June 14, 2023

What is E-Commerce Business: A Comprehensive Guide

What is E-Commerce Business

Table of Contents

What is e-commerce?

What is e-commerce and what is e-commerce business? The process of selling products and services through the Internet is known as e-commerce business. Customers visit the website or online marketplace and make purchases with electronic payments. The merchant sends the goods or offers the service after receiving the payment.

Electronic commerce has been around since the early 1990s, when Amazon only sold books, but it is now a multibillion-dollar industry, and it has grown even larger during the epidemic. According to Digital Commerce 360’s study of US Department of Commerce data, e-commerce expenditure in the first half of 2020 reached $347.26 billion, up 30% year over year. In comparison, e-commerce sales climbed by only 12.7% in the first six months of 2019.

It’s hardly unexpected. Consumers have become accustomed to purchasing everything from food to furnishings from Internet businesses since they have few other choices.

“We’re certainly seeing several studies that show folks are going to keep their new habits,” said Tory Brunker, director of product marketing at Adobe. “I truly believe this is our new normal.”

According to a McKinsey & Company study, certain online shopping categories, including over-the-counter medicine, groceries, home goods, and personal-care products, are expected to rise by more than 35%.

What is an e-commerce business website?

An e-commerce business website serves as your online marketplace. It makes the transaction between a buyer and vendor easier. It is the virtual arena where you display your items and online buyers make their purchases. Your website serves as your online business channel’s product shelves, sales crew, and cash register.

Businesses may develop their own commerce site on a dedicated domain, create a branded shop experience on Amazon, or do it all for a multi-channel strategy.

What is an e-commerce business?


ecommerce marketing strategy

An e-commerce business is one that makes money by selling items or services online. An e-commerce firm, for example, may sell software, clothing, housewares, or web design services. An e-commerce business can be managed from a single website or through many internet channels, such as social media and email.

How does an e-commerce business work?

E-commerce operates on the same principles as traditional retail. Customers visit your online store, peruse the items, and then make a purchase. The main distinction is that they don’t have to get up from their sofa, and your consumer base isn’t confined to a single geographic location or region.

When you manage an e-commerce business website, you go through the same process whether you’re selling running shoes or household supplies:

  • Take the order. The buyer orders from your website or e-commerce business platform. You will be notified once an order has been placed.
  • Complete the order. The money is then processed, the sale is recorded, and the order is stamped as complete. Payment transactions are often completed through a payment gateway, which may be thought of as the online counterpart of your cash register. 
  • Send out the order. Shipment is the final stage in the e-commerce process. If you want repeat customers, you must assure quick delivery. Customers are accustomed to receiving things within two days as a result of Amazon.

To demonstrate how it works in practice, consider the following product journey when purchased online:

  • A consumer visits your online store and looks over your items. She chooses a shirt. She selects the size and colour before adding it to her shopping basket.
  • The product is confirmed to be in stock by an order manager or order management software.
  • If the goods are in stock and the consumer is ready to proceed, she enters her credit card information and shipping information on your payment form or page.
  • The payment processor, which is usually a bank, validates that the consumer has enough cash or credit on her card to complete the purchase.
  • The consumer receives confirmation from the website that the transaction was successful. This all happens in a matter of seconds.
  • The order is dispatched after it has been dispatched from the warehouse. The customer will be notified through email when the product is ready for delivery.
  • The order has been delivered, and the transaction has been completed.

What features should an e-commerce business site have?

You should have a thorough list of the items and services you sell on your website or marketplace page if you want to be successful with electronic commerce. The online store should be simple to use, user-friendly, and visually appealing. It should also be mobile-friendly. According to Oberlo, an e-commerce platform, mobile commerce revenues are expected to reach $2.91 trillion in 2020 and $3.56 trillion in 2021. With so many people buying on mobile devices, optimizing your online business for them is crucial.

Another critical part of e-commerce operation is the checkout process. It is the procedure that a consumer follows in order to purchase your goods or service. If your checkout procedure is clumsy and time-consuming, or if there are too many stages, you may lose the transaction. Shopping cart abandonment is a genuine thing, with the Baymard Institute estimating that the average abandonment rate is 69.57%.

How to Start an ECommerce Business

The procedures for launching an e-commerce business may differ based on what you want to offer. If you sell services, for example, there is no need to maintain inventory or fulfilment. However, if you want to sell things online, inventory and fulfilment will almost certainly play an important role in your operations.

To get started, consider the following steps:

  • Investigate possible business ventures.
  • Check to see if the things you intend to offer are in high demand.
  • Plan how you will sell and send things to clients.
  • Discover suppliers and manufacturers.
  • Select which internet channels you will sell through (for example, an Amazon shop).
  • Make a website or an online storefront and add items.
  • Make a strategy for your fulfilment approach.
  • Begin by enticing clients with incentives.

What are the pros and cons of operating an e-commerce business?

Pros of running an e-commerce business

Before the pandemic, there were several reasons to launch an internet retail firm, and there are even more now. Here are seven of the most important.

  1. It has lower operating expenses than a physical store. The actual storefront is a significant cost of running a retail business. This includes money spent on rent, utilities, and other necessities. When you run an e-commerce shop, all of that goes away. There is no need to pay rent. You don’t have to bother about turning on the lights or paying to have the lawn mowed or the sidewalks shovelled.
  2. You can function without employees 24 hours a day, seven days a week. The internet has no store hours. It is operational 24 hours a day, seven days a week, and so is your e-commerce firm. Unlike a physical store with specific hours, your website may accept orders whenever your clients are ready to buy, thereby increasing sales. If you employ software to automate the majority of the procedure, you won’t need to hire a night shift ordering manager.
  3. Your company may grow on the go. When running a physical business, there are actually constraints to how many things you can carry – you only have so much shelf space. E-commerce has no such constraints; you can add and delete goods as you see fit.
  4. You can reach a larger number of clients. Your company may be based in New York, but if you have an online store, you may sell to people in California. “E-commerce changes the game for small businesses,” said Ben Richmond, Xero’s national manager in the United States. “Whether you live in a city or a small regional town, e-commerce allows you to live where you want and sell into many markets.”
  5. It’s simple to keep track of your sales and shipments. Logistics are crucial for e-commerce businesses. Because e-commerce is digital, it is simple to track sales and shipments. The advantage of having this information in real-time is that you can rapidly discover and correct any errors.
  6. It gathers client information. You collect a lot of consumer information when you sell things online, including addresses and emails. Additionally, you may learn more about their preferred methods of shopping. These insights may be used to target devoted clients with special offers and deals.
  7. It is eradicator-proof. Online companies were able to continue operating while brick-and-mortar firms were forced to close their doors due to the epidemic. As a result, customer purchasing patterns have changed, necessitating the operation of an online store by every business. With COVID-19, “I firmly believe that the benefits of operating an e-commerce business outweigh the drawbacks,” stated Richmond. Businesses must adapt as more customers switch their spending from traditional brick-and-mortar stores to online retailers.

Cons of running an e-commerce business

E-commerce business provides a lot of advantages, but it also has some drawbacks. Here are six things to think about before deciding whether or not to start an online store.

  1. Not everyone is reachable. There are still some consumers who just dislike online buying because they prefer to touch and examine items in person and because they are wary of online fraud, even in the midst of the epidemic. Oberlo estimates that 2.05 billion people will buy online in 2020, which is around 26% of the 7.8 billion people on the planet.
  2. Credit card and data fraud are widespread. The potential for fraud is one of the main issues with e-commerce. Numerous people are victimized by credit card fraud and identity theft each year. Hackers might inflict irreparable harm if they infiltrate your network and steal private consumer data. A hack costs a company $200,000 on average, and 60% of them close down within six months of the occurrence.
  3. Customers leave their shopping carts unattended. With the advent of e-commerce, consumers may more easily browse without necessarily intending to buy. Online sales are significantly impacted by shopping cart abandonment.
  4. When conducting business online, there are expenses. There are still expenses to take into account, such as website hosting and/or e-commerce platform fees, internet access charges, social media marketing, inventory management, storage, and shipping costs, even if you don’t have the overhead that traditional stores have. You must take into account all necessary taxes, business licenses, and laws, just like any other business owner.
  5. E-commerce is a competitive industry. You aren’t the first to offer a good or service online; depending on your niche, you can have a lot of rivals selling very similar or identical goods. You can find yourself in a pricing war since many customers base their purchasing decisions on price and anticipate finding fantastic bargains online.
  6. Customers desire a free, quick shipment. Physical merchants are not concerned with product packing or shipment. A store online does. Customers now anticipate not only two-day shipping but also free shipping, which you might not be able to afford to provide. This is because of Amazon.

Types of e-commerce business Models

ecommerce seo

E-commerce may take on as many shapes as there are online shopping options. The following are a few typical business models that affect the e-commerce business industry:

  • Business-to-consumer (B2C) directly is known as end users. the model with the greatest number of variants.
  • Business-to-business (B2B) transactions The buyer frequently sells things back to the customer.
  • C2B: business-to-consumer transactions. Customers are able to sell to other businesses through C2B firms.
  • Customers sell to other customers (C2C). Companies build online marketplaces that connect customers.
  • B2G: Selling to governments or government-related organizations.
  • Customers sell to governments or government organizations (C2G).
  • G2B: Selling to companies by governments or government organizations.
  • G2C: Selling to customers by governments or government organizations.

Examples of e-commerce businesses

Every day, online purchasing changes and evolves. People use computers, phones, tablets, and other gadgets to do their shopping. They use social media, support websites, and engage in active online communities. Here is an overview of three different e-commerce approaches used today.


Mobile commerce, sometimes referred to as “m-commerce,” is the practice of conducting online transactions using a mobile device. With so many people owning portable devices, it makes sense that m-commerce will represent over 43% of all retail e-commerce sales in 2023 (an increase of about 2% from 2022).

Nowadays, a lot of individuals use their phones to research products and make online purchases. It is crucial to optimize your online business for smartphones because this trend doesn’t appear to be slowing down.

Enterprise e-commerce

The purchasing and selling of goods to significant businesses or organizations is referred to as enterprise e-commerce. Enterprise e-commerce is something that a huge company engages in if it starts selling online and sells a variety of items or has many brand lines.

Social media e-commerce

You may reach a wide audience by marketing and promoting e-commerce shops through social media. Social media may help you connect with friends and family and can also help your business by bringing in new clients. When done correctly, social media marketing interacts with clients informally.

You may use social media to:

  • Entice new clients
  • Increase brand recognition
  • Make money online

What are the advantages and disadvantages of an e-commerce business?

Benefits of e-commerce

Online sales provide a number of important benefits. Among its greatest advantages, e-commerce:

  • Is expanding quickly
  • Enables easy online purchases and provides access to worldwide marketing
  • Features typically reduced operating costs
  • Provides access to consumers directly
  • These all provide compelling reasons to engage in online commerce

Challenges of e-commerce

  • Due to difficulties like these, some firms may try to avoid online trade
  • Limited face-to-face interaction Issues with technology
  • Data security difficulties with large-scale order shipment and fulfilment
  • Let’s go through each of these possible hazards one by one

E-commerce trends and statistics

E-commerce expansion

Over $265 billion in U.S. retail e-commerce sales were recorded in the third quarter of 2022, an increase of 3% from the second.

Seasonal sales

Amazon experienced its biggest Christmas shopping weekend ever in 2022. Over $1 billion was spent by customers worldwide between Thanksgiving and Cyber Monday at U.S. small companies that have selected Amazon as their e-commerce platform.

Amazon information

Sales for established brands that sell on Amazon increased by almost 25% in 2021. During the same year, more than 100,000 new brands joined Amazon in the United States.

Prime Day

The two days surrounding Prime Day in 2021 were the busiest ever for Amazon vendors. Customers also spent over $1.9 billion on more than 70 million goods in the two weeks before Prime Day, which represented a more than 100% year-over-year increase in sales compared to the Prime Day 2020 campaign.

Should I use a marketplace or a website for my e-commerce store?

How to make ecommerce website? You may either create your own website or sign up with an online marketplace like Amazon or Etsy to start your own online business. The best option will depend on whatever makes the most sense for your particular firm, with a key determinant being whether it is already established or just getting started.

According to Brunker, the best time to invest in opening your own business is if you already have a physical location. Selling things on Amazon and other marketplaces is a terrific initial step for people who aren’t ready to open an online business. It really depends on your objectives and what you want to accomplish.

ECommerce SEO Checklist: ECommerce Marketing Strategy

  • Select target keywords
  • On-Page SEO (i.e., meta description, page titles, heading, internally link, external link etc.)
  • Crawling and indexing
  • Resolve 4XX errors, 301 redirects, and duplicate content one type of technical seo
  • Crawl Budget
  • Page Experience and Performance
  • Site Architecture
  • Friendly URLs, Navigation, & Breadcrumbs

What are the best Shopify SEO tips?

Shopify SEO Checklist for Rank Higher for Shopify Stores

  1. Create a Site Hierarchy
  2. Use Data-Driven Keyword Research 
  3. Optimize Metadata
  4. Add Alt Text to Images
  5. Start a blog post 
  6. Incorporate Video and Engaging Media 
  7. Optimize Site Speed
  8. Improve User Experience 
  9. Optimize Product Pages and Descriptions 
  10. Optimize for Mobile 

Do I need a web designer for Shopify?

Since Shopify web designed with designers in mind, you can change all template files and assets using any text editor. You can test your new design at any moment by syncing your changes to your live store. All you need to start developing your website is a working knowledge of HTML and CSS.

Read More:

Which of the following would be an Ideal Goal for an SEO Plan?

Which SEO Plugin is Best for WordPress

What is API in Web Development?

15 SEO Tools for External Backlink Checker

Difference Between Long Tail and Short Tail Keywords in SEO

Frequently Asked Questions

Online purchasing and selling of products and services is known as e-commerce. Affiliate marketing strategies are also a possible part of the definition of an e-commerce firm. To increase online sales, you can leverage e-commerce platforms like your own website, a well-known retailer like Amazon, or social media. Some e-commerce companies run entirely online, while others utilize it to supplement brick-and-mortar stores or expand well-known brands.

An online store employs technological means to market and sell goods and services to clients. E-commerce companies might just operate online, or they can also have a physical location. Online retailers often need a website or digital storefront, as well as a means of accepting payments electronically, shipping products to customers, and collecting customer data.

You may use a variety of methods known as e-commerce marketing to push clients toward goods and services that are offered online. For instance, social media marketing may be used to draw customers to an online business. Alternatively, you may market items using paid product listing advertising (PLAs) if you’re using an e-commerce system like Amazon. This article on e-commerce marketing strategies explains more.

According to statistics, the highest increases in online sales happen between 8 and 9 p.m. on Mondays and Thursdays. Seasonal promotions and special days like Prime Day can also cause sales to increase. The largest shopping weekend ever took place on Thanksgiving and Cyber Monday in 2022, with consumers purchasing hundreds of millions of items globally and helping small companies make over $1 billion in sales in the USA.

Online purchases are made by an estimated 2.14 billion individuals globally, and e-commerce sales have been gradually increasing. To put things in context, 9.4% or so of retail purchases were made online in 2018. 14.3% of all retail sales are anticipated to be digital by 2022 (source). Over 3.9 billion items were sold by American vendors on Amazon in 2021. In terms of sales per seller, that works out to 7,500 every minute on average.

E-commerce Search engine optimization (SEO) is a free way to increase the visibility of your website on search engine results pages (SERPs).

Yes, online sales increased by 32% in 2020 and are projected to reach $6 trillion globally in 2023, accounting for 22% of all retail sales (source). More than 100,000 American brands joined Amazon’s shop in 2021, and sales for already-established brands increased by 25% from the previous year.

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