Ecommerce
What is e-commerce and what are its advantages?
Ecommerce, in its most common meaning, is a virtual store that sells from a website. More broadly, e-commerce is a buying and selling system that uses the Internet as a means to make sales, as well as to maintain close contact with its customers.
In reality, the evolution of e-commerce means that an online store’s sales no longer come only from its website: an e-commerce business also makes use of social networks and mobile apps, whether for direct sales or as a way to bring the target audience into a sales funnel.
1. Advantages of e-commerce
From the seller’s point of view, if we compare traditional sales through a physical store with e-commerce, selling through e-commerce offers several advantages, such as:
- Reduced costs.
- It allows you to reach a wider audience (global market).
- It provides autonomy and flexible hours.
- The investment required to open a business is lower.
- It makes it easy to have thousands of references accessible 24 hours a day, 7 days a week.
- It makes it very easy to scale the business as needed.
- Convenient customer segmentation.
- It lets you send them automated email marketing campaigns.
2. Ecommerce models
Depending on their business model, the following types of e-commerce can be found:
– With its own products. In this case, it is an online store that works very similarly to a physical store, managing its product stock, but selling exclusively online.
– Membership. This type of e-commerce is based on recurring sales through a periodic subscription model, an example of which is Spotify.
– Dropshipping. This type of e-commerce only takes the orders and invoices them; it then delegates logistics to the wholesaler, who delivers the order to the end customer.
– Marketplace. In this case, it is a store with a web platform where different sellers offer their products and pay a commission on each sale to the owner. An example of this is Amazon.
– Services. These are service-based e-commerce sites that sell products such as consulting or training, meaning they don’t sell physical products. An example of this would be Coursera.
3. Types of ecommerce
E-commerce sites can be classified based on the market or clientele they target. The most common are the following:
Business to Consumer (B2C)
This is the most common type, where the sale of products and services is done directly between a company and the consumer (end customer).
Business to Business (B2B)
These are companies that create products and services that they in turn sell to other companies.
Business to Government (B2G)
In this model, companies conduct their business operations with governments and public institutions through the use of the Internet.
Consumer to Business (C2B)
This business model is one in which the end user or consumer creates a product or service that is used to complete a business process and gain competitive advantage.
Consumer to Consumer (C2C)
It is the business model that facilitates trade between individuals, that is, one person sells or provides services to another person.