Alex Williams
Alex Williams  โ€”

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what is eCommerce iconeCommerce is one of those buzzwords that seems to be everywhere these days. People often have conflicting definitions about what it means, as well.

To hear some folks explain it, eCommerce is both driving market change in an accessible way for low-budget entrepreneurs and something that's impossible for everyone but tech-heads to understand.

In reality, eCommerce is just a way of doing business. And one that is only possible thanks to recent technological developments.

But eCommerce is also a much deeper topic than meets the eye. Today, let’s take a closer look at what eCommerce really means for entrepreneurs. And whether you should consider eCommerce development for your professional future.

Table of Contents:

eCommerce in a Nutshell

Comprehensive Guide

online shopping with ecommerce websiteSimply put, eCommerce is just any kind of electronic commerce.

It can refer to individual transactions that are conducted over electrical platforms, like the Internet. But it more often refers to businesses that are primarily or entirely based on buying and selling over the Internet.

These days, eCommerce can encompass a wide range of activities and business types, including Internet banking, online ticketing, online auctions, and much more.

What is eCommerce? ๐Ÿ’ญ

eCommerce is growing so rapidly in part because it has fewer barriers to entry compared to traditional business models. For example, eCommerce businesses that buy and sell digital goods do not have to create a physical or brick-and-mortar storefront.

They can survive just by creating a digital website with a cheap website builder (which can nonetheless be expensive) and advertising entirely online. It’s a unique economic situation that has only become a major market force over the last couple of decades.

Technically, eCommerce first began in 1994 when Phil Brandenberger purchased a CD of the English rock star Sting. It was the initial proof that the Internet could be used to buy and sell physical items in the real world. Even if shipping still had to be carried out beyond the digital sphere.

Types of eCommerce Business Models

Businesses, Consumers and the Relationship Between Them ๐Ÿ‘”

eCommerce encompasses a wide array of different business models and types. But eCommerce businesses, like regular businesses, typically show up in a few major business models. These include:

Business to Consumer Models (B2C) ๐Ÿ“›

These are businesses that sell goods or services to individual customers that buy them for money

Business-to-Business Models (B2B) ๐Ÿ–จ๏ธ

These are eCommerce businesses that sell goods or services to other businesses, such as software-as-a-service companies or raw material companies

Consumer to Consumer Ecommerce Business Models (C2C) โš™๏ธ

These are businesses where consumers sell existing goods to other consumers, such as selling an old piece of furniture on a digital marketplace to another user

Consumer to Business Models (C2B) ๐Ÿ’ป

Where consumers sell their own products or services to a greater business. A good example of this model is any freelance eCommerce business owner, who sells their services to businesses for a fee

eCommerce Businesses

Mirrored Versions of Real-World Businesses ๐Ÿชž

These days, you can find a mirror eCommerce version of practically any real-world business you can imagine.

These include:

  • โ˜‘๏ธ Retail businesses - sell goods directly to customers without using an intermediate platform.
  • โ˜‘๏ธ Wholesale companies - sell products in bulk amounts, and often to other retailers rather than consumers.
  • โ˜‘๏ธ Crowdfunding eCommerce companies - collecting money ahead of a product being released to market.
  • โ˜‘๏ธ Dropshipping companies, which involves selling products that are manufactured by another third-party.
  • โ˜‘๏ธ Skill-based transactions, which include the above-mentioned freelancer example and other offerings.
  • โ˜‘๏ธ Subscription eCommerce models, which include recurring purchases or subscriptions of products or services
    Digital eCommerce companies, which sell digital goods or services. These companies include software-as-a-service companies and streaming services

All told, the sky is truly the limit when it comes to what eCommerce businesses can provide. Because of this freedom, more people than ever before are looking to eCommerce as their path to business success.

Why Build an eCommerce Business?

What Will You Benefit From? โž•

shop online with ecommerceUltimately, there are lots of good reasons why someone might consider building an eCommerce business. As opposed to opening a traditional brick-and-mortar store. This sector has seen tremendous growth over the last couple of decades.

For example, the Bureau of Labor Statistics shows that the eCommerce sector now employs 80% more people as of 2016 than it did in 1997. That's a huge increase, and the US should have nearly half a million eCommerce-related jobs by the middle of the decade.

Furthermore, additional data shows that 95% of all purchases will be through top eCommerce platforms or portals by 2040. In other words, eCommerce is the future for almost all marketplace transactions.

Those who jump on the eCommerce bandwagon now will be well-positioned to ensure their business’s success and long-term profitability. There are specific advantages associated with eCommerce business as well. These include:

Convenience ๐Ÿ 

For starters, eCommerce transactions are much more convenient than those placed at stores that have physical hours of operation. eCommerce transactions can occur 24 hours a day, anytime and anywhere, especially with the rise of automation and AI

Scalability ๐Ÿ“ถ

Furthermore, eCommerce businesses often benefit from greater selection and inventory capacity compared to retail stores. That’s because they can have larger storehouses that carry a wider range of products to be shipped to consumers instead of having to be limited by physical storage space at their storefronts

Faster Marketing ๐Ÿ—ฃ๏ธ

This is also a big advantage that the eCommerce sphere enjoys.

That's because it's much easier to reach target consumers through big data and targeted advertising methods. Such as social media marketing and email newsletters, than it is through traditional commercials. Or just hoping that someone walks by your physical store and wants to make a purchase

Potentially the Best Place for up and Coming Freelancers ๐Ÿ–ฅ๏ธ

freelancer iconFurthermore, eCommerce is arguably the only avenue for new freelancers to get on their feet.

That’s because it’s easier than ever for freelancers with digital-capable skills, such as programming or writing, to meet new clients.

And without having to write letters to local firms or businesses begging for work.

Perhaps the greatest eCommerce advantage of all is its accessibility. You don’t need tons of startup capital or huge batches of products to get started making money through eCommerce channels. In fact, many people now jump into eCommerce as a secondary source of income just through pursuing passion projects alongside their main professions.

Disadvantages of eCommerce Businesses

Nothing Too Dramatic ๐ŸŽญ

While eCommerce businesses do enjoy plenty of excellent advantages, there are also some disadvantages that anyone looking to get into this sphere should be aware of.

No Face-to-Face Customer Service

For instance, eCommerce stores typically have less robust customer service options, even if they have phone or online chat options available. It's just less convenient to speak to someone over a computer, even in this day and age, than it is to speak to someone face-to-face about a problem with a product.

Order Arrival Time ๐Ÿ“ฆ

Time constraints are another big disadvantage. When someone buys a physical product from an eCommerce store, they have to wait for it to ship to their door. This is only irrelevant when the product in question is digital and can be downloaded straight from the Internet.

But even in this case, eCommerce relies on the overall stability of the Internet and the satellites that maintain it every day

Is it Smart to Get Into eCommerce?

Yes, very! โ˜บ๏ธ

lightbulb iconBut even with the above disadvantages, it may be a smart decision to get into eCommerce early in this market transition.

Indeed, eCommerce represents the opportunity for new business owners and entrepreneurs to reach an unprecedented range of potential customers.

It’s now possible for a small startup to acquire customers across the country rather than having to rely on customers in its own city.

This is particularly good for niche or small businesses that may not have wide market appeal by design. For instance, bloggers can make a living with their hobby by offering related merchandise through eCommerce portals and earning passive income via their blogging activities.

Top Tip โญ

It may be a great idea to get into eCommerce if you want to start a business, but don’t have the startup money necessary or the confidence that your business would succeed in a traditional retail environment.

eCommerce Business That Also Has a Physical Storefront?

Possibilities Are Endless! ๐ŸŒŒ

Absolutely! In fact, the above statistic mentioning that 95% of all purchases will eventually be through eCommerce platforms includes those brands that maintain physical storefronts.

These days, it’s not uncommon for people to go window shopping at retail store locations and purchase the goods they like online after they get home, the online shopping stats don't lie, this digital shift is here to stay for the long run.

Top Tip โญ

It’s likely that even the most established brands will eventually need big eCommerce platforms in order to meet consumer demand and to expand their market reach.


End of The Road ๐Ÿ›ฃ๏ธ

All in all, the future is clear: eCommerce will be one of the main driving market developments over the next few decades. Therefore, it’s important for entrepreneurs and prospective small business owners to jump into eCommerce development and look at how they can bring their brands to the eCommerce sphere now rather than later.

Fortunately, we’ve got plenty of guides here that you can use to find answers to all of your eCommerce questions, such as where you can get top affordable hosting for your business or what eCommerce tools you should use.