What is e-commerce?
At its core, e-commerce refers to the purchase and sale of goods and/or services via electronic channels such as the internet. e-commerce was first introduced in the 1960s via an electronic data interchange ( EDI ) on value-added networks ( VANs ). The medium grew with the increased handiness of internet access and the advent of democratic on-line sellers in the 1990s and early 2000s. Amazon began operating as a book-shipping occupation in Jeff Bezos ’ garage in 1995. EBay, which enables consumers to sell to each other on-line, introduced on-line auctions in 1995 and exploded with the 1997 Beanie Babies craze. Like any digital technology or consumer-based buying market, e-commerce has evolved over the years. As mobile devices became more democratic, mobile commerce has become its own market. With the rise of such sites as Facebook and Pinterest, social media has become an important driver of e-commerce. As of 2014, Facebook drove 85 percentage of social media-originating sales on e-commerce chopine Shopify, per Paymill. The changing grocery store represents a huge opportunity for businesses to improve their relevance and expand their market in the on-line world. Researchers predict e-commerce will be 17 percentage of U.S. retail sales by 2022, according to Digital Commerce 360. The U.S. will spend about $ 460 billion on-line in 2017. These figures will continue to climb as fluid and internet use elaborate both in the U.S. and in developing markets around the global.
Editor’s Note: Looking for information onthe right tools to help you build your business website? Use the questionnaire below, and our vendor partners will contact you to provide you with the information you need:
Categories of e-commerce
As with traditional department of commerce, there are four principal categories of e-commerce : B2B, B2C, C2B and C2C .
- B2B (business to business) – This involves companies doing business with each other. One example is manufacturers selling to distributors and wholesalers selling to retailers.
- B2C (business to consumer) – B2C consists of businesses selling to the public through shopping cart software, without needing any human interaction. This is what most people think of when they hear “e-commerce.” An example of this is Amazon.
- C2B (consumer to business) – In C2B e-commerce, consumers post a project with a set budget online, and companies bid on the project. The consumer reviews the bids and selects the company. Elance is an example of this.
- C2C (consumer to consumer) – This takes place within online classified ads, forums or marketplaces where individuals can buy and sell their goods. Examples of this are Craigslist, eBay and Etsy.
If you have a elementary intersection to sell and a desire to expand your sales online, there are a few tools you can use to get started. Websites such as Squarespace and WordPress offer mobile-friendly, ready-to-go e-commerce templates that help you get a store up and running cursorily. As a patronize owner, you will need a way to collect recognition tease payments from consumers online. PayPal, Square and Google Wallet are all popular ways of accepting and managing on-line payments. You can besides sell your merchandise through on-line giants like Amazon. If you are selling physical goods, you ’ ll need to consider how you ’ re going to ship them. PayPal and other processors have worked with shipping merchants, including USPS and UPS, to offer one-stop postage process. You will besides need to inquiry your state laws to determine if you are required to obtain a let for selling on-line, or if you need to collect sales tax for your state or municipality. Dropshipping is a way to outsource your inventory and embark. Dropship services store and ship the products you sell as a merchant, many times for wholesale prices. These companies act on your behalf, using your brand and packaging. The best of these services have integrations with Amazon, Shopify and early e-commerce platforms. As your company grows, you may want to consider more boost ways to process payments, such as using a merchant account and a servicing such as Authorize.Net. Services that integrate more in full with your bank frequently offer discount transaction costs compared to processors such as PayPal. [Read related article: How to Choose a Merchant Account Provider]
As in any new guess, the first gradation in succeeding in e-commerce is to set goals. Do you plan to increase tax income from existing customers ? Gain newly customers ? Increase the average order rate ? Sell through fresh channels ? Lower prices ? once you have figured out your goals, it ’ south fourth dimension to set a design.
Read more: 8 Top Dividend Index Funds | The Motley Fool
A SWOT analysis can help you assess the strengths, weaknesses, opportunities and threats of your party ’ mho current environment. What does the market attend like ? Where does your occupation excel, and where does it falter ? Review your entire business, not fair segments of it. Evaluate external opportunities, because this is the frequently the chief place to invest time and money. Be honest with yourself when analyzing weaknesses and threats, or else the analysis will not be helpful. After the SWOT psychoanalysis is done, see how it fits into your overall vision. Where do you see your business in five years ? In 10 years ? This will help you set commercial enterprise objectives for the stream class, for sales, profits, customers, traffic, new systems and newfangled staff. After the objectives are set, you can set a scheme into put yourself or hire an e-commerce adviser to help you. other methods to help you determine how to best grow your company into a new segment include PEST ( political, economic, social and technological ), MOST ( mission, objective, strategies and tactics ), and Porter ’ sulfur Five Forces analyses .
In summation to a firm clientele scheme, it ’ mho significant to have a basic understand of e-commerce jurisprudence. Online sellers, peculiarly those selling internationally or across state lines, face unlike legal and fiscal considerations, particularly regarding privacy, security, copyright and taxation. The Federal Trade Commission regulates most e-commerce activities, including the use of commercial emails, on-line advertise and consumer privacy. Businesses collect and retain sensitive personal information about their customers, and your company is subject to federal and state of matter privacy laws, depending on the type of data you collect. even though the best process companies all have high standards when it comes to data protection, you ’ ll placid want to make certain all the information you ’ ra storing on customers is secure, and legal. There are besides on-line advertise laws that protect consumer privacy and ensure truthful marketing practices online. As an e-commerce business, on-line advertise is a major separate of your scheme. Over the past ten, federal and state governments have passed new on-line advertising laws. As you expand into on-line selling, it is authoritative to be familiar with these. The CAN-SPAM Act, for example, sets the rules for ad through e-mail, the most authoritative predominate being that consumers must be able to opt out of messages from businesses. In accession to protecting consumers from data leaks and misleading on-line advertise, digital works are protected on the internet via the Digital Millennium Copyright Act. There are several provisions that e-commerce businesses need to be mindful of, including copyright misdemeanor liability and a service provider ’ south responsibilities.
More information about e-commerce can be found at the follow resources : Editor’s Note: Looking for information on e-commerce solutions for your business? Use the questionnaire below, and our vendor partners will contact you to provide you with the information you need: extra report by Katherine Arline .