eCommerce Definition

Everyone has heard of e-commerce. But what exactly is e-commerce, and how does it benefit small businesses? This guide walks through the essential things to know about e-commerce, including its advantages, potential pitfalls, and what entrepreneurs should consider when selling online.  

What is e-commerce?

The definition of e-commerce is simple: selling goods or services online. If an entrepreneur sells through their own company website, via marketplaces such as eBay or Amazon, or on any other digital platform, they’re engaging in e-commerce. 

Popular Marketplaces and E-Commerce Platforms

Websites that exist to facilitate online sales from different vendors (online sellers) on the same site are referred to as “marketplaces.” Some of the most popular e-commerce marketplaces include: 

• Amazon stores
• eBay
• Overstock
• Walmart.com

There are also hosting platforms that aren’t marketplaces themselves, but that enable business owners to create websites that support easy online shopping. These platforms typically offer templates for building websites that include product listings, shopping carts, live chat functionality, and similar features. Popular hosting platforms include: 

• Shopify
• Magento
• WooCommerce

E-Commerce Benefits

From reaching a larger target audience to selling wares 24/7, there are numerous reasons why e-commerce is a worthwhile endeavor for small businesses. 

Advantages of E-Commerce

Here are just a few advantages of e-commerce: 

• Reach a larger audience
• An entrepreneur’s products are available 24/7
  • (Online stores never close, so it’s possible to get the business of that shopper who likes to browse at 3 a.m.) 
• Create captivating product descriptions that entice shoppers to complete their purchase
• Lower costs to do business
  • (Lower startup costs, less overhead, no having to buy or rent sales space, reduced need to hire sales associates)
• Gain new customers with search engine visibility
• Serve niche markets
• Collect data on customer behavior and gain customer insights
• Quick go-to-market time
• Meet customers where they are
• Easier and less expensive branding / marketing
• Sell internationally
• Showcase best-sellers
• Create deals, coupon codes, etc. 
• Create a personalized shopping experience for your customers
• Encourage impulse buying

E-Commerce Disadvantages and Considerations

While e-commerce offers a huge range of benefits to sellers, there are also a few potential pitfalls to consider. They include: 

• No one can shop during site crashes. To counteract this, business owners need to ensure that the website is up and running at all times.
• Shipping times can vary. The COVID pandemic highlighted these variances. Smart business owners will ensure they’re aware of their carrier’s shipping times so they can provide their customers with accurate shipping estimates.
• It’s crucial to stay on top of inventory needs to meet customer demand. Business owners need to know what customers are and aren’t buying to adjust their inventory strategy accordingly.
• Customers can’t try items before they buy. To reduce the risks of returns, e-commerce business owners will need to provide detailed and accurate product descriptions. It’s important to sell high-quality items.
• E-commerce is highly competitive. There are lots of online sellers in today’s marketplace. To stand out, e-commerce entrepreneurs will need to engage in effective marketing practices, offering high-quality products, selling products at fair prices, and perhaps most importantly, providing stellar customer service.

Other Names for E-Commerce

A few other names for e-commerce include: 

• Online selling
• Selling online
• Digital commerce
• Social commerce
  • This is slightly different from e-commerce and involves selling or marketing via social media channels, such as Facebook, Instagram, and Twitter. 

E-Commerce Examples

From big websites such as BathAndBodyWorks.com to cosmetics sellers on Amazon.com, there are tons of e-commerce examples on the market today. 

Any business that sells goods online is an e-commerce seller. 

Recommended articles

• E-Commerce 101
• How Retail Has Changed: The Future of E-Commerce
• Six Steps For Adding ECommerce To Your Website
• Building An E-Commerce Website: The Role Of Domain Name And Hosting
• 4 Steps You Must Take to Launch a Successful eCommerce Store
• Guide To Starting An Electronics E-commerce Store

ZenBusiness Can Help

E-commerce is a booming industry that enables sellers to reach more customers, pay less overhead, and run their businesses more efficiently. However, online entrepreneurs also need to keep a handle on shipping times, make sure their websites are always up and running, and remain competitive with other sellers.  

For the entrepreneur who’s ready to launch their e-commerce venture, ZenBusiness is here to help. From their formation plans to worry-free compliance, they’ve got everything a business owner needs to start, run, and grow their new venture. Reach out today!