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What is E-commerce?

"What is eCommerce?" might be the first thing that comes to mind when you hear the word. As it becomes more popular, you might hear more and more people talking about eCommerce and online stores as a way to make money or shop online. If you want to know what eCommerce is, we'll tell you. We'll also answer all your other questions about this subject. You will also learn how to start an eCommerce business, how to run an eCommerce website, and a lot more with CanCode.io.   

Ecommerce

  Ecommerce is a short form of the phrase "electronic commerce," which means any kind of exchange of money for goods or services that takes place online. Ecommerce is a broad term that includes everything about buying and selling online. It can also be written as "E-Commerce," "e-commerce," or "eCommerce." Any spelling is correct, and they all mean the same thing, which is to do business on the internet. Since the definition of eCommerce is so broad (it includes any kind of buying or selling of goods or services online), there are many different kinds of eCommerce businesses. In this article, we go into more detail about the different kinds of online businesses that people can run.

What is an eCommerce store?

    An eCommerce store is a website that sells things and takes payments. Amazon is an example of an online store where you can buy things like books and clothes with your credit card or other payment methods.

What's the difference between e-Commerce and ebusiness?

  The difference between eCommerce and ebusiness is that eCommerce is a type of ebusiness. Ecommerce is only about online sales, but ebusinesses make money in many different ways, including online sales and offline transactions.  

The Different Business Models for E-Commerce

  When you ask, "What is eCommerce?" the first thing you need to know is: The best way to start talking about different eCommerce businesses and the different kinds of eCommerce businesses is to talk about the different kinds of eCommerce business models. There are three main types of business models for E-commerce:  
  • What types of products are sold?
  • Who the products are sold to?
  • Where the products are sold on?
  Let's look into these three identifiers more:   

What Types of Products Are Sold?

    The kinds of products that an eCommerce business sells are what make it unique. Any e-commerce business can sell four types of products:  
  • Physical Products: clothing, dinnerware, picture frames, etc. 
  • Digital Products: ebooks, music, online courses, etc. 
  • Services: coaching, cleaning, tutoring, etc. 
  • Affiliates: digital products, physical products, services, etc.
  Every eCommerce business that sells things can be put into one or more of these categories, which basically just tells you what kinds of things they sell. Some eCommerce businesses sell physical products. This means that they have real, tangible products that they ship to their customers. When their customers open the shipping package, they will find a physical product that they can touch, feel, and see. Digital products, on the other hand, are a type of product that eCommerce businesses can sell without having to ship a physical product. Customers can download digital products right away, so there is a sense of speed with this type of product. It also helps satisfy impulse buyers because they can start using their new purchase right away instead of waiting a couple of weeks for it to ship. Customers can also buy digital or in-person services from businesses that are sold online. These services can be anything from design services or streaming services (both digital services) to home improvement services or dog-walking services (which are in-person services). This category includes any business that offers a service instead of a physical or digital product. Lastly, e-commerce businesses can also make money through affiliate links, which give them a cut of the sales they help make. Affiliate commissions can be made by blogs, websites run by people with a lot of followers, or even websites like Canopy that find the best products to sell online for consumers.  

Who the Products Are Sold To?

    Who they sell to or who their target market makes each e-commerce business unique. Customers can be people, businesses, or even the government. Let's look at the three different kinds of people that eCommerce businesses sell to: These are the three main groups that eCommerce businesses sell their goods or services to:   
  • B2B: Business-to-Business is what this means. This group is made up of e-commerce businesses that sell physical or digital goods or services to other businesses. This could include, for example, manufacturers or suppliers that give other businesses materials or products. Shopify is a B2B company because it sells subscription services for online shopping to other businesses. 
  • B2C: Business-to-Consumer is what this means. This group is made up of e-commerce businesses that sell physical or digital goods or services to consumers. This includes stores and online stores that sell directly to consumers. Amazon is a business-to-consumer company that sells both physical and digital goods to people. 
  • B2G: This means "Business to Government." This group is made up of e-commerce businesses that sell physical or digital goods or services to government institutions or agencies. This could include, for example, companies that make specialized software, office furniture, uniforms, and so on. Mark 43 is a business that sells to the government. Its specialty is giving technology to the police.
  Even though most businesses sell to only one of these types of customers, it is not impossible for eCommerce businesses to sell to more than one type of customer. It's important for e-commerce businesses to know exactly who they sell their products to because that affects important choices like marketing, branding, shipping, markup, etc.  

Where the Products Are Sold On?

    Lastly, you can tell eCommerce businesses apart by how they sell their products to their customers. This is what you can do:  
  • Branded Ecommerce Stores: These are eCommerce stores that are owned and run by the person or people who started the store. They sell their own products to their customers on their own terms. Most of the time, eCommerce platforms like Shopify or BigCommerce are used to build these kinds of stores. 
  • Ecommerce Marketplaces: Online marketplaces like Amazon, eBay, and Etsy are also good places for e-commerce businesses to sell their goods. Each platform will have its own rules that you must follow or you will be kicked off the platform. Some products may not be sold on certain platforms. To keep being able to sell on the platform, you might also need to keep a good merchant review score. Also, some eCommerce marketplaces put their sellers in competition with each other, which could make it harder for you to sell your products on their websites. When you sell on an eCommerce marketplace, you give up some control. 
  • Conversational Commerce: Since most people use social media every day, social media platforms are making it easy for people to shop through the posts on their newsfeeds. Ecommerce brands can sell their products through conversational commerce on Instagram Shop, Facebook Marketplace, Pinterest Shopping, and TikTok.
 

The Different Platforms for Ecommerce

    Every business that sells things online needs an eCommerce store, which is just a website where customers can look at, learn about, and buy their products. The different kinds of eCommerce platforms that online stores can use to sell their goods. No matter if a store wants to sell on Amazon, eBay, or Etsy, they should also have an eCommerce store set up so they don't have to sell all of their products through a middleman. The only way to have full control over your eCommerce business is to set up a self-branded store on an eCommerce platform. This is also the best way to have full say over branding, marketing, customer experience, and revenue. Shopify is the best e-commerce platform on the market, so anyone who just wants to get started should build on it. In our Shopify Review, we talked about why they're the best eCommerce platform. If you want to learn more about the features and services they offer, check out that review. We keep making changes to it as new features and services come out.  

Who Can Start a Business in E-Commerce?

  Anyone can start their own business that sells things online. Anyone can go from asking, "What is eCommerce?" to building their own eCommerce business in just a few weeks by learning about and trying out different eCommerce platforms. Some businesses in commerce are easier to start than others. Some people who run an eCommerce business can learn quickly, even if they are just starting out. Anyone with the time, energy, and resources to put in the work can build, launch, and grow their own eCommerce business. Here are some benefits for people who just started an e-commerce business:  
  • There’s a Low Barrier to Entry: In the past, when people couldn't do business online, people who wanted to start a brick-and-mortar business had to get a bank loan to rent a store and buy inventory and equipment before they could even start selling to customers. They only had one chance to succeed, and if they didn't, they'd lose a lot of money and be turned away by any bank they tried to work with again. Today, you can start your own business without having to carry inventory, or you can run your business online for less than your monthly cell phone bill. To start your own eCommerce business, you only need a few minutes to sign up, and you don't need any special skills or knowledge. So, once you're done reading "What is eCommerce?" you can build your own eCommerce store and try it out right away. 
  • Unlimited Audience Reach: E-commerce entrepreneurs can sell to anyone in the world, while brick-and-mortar businesses can only sell to people who live nearby. The biggest benefit of being able to sell anywhere in the world is that it gives you more opportunities to make sales. More sales are likely to happen if you can reach more people. So, it makes it easier for people who are trying to figure out "what is eCommerce" to build their first eCommerce business.
  We really believe that anyone can start an eCommerce business if they have the right tools. You don't have to quit your day job if you don't want to. We just think you should start something. Building an eCommerce business teaches you so many valuable lessons, and even if you're not quite ready to start your own full-fledged e-commerce business yet, there are still steps you can take to get something going! People who are starting their first eCommerce business often feel like they aren't good enough to run their own business. This is called "Imposter Syndrome." In spite of how you feel, you should start your own eCommerce business. When you start your own eCommerce business, it's not just about being successful or making a lot of money. It's about the journey of making something out of nothing and making something real out of ideas, resources, and inspiration.  

Pros and cons of opening your own E-commerce Business

    As your first step toward learning how to start an eCommerce business, you'll start to think about the pros and cons of eCommerce. In the beginning, you may have asked, "What is eCommerce?" but now you may be asking, "Is eCommerce worth it?" or "What are the pros of online shopping?" So, let's look at the pros and cons of starting an eCommerce business to help you decide if this is the right path for you.  

Pros of Opening Your Own Ecommerce Business

 
  • From nothing to something: With eCommerce, you can use ideas, knowledge, and inspiration to build your own business from the ground up. 
  • Making Money at Any Time: When it comes to eCommerce business, there are no set hours from 9 to 5. Any time of day or night, you can make money.
  • Getting in touch with your audience anywhere in the world: You don't have to sell to customers in just one area or region; you can sell to customers all over the world. 
  • Less overall cost: Depending on the business model you choose, you might not have to pay for rent, storage, or even employees in the early stages of your eCommerce business. 
  • Being Your Own Boss: When you start your own business, you can be your own boss and do whatever you want to make it happen. 
  • Selling Everywhere: You don't have to sell only in certain places. You can have a storefront business and an online business. You can also sell at pop-up shops, festivals, markets, shows, conferences, online marketplaces, etc. 
  • Working from Anywhere: You can work from anywhere and at any time as long as you have a wifi connection and have automated some of your systems and processes. 
  • Making it Your Full-Time Job or Part-Time Hobby: You don't have to put everything you have into your eCommerce business if you don't want to. It can be a side job. But you make the rules, so if you want to do it full-time and get out of the rat race, you can do that too.

Cons of Opening Your Own Ecommerce Business

 
  • No actual storefront: People who live nearby can bring you a lot of foot traffic if you have a storefront. Even though eCommerce is becoming more popular, most people still prefer to shop in person. 
  • No Face-to-Face Time with Your Customers: When customers come to your store, you can get to know them and build relationships with them. Even though it is possible to build relationships online, it takes a bit more time and works. 
  • Competition & Standing Out from the Crowd: There is a lot of competition online, and it can be hard to set your eCommerce businesses apart from others. If you want your e-commerce business to stand out from the rest, it needs to offer something that others don't, whether that's a service, selection, price, variety, brand, or something else. 
  • The Learning Curve: Starting a business, making a website, making a brand, building a customer base, etc. takes time and effort to learn how to do properly, so at first, it can be a bit of a learning curve. If you want to start learning about "What is eCommerce?" we suggest that you look online for reliable sources of information like our blog, the Shopify blog, and Skillshare.
 

How to Start Your Own Ecommerce Business?

    It's never been easier to start your own eCommerce business, which is great news if you're wondering, "What is eCommerce?" and want to start building your own eCommerce business as soon as possible. You can find a lot of information about what eCommerce is and how to start your own eCommerce business. Here are a few places that we think you should check out first:  
  • Look for a product idea: As you learn more about what eCommerce is, you'll quickly realize that to start an eCommerce business, you need something to sell. Affiliate marketing lets you sell physical or digital products, services, and even products from other brands. To get started, you might want to look at our post on "trending products" to see what people are buying most often right now.
  • Make a business plan: The next thing to do is to begin making a plan. When you're new to eCommerce, there may be some parts of building your eCommerce business that you don't know to think about. This One Page Ecommerce Business Plan was made to help new e-commerce entrepreneurs figure out the pros and cons of building their business, as well as other important things to think about when building an eCommerce business. 
  • Sign Up to an Ecommerce Platform: Once you've found a product to sell and thought carefully about how to run your business, the next step is to sign up for an eCommerce platform so you can start making your online store. When you sign up for an eCommerce platform like Shopify, you can choose your business name and domain name right away. Then, you can start making your website unique to your brand by choosing a theme, fonts, and colors. It's really easy, and it's fun to watch your website come together!
  Then, if you want to learn how to actually design the website for your eCommerce business, including how to choose a theme and brand, we suggest you check out these resources:  
  • Ecommerce Branding Guide: Build a great brand from the start so you can connect with your customers and get them interested in your eCommerce business. 
  • Ecommerce Website Designs: Check out what other eCommerce businesses do to make their websites not only look good but also work well for their customers. 
  • How to Think of a Name for Your Business: Your business name is probably the first thing people will hear about your brand, so you want it to tell them what to expect. 
  • Create a Beautiful Company Logo: Your logo is the face of your brand, so make sure it looks good and gives the right impression. 
  • The Best Shopify Themes: In the online world of today, people judge a website by its design, so you need to make sure that your store's theme matches the personality and values of your brand while still being functional and easy to use. With an eCommerce platform like Shopify, however, it's easy to make a beautiful and functional online store. All you have to do is look through the Shopify themes.
 

What kind of business can you start with e-commerce?

  You should stop asking yourself, "What is eCommerce?" and start asking, "What kind of eCommerce business can I start?" Since you've read this far, you already know that anyone can start their own eCommerce business and that anyone can be you. Basically, you can start any kind of online business you want as long as you:  
  • Have something you can sell to customers, like a physical product, a digital product, a service, or an affiliate link. If you don't have anything to sell yet, you can look through the Shopify App Store for dropshipping apps and wholesale apps to find things to sell for your eCommerce business. 
  • Have a place online where you can sell your product, like one of the eCommerce platforms we talked about earlier. You can use Shopify, BigCommerce, WooCommerce, or any other popular eCommerce website builder to build your online store.
  You can start your own eCommerce business as long as you have something to sell and a place to sell it.  

How to Find Products for Your Ecommerce Business?

    When you start your own eCommerce business, the next most important step will be to find products to sell. How you do this will depend a lot on the type of eCommerce business model you choose. There are 4 main ways to run an e-commerce business, and each one tells you how to get your products. You can:  
  • Create your products 
  • Manufacture your products 
  • Wholesale your products 
  • Dropship your products
 

Create Your Products

  If you decide to make your own products, it will be up to you to find all the materials you need to make them. The hardest part about making products for your eCommerce store is how long it takes, how expensive and hard it is to get the materials you need, and how hard it may be to grow your business if demand for your products goes up. Another problem with making your own products is that you don't know if they'll sell well before you make them. But if your hard work pays off, you'll be the only one who can sell that product, which will give your e-commerce business an edge over others.  

Manufacture Your Products

  If you decide to have your products made, you'll need to find a manufacturer who can make them. To do this, find a list of reputable manufacturers that can make a variety of products, or you could use a third-party manufacturer sourcing service like Sourcify to help you find the best supplier for your products. This will help you get your products as safely and securely as possible. The main benefit of working with manufacturers to make your products is that you can customize them and get them made exactly how you want them. It also helps you keep your costs low. But the biggest problem with working with a manufacturer is that you'll probably have to meet their minimum order quantities, which can be a big cost upfront.  

Wholesale Your Products

  If you buy your goods from wholesalers, you can buy them in large quantities without having to make them yourself. Check out online wholesale directories (like our Wholesale Suppliers Directory!) to find wholesalers that sell products you want to sell on your online store. You could also find wholesale products on AliExpress or these AliExpress Alternatives. You can also check out Handshake, which was made by Shopify and is a wholesale platform.  

Dropship Your Products

  Dropshipping may be the best business model for you if it seems hard to meet minimum order quantities upfront or if you just want the freedom of not having to store inventory or ship products. If you want to get products from dropshippers, your best bet is to look at an online dropshipping directory or a list of the best dropshipping apps that integrate directly with Shopify stores, if you decide to start one. One benefit of dropshipping businesses is that you can sell best-sellers quickly and when they are at their peak. The downside is that other businesses might be selling the same product as you, making the market more competitive.  

How much does it cost to open An Ecommerce Business?

    Any amount of money can be used to start an e-commerce business. As we talked about in the "What is Ecommerce?" section of this article, eCommerce businesses are so big and different that it's hard to describe them with anything other than the word "eCommerce." Since the person or people who start an eCommerce business are the only ones in charge of it, it can be built on any budget. If you're an entrepreneur starting your first eCommerce business and you only have a small budget, start a dropshipping business and pay attention to money-saving resources like blogs like Bootstrapping Ecommerce that help eCommerce businesses save money. Also, keep an eye out for discounts on services that will help you build, launch, and grow your business. In any other case, your budget will depend entirely on how much money you have and how you want to spend it. Work with an accountant or a bookkeeping team like Bench to keep track of your finances, and use tools like a Business Loan Calculator or a Profit Margin Calculator, to make sure you're keeping an eye on your budget where it matters most.  

How to Buy & Sell Ecommerce Businesses?

  If you don't want to start your own eCommerce business from scratch, you can buy eCommerce businesses that other entrepreneurs have put time, effort, and money into building up to where they are now. Shopify's Exchange Marketplace is the best place to look for online stores to buy. Exchange Marketplace is a place where Shopify store owners can list their businesses for sale or buy other Shopify businesses. The prices of the businesses for sale there vary based on their traffic, customer base, revenue, and other factors. If you want to start an eCommerce business and like the idea of not having to start from scratch, check out Exchange Marketplace and see what's for sale! No matter when you start your eCommerce business, though, you need to have a plan for how to get out of it. This way, you and any potential partners or investors will know what to do if and when the time comes to sell your business or shut it down. Having an exit strategy can also help you make better decisions about your business as it grows, and it can make investors more interested in joining your business.  

How to Grow Your Ecommerce Business?

    Once you've gotten past the "What is eCommerce?" stage and are building your eCommerce business, the last step is how to grow your eCommerce business. This is the step that will take up most of your time as your business grows and gets bigger. There are many ways to grow an e-commerce business, but traffic and conversions are two of the most important. The more people who visit your e-commerce store, the more likely it is that you will make conversions, which means you will make more money.  

Traffic + Conversions = Revenue & Profit!

  There are a lot of ways to get more people into your store. However, one of the best ways is to treat your customers like people, not like numbers. If you're too focused on the numbers and how much money you're making, you might lose sight of the most important part of your eCommerce business, which is your customers. Getting people to your store quickly is important when you're just starting out and trying to find your feet. But you should also think about how you can add value to your customers' lives so they're more likely to buy from your site again and tell their friends and social followers about your company. Partnering with influencers on platforms like TikTok is a quick way to get people to your e-commerce store and get people talking about your products or the launch of your store. When you work with the right influencer, your products can be positioned in a way that gets people excited about them and leads to a lot of sales. You can also use any social platform to run paid ads. Video ads tend to work better because they can be played over and over again, which keeps people interested. Once you start getting more traffic to your eCommerce store, your conversion rate should go up on its own.  

Conclusion

  You may have come to this article wondering, "What is eCommerce?" We hope that all of the information in this long post has helped you understand what eCommerce is and how you can start your own eCommerce business. Anyone can start an eCommerce business, so use the information, knowledge, resources, and guides in this article to get started on something for yourself. Now that you know "What is eCommerce?" you can build, launch, and grow your own eCommerce business and start your own journey as an entrepreneur.
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