Definition of E Commerce and Introduction to E Commerce

This definition of e commerce and introduction to e commerce will help you learn about its history, challenges and benefits. It also presents several helpful hints.

Definition of E Commerce

First, let's look at the definition of e commerce. It is a term used for the practice of using electronic commerce to buy, advertise or sell products or services over the Internet. A couple of other names for e commerce are “web commerce” and “online commerce.”

A while back, e commerce referred to any type of business conducted over the Internet. The meaning of the phrase has changed though, and now it means selling an actual product (hard goods) online. This is different from selling a service, such as article writing.

Some Examples of E Commerce

This list will show you some products and services—all considered to be a part of e commerce.

Online Goods and Services

  • Ebooks
  • Software

Retail services

  • Ordering flowers, food or clothes

Marketplace Services

  • Auctions
  • Online wallet (“An online wallet is a program or web service that allows users to store and control their online shopping information, like logins, passwords, shipping address and credit card details, in one central place.” Wikipedia)
  • Advertising

More on Definition of E Commerce and Introduction to E Commerce– Its History

Ecommerce began in 1994 when a man named Jeff Bezos started, selling things out of his garage. Ever since, more and more businesses have attained a reputation online—companies like eBay and Target.

Across the world there are around 8 million people who shop online. A study has shown that by 2011, profits from online retail sales will pass a quarter of a trillion dollars! So, you can see how important e commerce is to the lives of many people.

Most average business sites do not have the features that an e commerce site must have…such as a shopping car and credit card processing, as well as the ability to stock and ship products. Of course, businesses that source through a drop shipper don’t have to worry about warehousing and shipping.

Introduction to and Definition of E Commerce: Its Challenges

The challenges of doing e commerce are much different than the challenges of owning a brick-and-mortar store. What are some of these challenges?

Shopping Carts and Payment Processing

If you are going to sell products online, you must have shopping cart software that will allow your customers to browse your products. You must also have the ability to accept various payment methods and calculate shipping. EBay, Yahooo Small Business, and osCommerce are a few platforms that can help with this.

Just like in an offline store, your customers must have multiple options for payment. Check out PayPal, Intuit Merchant Services and for this service.

What about shipping? Shipping and handling returns can take up a lot of your valuable time, if it’s not handled efficiently. If your shipping is inefficient, it will be necessary to charge higher shipping costs. And this will add to you customers’ overall cost, which will make them less likely to purchase from you. Many online store owners use shipping services such as USPS and UPS or FedEx to help with this process.

Introduction to and Definition of E Commerce: Its Benefits

Starting an e commerce store has benefits to you, the merchant, and to your customers. Some of the biggest benefits are cheaper products and setting up and maintaining your online store—all done more easily than you can with a brick-and-mortar store. To conclude our introduction to and definition of e commerce, let's look at its benefits.

24 Hours a Day, 7 Days a Week

With an e commerce website, you can serve your customers 24/7! They can order any time of day or night. Want to sleep in? Go on a vacation?

No problem! Your customers can keep shopping and ordering, even when you’re not there.

Opportunities to Create Relationships

E commerce opens the door to new opportunities for relationships with your customers, both new and old. When your business is online, it is accessible to customers the world over; so there are many new opportunities for new relationships. You would not have most of these customers if your business wasn’t online.

Increase in Sales

Starting an e commerce site is a great way to increase the sales for your brick-and-mortar store. Many store owners don’t think of how much their business could increase if they attain an online presence. It just doesn’t occur to them! However, it is a great way to increase sales at your offline store.

Brand Awareness

The ability to reach millions of potential customers all over the world will increase knowledge of your product line. You can get people talking about your products, which is free, word-of-mouth advertising!

Expands Your Customer Base

As we mentioned briefly, having an e commerce business means that you can get customers from all over the world. There are almost no limits as to who you can sell to, and where. Offline stores are limited to getting customers locally. But e commerce removes these restrictions! At the very least, target Canada, the UK and Australia as well as the USA.

Builds Customer Loyalty

With an e commerce store, it’s simple to show off your goods to customers in a unique way. If your store is easy to access and shop with, you will have loyal, lifetime customers.

Promotion is Easy!

It’s easy to deliver information to your customers over the Internet! Make your promotions, data, and information easily accessible. Of course, you’ll want to put a lot of this information in a newsletter that you send to your customers on a regular basis.

Decreases Your Expenses

Going online can decrease your costs, too. If your business is online, you won’t need much staff (if any!) Plus, there’s no real location necessary, so you won’t have to pay for rent or maintenance.

Increases Your Earnings

If you have a brick-and-mortar store already, opening an e commerce site can be a big pick-me-up for your business. It’s important to increase your profits, and going the e commerce route can be a big help. More sales = More profits = Bigger budget for your business.

Smaller Target Group

While your customer base can extend well beyond your local area using e commerce, it’s also easy to tighten your niche. Online, you have more control over who your business targets. You can target young couples, singles, teens, seniors, men, women, or a specific ethnic group. This type of targeting is done by using keywords that are popular to the demographic you are trying to reach.

E commerce won’t only benefit your customers—you’ll benefit too! It’s easy to update your site, compared to organizing and updating a physical store. E commerce will save you and your customers time and money.

Hopefully this definition of e commerce and introduction to e commerce answered your questions.

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