What is Ecommerce and Its Mechanism?
Knowing what is ecommerce might be the most basic knowledge for a marketer in the modern age. Without a clear knowledge about this, a marketer will not be able to conduct their marketing activities in a strategic manner. Learning the types and mechanisms is pivotal.
What is E-commerce Simple Definition?
To simplify, e-commerce can be defined as a transaction (buying and selling items) that happens on the internet. Electronic devices such as desktop computers, smartphones, and tablets aid the transaction process. E-commerce shops operate just like a physical store.
To understand what is ecommerce, you need to know that there are several important components in the e-commerce activity. These components determine the business’s operations and success:
● Product supply
● A good warehouse system
● Shipping operation and policy
● Relationship management between seller-customer
● Product catalog on website or social media account
Some people are still left wondering about What is ecommerce and how does it work? In this type of market, customers choose products from online catalogs. They make virtual payments to the seller through various payment options.
When conducting the transaction, the buyer will inform the seller about the shipping address. After the transaction is complete, the goods would be delivered to their address. Mailing service becomes a crucial part in ecommerce.
What is ecommerce and examples? For example, you are purchasing a pair of shoes from Amazon. The workers there will pack the purchased product. A mega marketplace like Amazon has its own warehouse. Then, the product will be shipped to your address.
3 Categories of E-commerce
E-commerce is differentiated into several categories. The basis for this differentiation is the business model applied by e-commerce. What are the 3 types of e-commerce? The following points should be able to answer your question:
1. C2C or Consumer to Consumer
This ecommerce system relies on interaction between consumers. It mostly involves trading goods, whether with money or other goods. The product stock is limited, there might even be only one product available. Etsy and Craigslist are marketplaces that offer this C2C system.
2. B2C or Business to Consumer
What is ecommerce with a B2C system? It is an ecommerce model in which the business interacts directly with its consumers. The consumers are purchasing their chosen product from the business. Business might make the goods themself or source the goods from others.
3. B2B or Business to Business
In this system, business interacts with another business. It does not sell goods to direct users of the products, instead to other businesses that will offer the goods to consumers. As an example, a clothing manufacturer sells clothes to retail shops.
Ecommerce is a platform where these market actors can conduct transactions in the most efficient way. Without doubt, safety becomes the main concern when it comes to non face-to-face transactions. However, there are safety measures taken to protect users.
The Advantages of Ecommerce for the Business
When it was first introduced, some people were wary about e-commerce. Thus, not many people were participating in it. However, these days, it is almost imperative to participate in ecommerce if you want your business to soar.
What is ecommerce doing to the business? Here is the explanation of its advantages in business’s growth:
1. Quick Shop Setup
In ecommerce, there is no need to make the shop presentable before welcoming customers. Everything can happen in a few clicks of your device. It is a very practical way to run a business as it cuts down that preparation time.
2. Low Starting Cost
The starting cost for creating an online shop is very low. You only need a handy device, product, and shipment tools. There is no need to prepare many stocks at the beginning of your business too.
3. Promotion of the Business
Ecommerce is a part of marketing strategy as well. You can implement various tactics in social media or the ecommerce website to make the business stand out against the competitors.
4. Easy to Gather Data
It is ultimately easier to gather data when you are participating in ecommerce. Quantitative data is recorded by the system. It can provide insights about your business.
5. Reaching New Market
To boost sales, broadening the target market is important. Ecommerce can help you achieve that. It helps the business reach people who otherwise will not interact with the business at all.
Understanding what is ecommerce and how it helps the business is important. It is a great era to start a business but at the same time also very tough. You need to navigate the way around it.