Convenience is the catchword for the 21st-century consumer and technology has caught on to this demand. E-commerce is a quickly growing mode of conducting business and it addresses a number of pain points for customers as well as business owners, namely, the customers who want to shop without leaving their homes and businesses looking to operate without paying rent for a physical store.
The basics of e-commerce
Some predict that e-commerce will eventually replace traditional brick and mortar stores while others insist that e-commerce is still mired in serious limitations to be able to do that in the foreseeable future.
Broadly defined as an exchange of goods for money over the internet, E-commerce, or electronic commerce, is changing the face of business. It’s intuitive ease of use and innovative approach to conducting business are some of the reasons e-commerce sales are projected to hit $27 trillion in 2020.
Online platforms have propped up, giving solutions to businesses and individuals to set up their own online shops. These platforms are quickly redefining what a “marketplace” means by bringing a host of retailers and businesses on to one platform also known as an online marketplace. Some online marketplaces choose to host similar businesses to have a thematic marketplace. Amazon is the prime example of an online e-commerce marketplace. Etsy is also a great example of a niche online marketplace. On Etsy are thousands of vendors with their own shops selling a wide variety of unique, artsy items. Such platforms have gained popularity within a wide range of customers thanks to the “all under one roof” concept.
On the other hand, traditional brick and mortar businesses have embraced and extended their services to be available online. Walmart, Target, RadioShack, and many more are prime examples of this.
If you’re looking to get into this industry, here’s some great ecommerce business ideas.
E-commerce based businesses exist in three general business models:
Businesses serving businesses (B2B)
This business set up allows a business to target and sells its products to other businesses. This is generally in bulk orders and with significant discounts. Alibaba is an example of a B2B business.
Businesses serving customers (B2C)
B2C businesses dispense their goods directly to customers, with no middle man. Walmart’s online store is a B2C business.
Consumers serving consumers (C2C)
C2C businesses seek to sell goods between individuals. With e-commerce, C2C businesses have benefited the most. Online marketplaces have enabled individual vendors to connect directly to customers across the globe. The individual consulting industry is one example of a C2C and having the ability to tap into a global market has led to a significant growth rate over the past decade in that market.
Why e-commerce works for businesses
Having an online store eliminates the need for having a physical store, and for many businesses, this is a significant cut in expenditures. Lower expenditures, higher margins, and higher profits are great for business, and many businesses have found e-commerce to be the solution.
Not only does a business shed expenses, but it also gains customers. The unbound nature of the internet allows marketing to reach and serve a wider audience across borders. Having more customers increase sales volumes and eventually, profits.
Why e-commerce works for consumers
A consumer today demands convenience and businesses that best meet that make their products and services available on demand. E-commerce has enabled 24/7 online shopping to be possible and innovations in shipping and logistics are shortening delivery times. The ease of access to products and services empower the consumer to do more with their time.