E-commerce – Definition, Benefits, Types, Challenges, and More

E-commerce Definition

E-commerce allows you to buy and sell products on a global scale, twenty-four hours a day, without incurring the same overhead as you would running a brick and mortar store.

For the finest marketing mix and the best conversion rate, an e-commerce business must also have a physical presence; This is better known as a click and mortar shop.

What are the Benefits of E-commerce?

Starting an eCommerce business has not ever been easier. Solutions such as Shopify and WooCommerce let even the least tech-savvy create a store.

Gone the days when you hire a web designer and developer to get your e-commerce business off the ground are necessary.

Today’s design asana templates free and WYSIWYG systems allow people to launch an eCommerce store in a matter of minutes. As a result, people are gaining all the benefits that e-commerce stores have to offer.

Here are seven reasons why e-commerce is such an attractive option for entrepreneurs:

1. Global Reach

  • With a brick and mortar physical store, you are geographically limited to nearby markets, meaning if you have a store in New York and want to sell in New Jersey, you will need to open another physical location.
  • Electronic commerce does not have this limitation. In its place, you can sell to anyone, anywhere in the biosphere, through your digital e-commerce business.

2. Always Open

  • Physical businesses generally have limited hours, but an online e-commerce store remains “open” 24 hours a day, seven days a week, 365 days a year.
  • This is extremely convenient for the customer and an excellent opportunity for merchants.

3. Cost Savings

  • E-commerce businesses have significantly lower operating costs compared to brick-and-mortar stores.
  • There is no rent, no staff to rent and pay, and very little in terms of fixed operating costs.
  • This makes e-commerce stores extremely price competitive, generally increasing market share dramatically.

4. Automated Inventory Management

  • It’s much easier to automate inventory management by using online electronic tools and third-party vendors.
  • This has saved e-commerce companies billions of dollars in inventory and operating costs. Inventory management has also become increasingly sophisticated.
  • Now you can manage your stock across multiple channels with great ease. Therefore, you can sell and control your supply in your store, as well as in marketplaces such as eBay, Amazon, Etsy or a physical store.

5. Laser Targeted Marketing

  • Online merchants can collect a surprising amount of consumer data to ensure they target the right people for their crops.
  • This reduces the cost of client acquisition and allows online e-commerce businesses to remain extremely agile.
  • Imagine being able to target only men ages 18-24 who live in urban areas. That’s laser-centric marketing for you. There’s no way you can get that with just a physical store.

6. Niche Market Dominance

  • Due to lower operating costs, the aptitude to target your ideal customer and reach a global audience that an e-commerce website brings ensures your businesses’ profitability.

7. Location Independence

  • An eCommerce business owner is not tied to any location when running his business. As long as you have a processer and an internet connection, you can run your e-commerce business.

Types of E-commerce Merchants

Generally, there are two types of eCommerce merchants:

Those Selling Physical Products

  • This is self-explanatory. It is just the buying and selling of physical products through some electronic medium.
  • For example, you could be selling products from any of the following niches: fashion, accessories, household items, toys, etc.

Stores that Sell Digital Products (also Downloadable Products)

  • If you have ever purchased an online course, it falls under the category of ‘digital products’.
  • As a general rule, if you have to admit the product through an online members area or if you have to download it, it is probably a ‘digital product’.

What are the Challenges of E-commerce?

For the sake of balance, we thought we would introduce the potential pitfalls you may encounter during the infancy of your e-commerce journey. Trust is a big word in e-commerce, and it comes in many different forms.

A reliable payment solution like PayPal can help instil confidence in the people who visit your website. Using a review system like Trustpilot or registering your site as a Google Trusted Store are just a few of the ways you can conquer these potential barriers.

1. Technical Issues

  • If you’re not tech-minded, and let’s be honest, you don’t have to be to start an online store. You may run into the following issues:
  • If you can’t fix these issues, you may need to outsource.
  • Luckily, eCommerce solutions like Shopify, WooCommerce, and BigCommerce have dedicated services to help you if these issues arise.

2. Competitors

  • Since the initial setup costs related to starting an e-commerce commercial small, this makes for a saturated market.
  • Therefore, it is vitally significant that you do your research beforehand, launching and find your place.

3. No Physical Presence

Although this is improving over time, visitors cannot see or feel any of your products can be a disadvantage.

Here are some ways to fix this problem:

  • Offer free returns
  • Add high-resolution images.
  • Show customers using your products
  • Include videos of your products in use.
  • Include a full description of your products.

4. Startup Spend

The biggest test with e-commerce getting the start and making that all-important first sale.

To do so, you may have to spend a little money to get something done. Some profitable ways to get started include:

  • Running a Google Shopping campaign;
  • Use of website pop-ups for data collection;
  • Using abandoned emails;
  • Publishing a sales/update bar on your website;
  • Give away products to influencers for their advertising (you can identify them with tools like Buzzsumo).

Origin and Development of E-commerce

  • Electronic commerce is the last phase in the evolution of commerce, understood as the exchange of goods and services that have been taking place throughout history.
  • In the 70s, the first computers appeared and, with them, the first commercial relationships.
  • These foremost transactions offer very limited services such as purchase orders or invoices.
  • However, it was not till 1989 when the www (World Wide Web) create, which promoted the transmission of information worldwide.
  • Those are the web pages that we are now used to accessing.
  • During the 90s, the rise of electronic commerce began, as we know it today. At this time, the giants of the Amazon or eBay sector create.
  • In 1995, the G7 and G8 created a Global Market for SMEs to promote electronic commerce in this sector and give them the possibility of opening up to new markets.
  • In the 21st century, electronic commerce is one more integrated shopping method among consumers worldwide.
  • It carries out from different mobile devices, and web 2.0 and social networks help its dissemination and expansion.


Electronic commerce (popularly known as e-commerce) is the sale and distribution of goods and services through the internet or other computer networks.

It constitutes new support for commercial activity because it lacks materiality and physical guidelines (space and time) but gives it accessibility and speed so that transactions can carry out every day of the year at any time and anywhere in the world.

Also Read: License Agreement – Definition, Characteristics, and More

The Business Guardians

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The Business Guardians

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