eCommerce, or electronic commerce, is an act of buying and selling various goods and services over the Internet. Apart from allowing you to make some money online, having an online store also enables you to serve your customers around the clock in a global market. This helps solve the geographical limitations of most brick-and-mortar stores, lets you tap into international markets, and increases your revenues. Beyond these, eCommerce stores have a lot of benefits compared to traditional offline stores, including lower investment rates and infrastructural costs. 

If you want to learn what is eCommerce more comprehensively, this blog is meant for you! We will offer you insights into this business model’s features, how it functions, and the pros and cons of online stores. We will also help you understand what to sell online. Continue reading to learn more! 

What is eCommerce?

eCommerce refers to an act of buying and selling goods or services through the medium of an online platform. You can carry out the process either through a smartphone app, online store, social media platform, or an online marketplace like eBay. If done right, eCommerce businesses can be highly profitable. However, you must know what to sell online, which platform to host your eCommerce website, and how to market yourself to build a lucrative business. 

The best part about operating an eCommerce store is that you can sell your products and services from anywhere and to anyone in the world. All you need is a stable internet connection, a good website setup, and some basic marketing and management tools. A few common examples of eCommerce models include online auctions, shopping apps, and consultation services. An online business aims to drive remote sales using different digital marketing strategies, including email marketing and social media advertisements. 

How Does eCommerce Work?

An eCommerce store works similarly to a physical store. You have to build a store, in this case, through a website or a marketplace, display your product and service catalog, receive orders and corresponding payments, and process and deliver the purchased goods to their respective owners. An online retailer delivers the order via shipping, store pickup, or local delivery after a customer purchases from an online store. Sometimes, the retailer may deliver the order digitally, too, for products like virtual courses, PDFs, or online consultations.

eCommerce transactions happen across several devices and platforms through different payment methods. You can even integrate third-party apps or support when it comes to logistics, advertising, payment processing, and website creation. Moreover, just like a brick-and-mortar store, you have to manage your products and inventory, organize orders, hire employees for larger projects, and other essential business functions. 

Types of eCommerce Businesses 

You will find different types of eCommerce businesses in the current world. These diverse models of online businesses are defined by who you are and who you are selling to. The most common ones include:

1. Business to Consumer (B2C)

A business that sells various products or services to an individual consumer. For example, a footwear store sells pairs of shoes to its customers directly.

2. Business to Business (B2B)

A business is one that sells various goods or services to another business in a different or the same sector. For example, a software company sells licenses for its respective technology to a small business.

3. Consumer to Consumer (C2C)

An individual who sells their respective products or services to another individual customer. For example, a person sells a sofa to another person on a buy-and-sell marketplace. 

4. Consumer to Business (C2B)

Individuals sell their products or services to any organization or business. For example, a company pays an independent influencer to promote a specific brand on social media.

5. Subscription-based Business 

This is a relatively new form of business where businesses may offer a recurring monthly or yearly delivery of curated products. It could be a physical product or a continuous digital service. For example, a website hosting company has a recurring charge for hosting a website, or a book company sends you a box of curated books every month.  

6. Hybrid Model

This eCommerce business model combines one or more models to generate a new value, cater to a variety of markets, and have diversified income sources. For instance, some online marketplaces may cater to both businesses and consumers. 

Top eCommerce Revenue Models

Deciding the type of eCommerce business you want is not enough. You must also decide how that particular business will make money. As of now, there are at least six different revenue models used by businesses that sell online. 

1. Sales Model: This is the most common model that online brands and physical stores alike use for their operations. It involves selling different products and services for profit.
2. Subscription Model: This particular model relies on recurring revenue from subscriptions to various products or services. It has grown in popularity among all kinds of consumers and eCommerce DTC brands. 
3. Freemium Model: This model provides a limited range of services for free, and any upgrade in the features or functionality requires a subscription fee. It helps consumers decide whether to continue using a particular service or not. 
4. Advertising Model: This model is mostly used by online creators and influencers who grow personal brands thanks to advertising deals (promoted content) with other businesses.
5. Affiliate Model: Affiliate programs are also popular among creators who have large fan followings. However, these people may or may not sell their own products. They often earn commissions when a customer buys a particular product from the affiliated link.
6. Transaction Fee Model: This particular model applies to eCommerce companies that often process financial transactions. They even earn revenue by charging a specific fee on each sale.

What to Sell Online?

Selling things on eCommerce is not everyone’s cup of tea. Several businesses fail online because they can not accurately grasp which products will sell and to whom to market those products. However, you can virtually sell anything online, although a higher profit margin is available for niche products with a demand. Here is a short list of some of the best products you can sell online. 

1. Electronic goods
2. Scented Candles
3. Clothing and Accessories
4. Smart Watch
5. Custom Art
6. Books
7. Food Products
8. Curated Coffee Subscription
9. Sports Gear 
10. Lifestyle Products
11. Skin Care
12. Make Up Products
13. Phone Lenses
14. Laptop Accessories
15. Posture Corrector
16. Flexible Garden Hose
17. Pet Apparel And Products
18. Breathable Mesh Running Shoes 
19. Baby Products 
20. Crotchet Or Knitting Kits
21. Touchscreen Gloves 
22. Hiking And Camping Gear 
23. Massagers
24. Laser Hair Removal Machines
25. Portable Car Vacuum
26. Foreign Products 
27. Online Courses
28. Softwares 
29. Productivity Applications
30. Gaming Apps and Gear

Advantages of an eCommerce Business

Online stores offer several advantages that any traditional physical store cannot match. Some of these include:

1. Round-the-Clock Shopping Experience

An online store does not have the constraints of time and location. It offers customers the flexibility to shop whenever and from wherever they usually choose. This 24/7 accessibility makes the online store always open for business and caters to customers’ needs.

2. Expanding Your Reach Beyond Borders

An eCommerce business enables you to extend your business beyond local boundaries and reach your customers worldwide. This expansion widens your market and diversifies your clientele. Ultimately, it opens up opportunities in new regions and among different demographics.

3. Streamlined Operational Costs

Transitioning to an online model can lower your business’s operational expenses significantly. It means you can save on rent, utilities, and in-person staff without the physical limitations of a brick-and-mortar storefront. Therefore, you can also offer more competitive prices to improve your profit margins.

4. Facilitating Price Transparency and Comparisons

Customers can compare prices and products across different platforms in an online marketplace. They can make informed decisions without physically visiting multiple stores. This transparency is beneficial for both businesses and consumers, as it encourages fair pricing.

Disadvantages of an eCommerce Business

Along with the basics of what is eCommerce, it is also necessary to understand its potential setbacks. Some of the challenges with an eCommerce store include: 

1. Delayed Customer Connection

Providing immediate help and advice to customers becomes more challenging without the face-to-face interactions of a brick-and-mortar store. This can further influence customer satisfaction because the buyers are not able to get quick answers to the queries that they usually get in a physical store.

2. Delivery Wait Times

The excitement of a purchase can be dampened by the waiting time for the product to arrive through shipping. This may take anywhere from a few days to a few weeks, which often depends on where your customers are and what they have ordered.

3. Additional Shipping Costs

Shipping fees can be a deal-breaker for numerous customers, especially for more affordable items or international deliveries. These added costs can make online shopping through eCommerce platforms less appealing to some consumers. 

4. Customer Data Safety Challenges

Customers often trust you with their personal and financial details when purchasing from an online business. This makes data security crucial in eCommerce. However, the risk of data breaches and online fraud is a significant concern in this sector, and continuous efforts are required to protect your store and maintain your customers’ trust. 

How to Launch Your eCommerce Business 

Now that we know the basics of eCommerce, we will look at the procedure for creating one. Launching your own business has become easier and cost-effective in present times. Here’s a detailed rundown on the steps to help you get started with your online store:

Step 1: Define Your Niche

The first step to creating your eCommerce business is to identify your niche. This involves understanding your target market and what to sell online. Identifying a profitable sector, understanding the market demand, and setting clear business objectives are important for the success of your business. Furthermore, conduct a competitive analysis to understand the landscape in which you will operate your business. You must also analyze to do intensive marketing research by determining who your competitors are, what they sell, and to whom. 

Step 2: Choose The Right eCommerce Platform

Compare different digital platforms and also consider your growth plans for the future. Make sure that the platform you choose can grow with your business by allowing higher traffic and offering advanced functionalities.

An ideal eCommerce website builder offers robust tools for store management, a user-friendly interface, scalable features, and a secure infrastructure. 

Step 3: Set Up Your Online Store

Analyze the user interface (UI) and user experience (UX) design of your store. This can help you boost your conversion rates by making it easier for customers to find what they want and complete their respective purchases. Setting up your online store can be intuitive and straightforward if you find the correct website builder for your needs. All you need to do is choose from various customizable and mobile-friendly eCommerce website templates based on different industries and needs. 

Step 4: Implement Effective Selling Strategies

Start driving traffic to your store and getting sales once your eCommerce website is ready. Identify your target audience and understand their buying behavior and preferences. This particular knowledge will enable you to customize your marketing efforts and product offerings to meet their specific needs.

Furthermore, different social media platforms and email marketing can be used to connect with potential customers. Make sure to offer them some valuable content that engages and informs them about your products.

Step 5: Monitor, Analyze, and Optimize

Once your store is all setup, it is important to track important KPIs to gauge the performance of your store and how you can improve it further. Use tools like Google Analytics to get better insights about your eCommerce data. Additionally, you should track all sales trends, analyze customer behavior, and then use these insights to refine your marketing strategies, products, and customer experience. Update your strategies regularly based on data-driven insights. This can lead to continuous improvement in your online store’s performance.

Final Thoughts

The eCommerce industry has a lot of scope for newcomers who want to bring innovative ideas to the global market. As these platforms continue to grow, you must make sure to understand what is exactly eCommerce, its respective aspects, benefits, and more, as we discussed in this guide. You can always follow this guide to develop more effective strategies and optimize your store for better sales.

If you want to make the most of your eCommerce experience, integrate it with the email hosting platform Neo. It offers a free email address for a limited time, along with other useful business-oriented features. Furthermore, it also allows you to create a free professional business email address without domain through its .co.site domain service. Hence, even if you don’t have a .com or .edu email domain beforehand, you can buy a domain from Neo and use it for free for a year upon purchasing its annual email hosting plans. So, what are you waiting for? Sign up for Neo and follow this guide to create your eCommerce store!

Frequently Asked Questions (FAQs)

Q1. What do you mean by guided selling in eCommerce?

Guided selling refers to a sales methodology that combines different sales processes with technology. This helps create customized buyer experiences. Here, customer data helps influence highly personalized interactions to enable buyers to make better purchasing decisions. Moreover, knowing what to sell online enables you to optimize your sales strategies further.  

Q2. How to get started with eCommerce?

You can start an eCommerce business by following a few simple steps. Start by finding product opportunities and deciding what to sell online. Research your competition well before writing a business plan, select your business name, and choose the right website hosting platform. You also need to purchase a domain name and create branding material like a logo to set up your online store. Now, all you need to do is choose your shipping strategy and set marketing goals to launch your business.

Q3. What are some websites where you can host an eCommerce business?

There are lots of websites that let you create and maintain your eCommerce website. Some of the popular ones include Shopify, Wix, Neo with its one-page website, Shift4Shop, Ecwid, and WooCommerce, among others.