Over the years, the term E-commerce has become a popular term within the digital world. However, e-commerce is something that can confuse many people. So, in this article, we’ll tell you everything you need about this term. Thanks to it, you will know its goals, what makes it stand out from other terms, and learn the advantages and disadvantages of an e-commerce.
What is e-commerce?
E-commerce, also known as electronic commerce, comprises the online purchase and sale of products/services. Today is a popular term but its origin goes back to the 90s. Besides, as its name implies, it focuses on transactions through electronic means such as the Internet. Thus, an example of this can be data exchange.
Today, this word means much more than the exchange of products. It also encompasses other words and marketing strategies. Some of them are e-payment, e-logistics, among others.
Not only that, but this sector also has different specialties and branches. As an example, we have its use of technologies like m-commerce, which stands for online purchases through mobile devices. What’s more, it also uses many other strategies. Some of them are the management of the supply chain, digital marketing, transaction processing, and electronic data exchange.
Differences between e-commerce and e-business
Many companies and brands already have a space in the minds of customers. However, if you are starting and want to position yourself in the market, it is important to know the difference between the two terms. E-commerce and e-business should not be seen as the same.
The intention of them is to work with traditional marketing strategies. For this, they seek to provide more information. However, that’s not all since they also focus on promoting the company.
On the other hand, some companies still have doubts about approaching the digital world. As such, they prefer to convince visitors to contact them through traditional methods. Advantages and disadvantages of an e-commerce. A few of them are face-to-face visits or phone calls.
However, they are those who are simply unaware of the high number of recruitments tools that exist. So, it’s important to remember that every e-commerce site is different.
The main goal is always to close the deal with payment through digital means. Otherwise, we can’t talk about e-commerce.
What matters is that said exchange affects the income statement of any business. Something that then becomes a great generator of profit.
Thus, these types of sites include detailed information about products. This is because a user is more likely to buy something the more they know about it. This, of course, added to the level of trust and solvency that the website generates over time concerning the company.
Forms of electronic commerce
The world of e-commerce is very wide and you can find many different types of models:
- A more global one based on who sells and who buys.
- One with different e-commerce models.
According to the commercial profile
Each business has a type of client it wants to reach, and based on this we can classify them:
- B2B (Business-to-Business): Here, a company offers a service or product to another business.
- B2C (Business-to-Consumer): The most traditional and it happens when a company offers a product or service to a consumer.
- C2B (Consumer-to-Business): Consumers offer products and services to businesses.
- C2C (Consumer-to-Consumer): This is the type of commerce that facilitates the sale of some products or services to other consumers.
According to the business model
The online sector is still immature. Thus, technological changes are regular and new online businesses take care of the new needs. Depending on how a company generates its income or how the exchange between buyer and seller is carried out, we can divide it into:
- Online store with its own products: Advantages and disadvantages of an e-commerce. This is the first thing that comes to mind when talking about e-commerce. It has the same characteristics as a physical store but online.
- Dropshipping: Although this can be confused with e-commerce, it’s not the same. The difference is that the seller does not ship the product directly. In this case, a third party ships the product for you.
- Affiliate e-commerce: One step further back in the buying process are affiliate businesses. Here, the store not only doesn’t send the product, but the sale process itself isn’t done on its platform. What it does is refer the customer to another store, which pays you a commission when the sale is confirmed.
- Membership: This type of e-commerce looks for recurring purchases. The best way to get past customers to buy again is with a subscription. An example of this can be a box that is sent every month with products. Some of the most popular membership services are magazines, newspapers, or book memberships.
- Marketplace: This is a website that brings together different vendors that offer products with many or only one theme. We could say that these are the digital version of physical department stores. The main example of this is the company giant Amazon. Here, many companies and brands sell all kinds of products.
- Services: An e-commerce business doesn’t have to be only about selling products. You can offer different services and at the same time, keep generating income. For this, you could include courses, consultancies, mentors, or online courses. Thus, you have different options to choose from, the limit is the sky as they say.
How to promote your digital business?
The goal of a company is to increase its number of clients. This is something we already mentioned before but it’s important to highlight it. So, increasing turnover should be the main goal of every company.
Advertising on social media:
Advertising on social media is one of the most effective ways to promote a business on the internet.
Imagine that you have a local business and offer nutrition services.
You might want to reach people who are interested in nutrition, personal care, and fitness issues. Thus, thanks to the segmentation of your customers you can reach your target audience.
Social media is a very competitive place to start. However, it’s the best starting point to scale in the minds of consumers and customers.
For this, it’s best to create a strategy that suits your goals. Don’t forget that you must perform different analyses to understand the potential of your brand compared to others.
Besides, on social media, you can find a new place to promote your brand and your ideals. For them, you must create your own funnel and have a powerful lead magnet. What’s more, free consultancies or reviews are widely used in local businesses.
- Local SEO: The goal of Local SEO is to increase visibility based on a geographic area. With this strategy, you will be able to position yourself in searches. This consists of appearing in the first positions of Google for specific locations.
- Website: Currently there are still many companies that don’t have websites. This can mean a loss taking into account the benefits that the Internet can offer you. The main benefit of this is that with the help of a website, you can position yourself locally. Besides, you will also be able to earn the trust of the client.
The advantages of e-commerce
E-commerce is the hot topic of the moment. Thus, if you want your business to keep up with the new trends you must know these advantages. This way you will be able to increase your followers and customers.
Low financial cost
One of the benefits of digital commerce is that it doesn’t require a large investment to start the business. Unlike physical stores that must pay thousands of dollars just for rent. Besides having to invest upfront in things like store design and signage, buying inventory, sales teams, and more.
Similarly, physical stores must also employ personnel to work in different locations. Depending on the value of the products in the store, they may need to hire security personnel.
However, depending on the type of e-business you have, you may need to hire employees.
Once you have reached a certain level of growth, you can do it easily.
Potential income 24/7, Advantages and disadvantages of an e-commerce
One of the advantages of e-commerce is that online stores are always open, and with advertisements, you can attract someone at 11:00 pm or 04:00 am. Most physical stores are open from 09:00 am to 09:00 pm.
This means that having an online store open 24 hours a day can attract more customers than would normally buy your products in physical stores.
Similarly, shopping online can be very practical for people who do not have time to do so.
Also, you do not require employees to work the night shift to process the orders of your customers who buy during those hours. You also won’t need to hire a watchman.
E-commerce allows small brands to have a global reach and sell their products around the world.
To do this, you just have to discover where your audience is.
Segmenting is super important if you want to be successful.
Ease of display, Advantages and disadvantages of an e-commerce
You can design a physical store to attract people and invite them to buy certain products, but it is easier for buyers to find the best-selling products in an online store.
The reason is that these items have already been purchased by other buyers who were satisfied with their order.
All of this is what makes them more reliable and attractive to your customers.
So, if you want to present new products to your customers, you can include it in your marketing strategy.
Personalized online experience
You can personalize your users’ online shopping experience or segment your email list based on purchases made or location.
You can also reconnect with customers who have visited your store, showing them an ad for a product that they have forgotten in their cart.
Besides, if your store has a login feature, you can place a welcome message like “Hello (name).”
Not only that, but combo products also allow customers to buy more at a better price. You can also customize related and complementary products. All this according to the articles that the user has visited or that you think they might like.
Affordable employees, Advantages and disadvantages of an e-commerce
One of the main benefits of different businesses is the ease of obtaining cheaper labor.
That is, your employees’ pay may be cheaper if they are in a low-wage country.
Besides that thanks to the internet, you can work with people from all over the world. This may mean further globalization.
Another advantage is that an online store does not require the number of employees that a physical store needs.
Thus, you do not need to hire staff to launch the store. At first, you can run your digital commerce business by yourself.
Ease of remarketing
Targeting new advertisements to clients you want to reconnect with is very easy. To do this, you can use the applications to do remarketing of those users who visit your store but have not made a purchase.
You can implement this strategy when people add an item to the cart, but then abandon it, or visit a blog but don’t make the purchase.
You can also collect email addresses with an effective pop-up or lead magnet. With them, you can continue marketing your products once you have made the sale.
Getting multiple customers to make compulsive purchases is not a difficult task. For this, remember to include images with vibrant colors or human emotions and create ads that encourage the urge to buy.
You can also employ shortage tactics like countdown clocks or limited quantities of certain products.
It isn’t invasive, Advantages and disadvantages of an e-commerce
Some people suffer at the thought of walking into a physical store, as that forces them to interact with store employees.
Thus, many customers prefer to buy online.
In short, although they may receive information about promotions or get asked questions during the purchase process, it’s a much less invasive experience.
Another of the great benefits of e-commerce is that if a buyer wants to contact the store owner, they can use the live chat feature or send a direct message.
Greater access to customer information
Another great advantage of e-commerce is that you can easily access your customer information.
Of course, it should be used only to provide data to achieve segmentation more easily.
However, in digital commerce, you can get the customer’s name, shipping address, emails, and phone numbers. All of this means you have at least three different ways to communicate with them and cultivate a relationship.
To learn more about your customers you can ask them to fill out surveys. On the other hand, you can ask them to create an account to get even more information, which will allow you to offer them a better service.
Fast growth, Advantages and disadvantages of an e-commerce
Another benefit of digital commerce is that you can grow your business in a short time. For this, once you see that the ads are working well, you can increase your advertising budget.
For a physical store, you will probably need to remodel or find a larger space. So, if you work with informational products, you may find yourself facing an obstacle.
This is because, creating ebooks, courses, among others, takes time.
In physical stores, lines to pay can discourage people from buying. Contrary to online stores, customers can shop without queues and hassle. Which allows you to handle a large number of orders.
The disadvantages of e-commerce
Despite the great advantages that e-commerce has, not everything can be positive with digital strategies and some conditions apply. Therefore, we present some of the disadvantages that e-commerce currently has.
Possibility of a down page
One of the worst disadvantages of e-commerce is that no one can buy if your store page goes down.
That is why it is vital to ensure that your website is hosted on the correct platform. If you pay the lowest web server hosting fee and receive a spike in traffic from an ad, your page will most likely go down.
However, online stores weren’t the only ones affected.
Twitter, Spotify, Soundcloud, among others, were also affected by the flaw, which was resolved the same day. Nonetheless, failures on these servers are so rare that they are unlikely to cause problems for your business.
There is no possibility of a previous test, Advantages and disadvantages of an e-commerce
Although this is a current problem for many traders, it won’t be for much longer.
Thanks to augmented reality, many stores are beginning to implement this technology in their stores so that customers can test the product.
For different clients, these companies must offer them testing facilities.
This is when the well-known “if you don’t like it, we’ll give you your money back” comes into play. With this strategy, you can offer the consumer the same product with the possibility of testing, but without the commitment to keep it.
We know that the best niches are the most competitive. This is what attracts people to consider them when starting their business.
But the challenge should not be something to be afraid of, rather it can motivate you to work harder.
The more competitive a niche is, the more expensive the ads will be.
There are some ways to get around this hurdle. First, you can target a different audience than your competitors. If your customers receive information from your competition through Facebook ads then you can try to rank organically in web searches.
Not suitable for impatient customers, Advantages and disadvantages of an e-commerce
In a physical store, if a customer has a question, they can go to one of the vendors to answer their concern. However, in digital commerce, most businesses are slow to respond to their customers’ inquiries.
The reality is that most customers expect to get a response on social media within an hour.
If you take too long to answer them, they may be offended and go shopping elsewhere.
You need to be online constantly. For this, you can hire specialized people on different social media platforms. These experts are trained to keep customers happy.
Physical sales are still preferred
Another benefit of e-commerce is that you can grow your business in a short time.
Having an online store in its initial phase allows you to become a leader in your niche.
However, most of the money is generated in physical stores, which represents a major obstacle.
Hidden costs, Advantages and disadvantages of an e-commerce
When buying something, the consumer only knows the price of the product or service.
However, certain costs are not always projected in the initial shipment.
Thus, they are only shown on the payment invoice and this can demotivate the customer.
You have to be very careful with these hidden costs and be very clear with the client, otherwise, they may feel offended by the lack of honesty and they won’t recommend you.
Although in many cases product deliveries are relatively quick, different inconveniences that get out of the hands of the business can prevent product delivery.
Our advice is: specify the customer a delivery date that is longer than what you estimate.
Nonetheless, you can also offer express deliveries to the customer.
Privacy and security at stake, Advantages and disadvantages of an e-commerce
Nobody wants their personal and financial information to be seen by everyone.
Thus, it’s essential to research the site before buying it.
Know the place where you are going to buy your products and services.
So, although we know that it can be tedious, it’s important to read the conditions and terms of the page.
This way, you will know each of their data and customer knowledge policies.
BluCactus, your ally in digital marketing
BluCactus international marketing agency serves clients all over the world. Our specialty? The creation of web designs and SEO positioning in online searches. Besides, our group of experts is dedicated to helping businesses and brands succeed in one of the most competitive sectors in the market, the digital world.
BluCactus will accompany you every step that your brand takes. This goes from the creation of the branding of your business to the creation of content. Our focus is on supporting you with the development of your website or the administration of your accounts on social media.
This online marketing agency, based in Dallas, TX, seeks to strengthen your image as a brand and take it to the next level. Don’t wait any longer to have the help of the best specialists in digital marketing and contact us through our social media or website.
If you want to keep up with the world of digital marketing, we invite you to subscribe to our monthly newsletter.
Be the first to have all the best information!