What is eCommerce? Here are some definitions, tips and tools to help you run your business.

What is eCommerce? Here are some definitions, tips and tools to help you run your business.

eCommerce is an integral part our modern, global economy. It has revolutionized the way that we shop and do business over the past two decades. Wix eCommerce platform merchants saw their sales revenue grow 114% over the past year, to $5.4 billion in online transactions.

It’s now easier than ever to start an eCommerce business. You only need to set up an online shop using an all-in-one platform such as Wix eCommerce and then you can sell products or services around the globe.

You’ve reached the right place if you’re new in eCommerce. This article will answer your questions.


What is eCommerce? A basic definition

eCommerce stands for electronic commerce. It is a general term that refers to any transaction made over the internet. eCommerce can include retail stores such as clothing, other physical products, and services all kinds, including cyber security and booking a hotel.

Online sales and transactions are most commonly made through an eCommerce platform, also known as an eCommerce store.

Many eCommerce businesses, particularly small ones, are built on wholesale or retail . This means that they sell and deliver physical goods. eCommerce does not only sell products. There are many types of eCommerce.

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The History of eCommerce

A 21-year old named Dan Kohn sold a Sting CD to his friend for $12.48 in 1994. This sale is notable because Kohn sold the CD through NetMarket and was paid via encrypted credit card transactions. It was the first eCommerce sale.

Kohn may be the first to sell online, but entrepreneurs have been paving the way for online commerce for decades.

CompuServe was founded in 1969. It established many of the practices and platforms that would eventually allow eCommerce to thrive.

ARPANET was a precursor to the internet. In 1971, two Stanford University computer science majors and MIT students used it to remote negotiate a marijuana deal. A Videotex device was used by a 78 year old woman in the UK to order groceries. Both cases required in-person payments and in one instance, the product was illegal. Neither can be considered an eCommerce transaction.

The Sting CD is the first eCommerce sale that was truly end-to-end. Things picked up quickly after that. Pizza Hut launched PizzaNet in August 1994. Customers could order and pay online for their pizzas.

In 1995, Amazon launched its online bookstore service. It was closely followed by eBay and PayPal. This marked the dawn of an era of eCommerce, which today covers nearly every product or service and is responsible for billions in global transactions.

Here is a timeline listing some of the key milestones in eCommerce:

1979: Michael Aldrich creates online shopping by connecting television sets to telephone lines. This allows people to place orders, but not to pay for certain items remotely

1982: Boston Computer Exchange launches its first online marketplace, selling used computers via its website (though payment was made by phone).

1984: Jane Snowball (a 78-year old grandmother from Britain) orders groceries for her home with a Videotex device

1994: History’s initial end-to-end eCommerce sales are made by 21-year-old Dan Kohn. The product: A Sting CD

1994: Pizza Hut launches PizzaNet. This is the first ever online ordering system for pizza in the world.

1995: Amazon launches an online bookselling site

1997: The Launch of PayPal

2005: First Cyber Monday sale

2014: 2.68 billion in online sales on a single Cyber Monday

2019 Online retail sales surpass brick-and-mortar sales for the first time

2024: eCommerce sales expected to account for 22% of global retail sales

Types Of eCommerce Businesses

There are two main ways to categorize an eCommerce company. You can either categorize an eCommerce business based on the parties involved in the business or the type of services or products the business offers.

The Parties Involved

The abbreviations B2B and B2C are commonly used in business contexts. These abbreviations refer to the parties involved in a business transaction. There are many other options available to you to include all business types.

B2C-Business to consumer

One of the most popular types of eCommerce model is business to consumer. This model is also the most straightforward to understand. These businesses offer products and services directly to customers. They can be anything from physical products to digital services.


These models, which refer to businesses that offer goods and services to other businesses, are very common.

B2B can be used to cover a variety of businesses including wholesalers, manufacturers of raw materials, and service providers as long as they are geared towards business.

C2C- Consumer to consumer

With the advent of eCommerce, consumer-to-consumer business models have exploded.

C2C is basically any transaction between two individuals, not business entities. This includes transactions made on platforms like eBay and Craigslist. It also applies to social media platforms such as Facebook or Instagram.

C2B-Consumer to business

The consumer to business business model is relatively new and describes services offered by individuals to businesses.

This model can be used to include freelancers or other small service providers. C2B can be used to purchase stock images, videos and music created by individuals. You can also find C2B service providers on platforms like Fiverr and Wix Marketplace.


eCommerce is not just for consumers and businesses. The government is another entity that can both purchase and provide services.

B2G companies focus on providing products or services that the government can purchase, whether it is the federal government or the local government. These businesses include many sectors, such as cyber security and waste management, urban planning, and others.

G2B-Gov to business

The B2G model is reversed when government to business transactions are made. This refers to products and services that the government offers businesses. This is often used to describe information that companies have the ability to purchase, such as legal files or blueprints.

These six business models can be used for all types of eCommerce. However, most people refer to eCommerce as B2C or 2B. These types of businesses are also the focus of this article.

Categorizing eCommerce Business by Products or Services

It can be helpful to describe eCommerce businesses from the perspective of all parties. It doesn’t tell much about the business itself, its offerings, or how it operates.

It is easier to distinguish between eCommerce businesses by categorizing them based on the types of products and services they offer.

Physical Products

Online sellers of physical goods are very common and often the first thing people think of when they talk about eCommerce.

These online shops include wholesalers and retailers who sell all types of physical products, including clothes, books, groceries, gardening accessories, and books.

Many businesses selling physical goods online will have a store or merchant account on their website.

Physical goods are the most difficult to ship logistically. There are several models to help simplify this process. Print on Demand and Dropshipping are services that allow businesses to make and ship products without the need for a factory or logistics center.

Dropshipping Explained

Dropshipping is a business model where a company uses an outside service to produce and fulfill product orders.

Dropshipping allows business owners to focus on marketing their products, creating an exceptional customer experience, and not worrying about manufacturing logistics, warehousing and order fulfillment.


You can buy a wide range of services online, including hiring freelancers and streaming movies. Not all service-based eCommerce companies operate in the same way.

Many service providers offer their services through their website or on a dedicated platform that offers similar services. This is much the same as a product-based company. A business may ask customers to fill out forms or contact them first before they purchase the service. It all depends on the business type and the clientele.

Subscriptions are another common business model for eCommerce services. This model is used by streaming services like Netflix. If you are able to consistently offer more value, it’s a great way of creating a steady income.

Digital products

A third type of eCommerce is somewhere in the middle of physical products and digital services. It’s called digital products. This industry has seen a boom in the last two decades. This includes music files, software, and in-game purchases for video games.

It’s easy to give digital products to customers, since it’s only enabling a download. These digital products can also be freely duplicated, unlike physical products that require manufacturing.

Statistics and eCommerce Trends

Let’s take a look at eCommerce statistics to understand the impact eCommerce has on modern economies.

Online sales have taken over retail

Online sales made up around 14% worldwide retail sales in 2019. This number is predicted to rise to 23% by 2023, nearly a quarter of all retail sales. According to Nasdaq eCommerce will facilitate 95% of all retail sales by 2040.

Amazon is the dominant eCommerce site in the U.S.

Although almost half of all eCommerce transactions are conducted on websites of small businesses, large corporations enjoy more than 50% of all online sales in the U.S. Amazon facilitates nearly 39% eCommerce sales. Additionally, 63% percent of all eCommerce shoppers start their product searches on Amazon.

Shipping is free

It’s not enough to offer quality products at affordable prices and fast shipping. Free shipping is one of the best incentives to shop online.

Many eCommerce businesses are finding it difficult to sell products online without free shipping. This can discourage potential customers. Shoppers value free shipping so much that 85% say they prefer fast shipping to free shipping.

It is a great way to attract new customers and can increase your profits on each transaction. Online transactions have a 30% higher success rate when you offer free shipping.

Online shopping is more convenient than ever

It’s not easy to shop online and feel comfortable. Online transactions are still a common fear for many shoppers.

This has changed significantly over the past year as a result of the COVID-19 crises that impacted the way we shop. 43% of online shoppers are positive about buying products and services online. However, the real shift is in consumers’ willingness to experiment with new brands online. 44% of COVID-19 shoppers said they had done so during the crisis.

Customers need high quality product images and videos

It is crucial to be able to see exactly what the product looks like before you buy it. This means that product photos can have a significant impact on customers’ decisions. According to the U.S., 60% of digital shoppers need to view 3-4 images to make a purchase decision.

You can increase sales by taking product photos. Good photography can also help increase your price tag. CXL Institute states that larger images can create a perception of value that is $13.50 higher than smaller images.

However, this is not limited to photos. Promoting sales is also a huge part of product videos. Watching product videos increases the likelihood of a buyer making a purchase by 73%.

eCommerce is a huge part of social media.

It is no secret that people spend a lot of their time online on social media. This makes eCommerce very attractive. 49% of U.S. customers search for new products on Facebook.

Many eCommerce companies already use social media to promote their products through paid ads. Businesses use Facebook ads extensively, with an average cost per click of $1.72 and a conversion rate of 14.3%.

The Pros and Cons Of eCommerce

There are many reasons why you should start an online company. Before you begin to look for eCommerce business ideas, make sure you understand the advantages and disadvantages of eCommerce.


Low operational and investment costs:

eCommerce is much more affordable than a brick-and-mortar shopfront. Instead of buying a space and renovating it to make the perfect store, you can create an online store and create a website.

You can also avoid hiring employees at the beginning and avoid high rents and high utility bills that are associated with physical property.

Open 24/7:

Online shops, unlike physical businesses, don’t have to be open during business hours. An eCommerce business can be open 24/7 and generate income even while you’re asleep.

Get more customers with

Your clientele doesn’t have to be located in a physical storefront. You can operate your business online. This allows you to market to a wider audience. Online stores can be accessed by customers all over the globe and ship internationally right away.

Easy and fast for customers:

The greatest advantage of eCommerce is its ease-of-use for shoppers.

Your customers can order products online and have them delivered at their home. This makes it much easier than shopping in the stores. Customers are more likely make impulse purchases and return for more if they are satisfied with your products.

easily scalable:

It is easier to scale up an eCommerce business than a physical one.

You may need to store more stock and hire more employees to handle order fulfillment. You won’t need to locate new stores or hire enough staff to manage an entire store. You can expand your business, but you can also expand your online store.


It is more difficult to interact with customers:

eCommerce has many disadvantages. One of these is the inability to communicate with customers. It is difficult to communicate with customers and understand their needs.

This can be countered by staying in touch with your customers via social media, email, surveys, and other means.

Shoppers cannot try products before they buy:

Customers can’t see the products in an online store before purchasing them. Customers can’t touch, feel, or try on clothes.

Online stores often offer free returns to make sure their customers aren’t afraid to return items. Your customers will appreciate the product photos and videos.

Technology can destroy sales:

Any error or bug that affects your online business can lead to financial ruin. Many unexpected obstacles can arise, including transaction errors, page design glitches, server crashes, and other issues. These issues can ruin a sale and discourage customers from returning to your online store.

To minimize potential problems, make sure you use a trusted host with a track record.

Extremely Competitive:

eCommerce can often be more competitive than traditional retail. You are not competing with local businesses, but with all of the world.

There are many ways you can stand out. The key to eCommerce success is good marketing.

Get Started with eCommerce

Starting an online store can be a great start if you are looking to establish an eCommerce business. These 5 steps are a good place to start. You can get more detailed, but they will help you get started.

01. Decide what you want to sell online

Before you launch your eCommerce business, you need to decide what you want to sell. You can choose products based on your target audience or vice versa.

Your success may depend on the products you sell. Take your time to plan before you start.

02. Design and build your online store

You will need to create a website that supports eCommerce in order to start an online store.

Now it’s time for you to design your website. eCommerce website design can be crucial to creating a positive shopping experience. It can also make or break an eCommerce company.

03. Locate a manufacturer

Once you have decided on a product or line of products, it is time to make them. The type of manufacturer you choose will vary from one product to the next.

You may not require a factory if you are looking for digital products. However, it is possible to hire professionals to help you create and finish your products.

04. Locate shipping partners

Any online shop must offer shipping. Every customer should receive their product quickly and in good condition. You will need a shipping company that is reliable to do this.

Dropshipping is a great option if you don’t want to deal with the hassle of manufacturing and shipping your products. Dropshipping allows you to connect your store with a dropshipping company that will manufacture, fulfill orders, and deliver your products.

Digital products can be shipped directly. You still need to ensure that your products are properly distributed, so emails are sent without any errors and download links are always available.

05. Connect to a payment provider

Without getting paid, no business can be complete. You will need to connect your online shop to a payment provider in order to process payments and process transactions. You may offer multiple payment options to ensure that customers have an easy way to pay. This could include credit card, PayPal , wire transfer and digital wallets such as PayPal .

While we are on the topic of payments, it is worth noting that your eCommerce company must comply with online tax regulations.

eCommerce Marketing Tips

It is difficult to underrate the importance of eCommerce marketing. It is a crucial part of acquiring new clients and retaining existing customers. It is essential for any eCommerce business.

Optimize the SEO of your online store

Optimizing your online store to rank higher in search engines is one of the best ways to drive traffic. This is known as eCommerce SEO (search engine optimization).

SEO, which is not too technical, refers to optimizing your website’s text, images, and overall build in order to get a higher rank on search engines such as Google.

Content marketing

eCommerce is a very popular place to use content marketing. It is simply creating content (blog posts) to draw people to your site. SEO and content marketing can make a big difference in your store’s traffic.

Use Facebook and Google Ads

Google ads and Facebook ads are two of the most popular paid advertising channels for eCommerce. They have been proven to be highly effective. You can reach a large number of internet users by using Facebook, Instagram, or Google. You must be precise in setting up your campaign to ensure you don’t waste your marketing dollars on people you don’t know.

Market using Emails

Email marketing is a great way for customers to keep in touch. You can send them information about new products, sales or a friendly greeting. Email marketing has one of the highest ROI’s in eCommerce marketing. To run a successful eCommerce business, however, you will need to have a strategy that covers all channels.

Do You Need eCommerce?

eCommerce is quickly becoming an integral part of our economy. Online shopping continues to grow in popularity and eCommerce is expected to surpass traditional transactions within the next few years.

source https://www.wix.com/blog/ecommerce/2021/05/what-is-ecommerce
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