Selling products and services over the internet has become a staple of modern commerce. That shift is here to stay, presenting opportunities for small business owners to thrive online. But before you set up your internet shop, you have to understand how it all works.
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E-commerce is the process of selling goods and services online. Customers come to the website or online marketplace and purchase products using electronic payments. Upon receiving the money, the merchant ships the goods or provides the service.
E-commerce has been around since the early 1990s when Amazon just sold books. Today, it’s a multibillion-dollar industry. According to Statista, the U.S. e-commerce industry is expected to eclipse $1 trillion in value in 2024, making it a major economic staple for the national economy.
E-commerce works on the same principles as a physical store. Customers come into your e-commerce store, browse products and make a purchase. The big difference is they don’t have to get off their couch to do so, and your customer base isn’t limited to a specific geographic area or region.
Whether you’re selling running shoes or home supplies, you go through the same process when operating an e-commerce website:
To show how it works in action, here’s a look at a product’s journey when it is purchased online:
E-commerce transactions are similar to physical retail transactions in that customers come into your store, shop for products and check out. The difference is that it is done digitally and you have to ship the items to your customers.
To be successful at electronic commerce, you should have a comprehensive list of the products and services you sell on your website or marketplace page. The online shop should be easy to navigate, user-friendly and aesthetically appealing. It should also be optimized for mobile devices.
The checkout experience is another important aspect of e-commerce functionality. It is the process the customer goes through to buy your product or service. If your checkout process is clunky and cumbersome or requires too many steps, you may lose the sale. Shopping cart abandonment is a real phenomenon, with the Baymard Institute finding the average abandonment rate stands at nearly 70 percent.
There were lots of reasons to start an online retail business before the pandemic, and there are even more now. Here are seven of the main ones.
Though e-commerce has many benefits, it’s not without its challenges. Here are six to consider before you decide if an e-commerce business is right for you.
An e-commerce business can help you save money on overhead, expand your customer base and track sales, but it also has risks. Payment and data fraud, fierce competition, and discount-seeking consumers are ongoing challenges.
There are several different e-commerce business models, based on what is being sold and to whom. These are the three most common types.
Selling goods and services online can expand your customer base at a relatively low cost. For the price of building a website with an e-commerce store, a marketing and advertising budget, and basic inventory, you can begin selling right away. Whether you’re launching a startup or looking to expand an existing operation, e-commerce may be the sales channel you need to add to your business.
Tejas Vemparala contributed to this article. Some source interviews were conducted for a previous version of this article.
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What Is E-commerce? Everything You Need To Know About Selling Online – Business News Daily
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