E-commerce is any exchange of goods or services conducted online. The most popular example of e-commerce is shopping online. When you buy products online or sell products on eBay, you’re engaging in e-commerce! There are other forms of e-commerce, but for this post we’ll focus on retail.
Often times e-commerce is segmented into three different categories: business to consumer (b2c), business to business (b2b), and consumer to consumer (c2c).
One of the fastest growing sectors in retail, e-commerce is projected to reach over $4 trillion in sales by 2020. With major shopping holidays like Black Friday, Cyber Monday, and Amazon Prime Day, it’s no surprise how fast this sector of retail is gaining momentum.
Why E-commerce Works
E-commerce has experienced tremendous growth over the past few years for a reason. Smart businesses are taking advantage of the benefits of e-commerce as more and more customers are looking online for their next purchase. Let’s review some of the reasons e-commerce is so beneficial:
Expanded Market – While traditional brick & mortar stores reach local communities, e-commerce allows business owners to reach virtually anyone. Whether a prospective buyer is in Ohio or Ontario, they can visit your business’ website to make a purchase. The best part is that there isn’t any additional cost to reach these customers.
Low Barriers to Entry – As a business owner, starting your own online store is relatively simple. With dozens of e-commerce solutions available, you can create a website and start selling products fairly quickly. Building your business and generating consistent sales might not be so easy, but getting started is. Where opening a brick & mortar location could cost thousands, starting your online business can be very inexpensive.
Accessibility – As an online shopper, you expect to be able to browse websites and make purchase at any time. 24/7 availability is one of the greatest benefits of e-commerce. Even if you aren’t on the clock, customers can come to your website and make a purchase.
Working from Home – E-commerce allows for a very flexible work schedule. With a computer and internet access, you can work virtually anywhere. Whether you’re at home or on the beach, e-commerce business management can easily be performed on the go.
Advanced Marketing – Customer data is more than plentiful with e-commerce. Using the correct tools, you gain access to a number of different facts and statistics regarding your customers. This information can be utilized to effectively target new customers based on information collected from previous ones. From Facebook advertising to email marketing, e-commerce can be a marketer’s dream come true.
Starting an E-commerce Business
It’s important to have a tactical plan when starting an e-commerce business, whether you’re new to the space or are a seasoned veteran. The actual setup can be completed easily, but researching, planning, and growing takes time.
Selecting a product to sell – The first step to building an e-commerce business is finding the right product to sell. There are different ways to choose the right product, but ultimately you want to ensure the product(s) you want to sell have good margin potential. You’ll also need to consider how you’ll get the products you want to sell. The most common methods are making the product yourself, ordering products in bulk from a wholesaler, or dropshipping products to your customers.
Research – Now that you have an idea of what you want to sell, it’s time to begin conducting research on the niche you’ll be selling to. This includes audience insights, retail trends, and many other different factors that will affect your business.
Branding – This is the fun part. You get to lay the foundation of your business. What is your brand? What does it stand for? What is the value proposition? These are questions you’ll need to consider as you begin creating your brand.
Choosing Your E-commerce Platform
With all of your planning complete, it’s time to build the actual e-commerce store. There are two main options for accomplishing this:
Build it yourself – If you have web development experience, you could build your e-commerce store from scratch. Of course, it will take longer and could cost a lot more if you end up hiring a contractor or agency, but it will grant you 100% control and customization moving forward.
Choose a platform – Many different e-commerce platforms offer out-of-the-box solutions that contain everything you need. We recommend using Shopify to get started with your e-commerce business. With Shopify, you can use apps like ProductPro to get a website with products up-and-running in as little as an hour.