A Beginner’s Guide to E-Commerce

Money, money, money
E-commerce is one of those terms that’s become so common that it isn’t always explained very well. We’ve developed our beginners’ guides to offer you a no-fuss, friendly overview that cuts out all the jargon. Today, we’re taking a look at e-commerce.

What is ecommerce?

Ecommerce, sometimes written “e-commerce”, is the term for commercial transactions carried out on electronic systems, such as the internet. Some ecommerce systems are entirely electronic, meaning that pretty much any kind of transaction can count as ecommerce, including direct purchases from businesses, buying from a shopping site like Amazon, booking tickets for an event or a journey, bidding in audctions, and even internet banking.

Some specific areas of e-commerce have even acquired their own names, like “m-commerce”, for ecommerce performed on mobile devices, or “s-commerce”, which focuses on the way social networks can be used for ecommerce transactions.

E-commerce is the fastest growing market in Europe, with sales skyrocketing over the last few years. The Centre for Retail Research has recorded that e-commerce sales in the UK increased from £38.83 billion in 2013 to £44.97 billion in 2014. Just over 17% of those sales, totalling £7.9 billion, were made on mobile devices – an increase of 62% on the year before.

Many organisations will use e-commerce as a virtual shop-front, selling their products and services to their consumers. The 24-hour nature of online shops can allow businesses to reach their users whatever the time of day – and these days, users shop on their mobiles or on their computers at any given time, seeking out the best deal with ease.

 

What are B2B and B2C?

B2B and B2C are abbreviations commonly used to discuss business models. “B2B” stands for “business to business”, meaning transactions that are part of a company’s supply chain or business services. “B2C”, by contrast, means “business to consumer”, where consumers purchase goods for their own use. Businesses that market to consumers will know that people often shop after the working day is done, so it’s advantageous for them to be able to reach people after-hours. Consumer purchasing is what’s driving the e-commerce boom, with people using apps and responsive websites to buy what they want, when they want it, and often doing so on their phones.

Not all e-commerce can be neatly divided into B2B and B2C, though. Auction sites like eBay allow users to list products and sell them to other users – a model that’s sometimes described as “C2C”, “consumer to consumer”. Another good example of C2C is Etsy, where people can sell things that they’ve made or vintage items they’ve collected to other Etsy users.

Some sites have even been described as “C2B”, “consumer to business”, where a consumer posts a product with a defined budget, and service providers bid to complete the project. Many freelancing sites have a C2B marketing option.

 

What do ecommerce systems involve?

Ecommerce systems can be more complicated than they appear at first. Every e-commerce platform needs a good product navigation system and a secure payment portal, which will require shopping cart software. Businesses also need to keep their stock levels updated, a system of order confirmations, and a way to physically ship orders to the customers.

Shopping cart software is what allows site visitors to collect the goods and services that they want to buy, but it’s also a bit more than an invisible version of a shopping trolley. It’s how website owners can process transactions when users provide payment information, and control shipping options for any physical products that the user has bought.

With software taking care of all the details, the advantages of e-commerce solutions outweigh the drawbacks. An e-commerce platform can also generate lots of marketing ideas – online shops work well with AdWords and other PPC options, which produce high-converting campaigns that enhance the reach of an online business. Social networks like Instagram, Pinterest and Twitter can also give enormous reach to a business looking to market individual products to interested consumers.

Nicola Lewis
Business Development Manager
Date Posted
15th July 2016
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