27 September 2022

What is eCommerce?


Just like email is electronic mail, eCommerce is electronic commerce – yet the reality of what makes eCommerce actually function is far more complex than that simple idea suggests.

In fact, the eCommerce market worldwide represents a gargantuan industry, of which the Asia Pacific audience makes up an incredibly dominant proportion – indeed, US$1.5 trillion of 2022’s eCommerce revenues take place in China alone.

To make the eCommerce industry work and customers ‘add to cart’ both their little luxuries and life’s essentials, this industry has had to grow significantly in the last 20 years.

Today, eCommerce sales are led by accomplished managers, and use SEO content creation and PPC online advertising to stay relevant in a heated and competitive eCommerce market.

What kinds of products use eCommerce?

The bygone age of being able to buy only what the stores in your local town or city could offer you are long gone. Today, customers can use the internet to buy almost anything they wish – from tech like games consoles and mobile phones, through to groceries, cosmetics, clothing and books.

Products on eCommerce aren’t just physical either. You’re just as likely to use eCommerce to purchase gift cards, downloadable digital items, or NFTs on the blockchain.

In specialist eCommerce marketplaces, high value assets are bought and sold without buyers and sellers ever needing to meet in person. Assets like automobiles, property and gold are bought and sold online by both hobbyists and specialist investors, and the whole process sees thousands of dollars changing hands daily.

The core ingredients of a good eCommerce business

While customers often feel as though the idea of ordering something online and having it pop up on the doorstep the next day is pretty magical, the entire process of moving even one product from a warehouse to a buyer is a deep, complicated network of resources and workflows.

Once an entrepreneur decides they want to sell via eCommerce, a number of things need to happen. Firstly, inventory needs to be sourced – what is being sold, and to what kind of buyer?

After that comes warehousing – where are the products being safely stored? Smaller businesses can use their own premises to store stock, but big eCommerce giants use external inventory management and warehouse partners to handle such an immense volume of items.

When buyers purchase your products, how do they get them? This is where logistics comes in – an eCommerce business needs to decide whether products are shipped via national mail services, specialist courier companies, or even more specialised logistics management franchises.

Customers also need a support chat or team to contact if things go wrong – and to even get customers to add to cart in the first place in such a competitive business landscape, you also need to consider how to best list your products online for SEO, as well as market them via PPC and affiliate marketing as you grow.

If it sounds like a lot, there’s no need to worry. Not only is help always on hand, but we are going to continue digging into the depths of how eCommerce works to help prepare you for success.

Marketplaces and D2C – understanding eCommerce channels

Managers and business leaders in eCommerce use ‘channels’ to get their product inventory live in front of a potential buyer audience of millions of people.

Channels are another term for the kinds of platforms and websites an eCommerce seller uses, and they can broadly be divided between marketplaces – websites like Amazon, Etsy and eBay – and D2C, in which the seller creates their own online store and sells directly to customers.

The debate between whether D2C sales or marketplace sales are the better way to do eCommerce is always raging, and it varies based on your business strategy, your product inventory and how confident you feel entering the market.

In brief, we will break down the key benefits and drawbacks of each approach below.

Marketplace eCommerce

● Fast to set up and list products
● Internationally trusted brand names (Amazon, eBay, Etsy, etc.)
● Huge audience of potential customers
● Options to pay to boost listing visibility in search rankings
● Additional support in dispute resolution, customer enquiries, etc.
● Competitive landscape – hundreds of rival sellers
● Marketplaces take percentage cuts of every sale you make, and sometimes other fees
● Marketplaces can delist your items or ban sellers if they see fit, stalling your cash flow without warning
● Pressure to lower prices to keep pace with competitors

D2C eCommerce

● Complete control over the look, feel and branding of your store
● Set prices as you see fit and enjoy larger margins
● No fees to pay to marketplaces
● No competing listings means greater control over the buyer journey
● Bigger need for SEO and PPC marketing to attract attention
● Need to build trust so customers add to cart without abandoning a purchase
● Full responsibility over after-sales support and customer care
● A need for technical literacy in building and maintaining your eCommerce website
● A need for data protection and customer privacy safeguards as you handle sensitive information

What can we learn from the companies who do eCommerce well?

As little as twenty or thirty years ago, the idea of buying most things online was considered a quirk. Like a mail order catalogue, eCommerce was largely seen as what someone would use to buy something that was a little obscure or difficult to find in a physical shop.

Nowadays, almost everything can be – and is being – bought online. A big reason for that is how well companies are doing at SEO marketing – the art of making their products pop up first when customers search for product names or descriptive phrases – but also PPC marketing, where advertisements entice customers to buy things they perhaps hadn’t considered before during their everyday web browsing.

How Amazon shaped eCommerce

Naturally, the most famous example of a successful eCommerce business is Amazon – an organisation that has fundamentally shaped not only the industry, but the very fabric of technology around the world.

While many of Amazon’s business practices often make for uncomfortable reading, the truth is that the long history of this enterprise cements that prioritising customer choice, convenience and price competitiveness has been the secret to its eCommerce success. Any add to cart action that a customer makes on Amazon is designed to be as free from friction as possible, and both delivery times and customer support prioritise keeping customers happy – which keeps them coming back.

How eBay shaped eCommerce

A big benefit in eCommerce is being able to sell products that are specialised or niche. Customers who want something very specific and don’t want to be bombarded by algorithms recommending them all kinds of other things are a demographic that many eCommerce entrepreneurs find great success in targeting.

Yet for however easy it makes buying almost everything today, did you know that eBay’s beginnings were as a far more niche eCommerce seller – specifically, for Pez dispenser collectors?

Fast forward from those humble beginnings to today, and the change in eBay’s business model is almost unrecognisable – yet those roots still show. Why? Because if a buyer wants something incredibly specific – a vintage comic book, a rare video game, a distinct collectible coin or just a hard to find item in general – his or her first port of call is almost always eBay.

Chasing the crowd in eCommerce sales can only take you so far – and as eBay’s legacy proves, becoming a specialist vendor of specific product niches can be a real shortcut to success when done right.

Remember – not all eCommerce ventures succeed

Because the eCommerce market is so massive and holds so much potential against a rather gloomy global economic outlook, many businesses believe that simply jumping into the eCommerce market with both feet is the best course forward.

As we have discussed today, the reality of this industry is not as simple as that. Not only are the leaders in the eCommerce industry very well entrenched, but vendors are pressured to be incredibly competitive.

That means significant knowledge and investment in SEO marketing and PPC advertising that converts is required to get customers to not only find your products, but click to add to cart too.

Don’t take this as discouragement though – far from it. We are simply being honest with you about the challenges to overcome in the eCommerce market. Put simply, it requires a level head – just jumping in and hoping for the best has caused even the biggest names in the tech industry to need to backpedal and reconsider their next move.

Master eCommerce with the right know-how

The eCommerce market is ripe with potential, but those rewards will only go to those best equipped and qualified to stake their claim.

Every time a user clicks to add to cart, they expect a seamless journey and to receive their goods without incident – something that takes a monumental amount of work behind the scenes.

From SEO to PPC, from conversion rate optimisation to brand positioning, our eCommerce certification course is ready to help you flourish.

Ready to master the eCommerce industry? The potential is in your hands.

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