, when customers buy these products, your supplier will help you fulfill the orders.
Types of E-commerce Models (eCommerce business Categories)
1. B2C (Business to Consumer)
This is the most common eCommerce model, it represents a transaction between businesses and consumers (individuals in the general community). Examples include Nike among other B2C businesses.
2. B2B (Business to Business)
In this e-commerce model, one business provides the other with products and/or services. For example, Neil Patel’s Crazy Egg online software helps other businesses track visitor actions and the Ubbersuggest analytics tool helps other companies that want to increase their website traffic. In simple terms, with the B2B e-commerce model, both parties involved are businesses.
3. C2B (Consumer To Business)
This could be you selling your expertise to a business or organization. For example, if you are a photographer or a freelance logo designer. Examples of this eCommerce model include freelance platforms like Fiverr where individuals create value for businesses and get paid hourly or per project.
4. C2C (Consumer To Consumer)
When you sell your own goods or services to someone else, let’s say you are selling your old furniture or used laptop on Amazon or eBay, this eCommerce model is called Consumer to Consumer.
Of course, there are other eCommerce Models like B2G (Business to Government), C2G (Consumer to Government), or G2B (Government to Business) just in case you want to get a better picture.
However, the most common categories will be the B2C, C2B, B2B, and C2C eCommerce models.
Where can I sell my products/services? E-commerce Marketplaces to Consider
So far, we have looked at the different benefits of selling your products or services online, and we have also looked at the different types of products you could be selling on the internet. But where can you sell these products and services and how?
We looked at the top 10 e-commerce platforms that allow you to build and customize your online store and to manage your e-commerce website, sales, and other e-commerce operations from a central hub like Wix.
If you want a detailed review of the top e-commerce store builders, make sure to check out the Top 10 Website Builders.
By the way, if you want to create your online store using Wix, watch this.
Selling only using your website/online store limits your sales opportunities and it would be a great idea looking into marketplaces. Adding to the top 10 list are Dropshipping websites like AliDropship and other e-commerce marketplaces to help you leverage the wide audience available to you.
Statistics show that Amazon is the largest e-commerce seller in the United States. With over €70000 spent on Amazon every minute around the world, it’s crucial to add your product listing on Amazon. This is one of the biggest online marketplaces in the world. Here is a detailed guide to listing your products on Amazon.
In 2019, eBay had around 182 Million active users and over 1.3 billion product listings. Allowing users to hold online auctions, eBay helps small and medium-sized businesses establish an international customer base.
In 2019, Alibaba dominated the Chinese market with over 900 million active users. A marketplace for manufacturers, buyers, wholesalers, suppliers, importers, and exporters. Alibaba allows you access to countless suppliers who sell pretty much any product you would imagine.
Keeping in mind that Alibaba powers other online stores such as Alimama, you can learn more about Alibaba statistics here.
Over 60 million items were listed on Etsy in 2019. Etsy is an e-commerce website focused on handmade or vintage items and craft supplies. An online marketplace that’s made for Artists and other individuals with handmade items under a wide range of categories, including jewelry, bags, clothing, home décor, and furniture, toys, art, and paintings, as well as craft supplies and tools.
Unlike the above-mentioned marketplaces, Fiverr is an online marketplace for freelance services. A platform for freelancers to offer services to consumers/businesses/organizations worldwide. Fiverr reached a revenue of over €20 million in 2019.
Whether you are looking for a remote worker/virtual assistant or looking to make money on the internet leveraging your skills, you can use Fiverr for all kinds of services including Graphics & Design, Digital Marketing, Writing & Translation, Music & Audio Production, Video & 3D Animation among other services.
An alternative to Fiverr would be Upwork or Freelancer, while other e-commerce marketplaces and retailers include Taobao, Flipkart, Walmart, Newegg for computer hardware, and consumer electronics, and online course creation software and launching platforms like Teachable or Udemy.
A quick guide to getting started with your Online Business
The eCommerce Ceo breaks down everything you need to set up an online business here.
Another great article by Entrepreneur breaks down the process into 3 simple but very powerful steps.
This is the most important part. You start your online business by first of all deciding whether your business idea is suited for the web, what resources your business will need, your target audience, and your forecasted revenue.
2. Developing a Marketing Strategy
Now, I have already said that planning is the most important. So, I can’t say a marketing strategy is the most important one but I can say it is as important as your planning. Here you decide on how you will be making a profit and pushing your products to your audience, things like Social media marketing, e-mail marketing, organic traffic methods like search engine marketing and paid ads like Facebook Ads or Google Ads are your options.
3. Understanding your Technology needs
In a nutshell, you need space on the internet to sell your products or services, first, you need a domain name, then hosting for your website and a platform to help you design your e-commerce website also known as your virtual shopping cart. For domain names check out Namecheap and for hosting, you can look at Bluehost, Wix, HostGator, or GoDaddy.
Conclusion (Put your knowledge to work)
Alright, now that you know what e-commerce is, the benefits of getting your business online with your own e-commerce store, whether you are a merchant or seller, and some examples of the products and services you could sell online, plus where you would typically sell your products or services online and a quick guide to getting started.
It’s time for you to take massive action.
Wherever you are in your eCommerce journey, I hope this helps you learn more about the different e-commerce marketplaces and platforms to help you get started. If you’re just starting out and need help picking a platform make sure to read the top 10 eCommerce store builders. Already running an online business? Check out the different marketplaces to help you extend your products to an even wider audience and increase your sales.