E-Commerce: The Need of 21st Century
During the pandemic, e-commerce business has rapidly grown and given a big opportunity to entrepreneurs for setting their business
As we know that there is not much money required to start an e-commerce business in comparison with the physical shops. There are also some challenges for online businesses such as cyber threats & cart abandonments. Selling & buying articles over the internet has a new choice of the businesses & consumers.
What is E-commerce?
E-commerce is the method of selling goods & services over the internet. The customers come to various e-commerce websites or online marketplaces and buy products using the method of digital payments. After receiving the money the merchant provides the goods or services. It has been since the 1990s when Amazon sold only books, but today it is a multi-billion dollar company. It has also emerged rapidly during pandemic times.
Examples of E-Commerce Businesses
There are few examples listed below:
1. Online Retail: As we know that Amazon is the champion of the E-commerce businesses. You can get an online store off the ground through the partnerships of Amazon & E-bay.
2. Wholesale: One of the best wholesale E-commerce sites is Alibaba. While Alibaba does not get into the B2C domain.
3. Drop shipping: It is the process where another company handles a product for you. The company can create the space where the customer's order & the drop shipping company help in the placing of the order.
4. Subscription: These companies come in different shapes & sizes. Subscriptions can be for the automated replenishment of the goods.
5. Services: These are the easiest things that can be sold online like legal services, healthcare services, and hospitality services.
Types of E-commerce Business Models:
There are various e-commerce models based on what is sold and to whom. Three main E-commerce business models are given below:
1. Business to Consumer: B2C commerce is the most common online e-commerce and covers broad dimensions of the products. This type of business sells goods & services directly to the individual consumer. Examples Amazon, Netflix, Overstock, etc.
2. Business to Business: When a business sells its products or services to another business it is known as B2B commerce. These businesses can sell the products like office items, furniture, etc.
3. Marketplaces: E-commerce marketplaces refer to the websites where the third-party merchant can sell their products & services to the customers. Examples Walmart.com, Etsy.
Process of working of the E-commerce:
Process of the purchasing & selling remain same as of the physical store. The methods should be followed:
1. Accepting the order: Customer can place the order on the website of E-commerce.
2. Processing the Order: When the payment process is completed the sale is logged and the order is marked place. Payment transactions usually take place through the payment gateways.
3. Shipping the order: The last step of the process is the shipment and the businesses should ensure the proper delivery of goods.
Advantages of operating E-commerce businesses:
1. Less overhead costs as compared to the physical stores: As we know that opening a big retail physical store needs a lot of money & huge investments in rent etc. But in the case of E-commerce businesses you don’t have to pay the rent, electricity charges, etc.
2. Operation 24/7 without staff: As we know that the internet has no store hours and operates 24/7 without break. It also not requires staff as in the case of the physical stores.
3. Expansion of the businesses: In the case of physical stores there are limits that how many stores you can store but in the E-commerce business, there are no Limits on these issues. You can add or remove the products at any time.
4. Reaching large sections of the customers: Your businesses can be in any part of the world and you can sell the products anywhere. It helps in going through a greater number of customers.
Disadvantages of the E-commerce Businesses:
1. Frauds in the payment transactions: One of the biggest threats in running e-commerce businesses are fraud data thefts & payment obstructions happened to a lot of customers.
2. Reaching everyone is impossible: Even in these current situations, customers want to see & touch the products and not want to buy everything online.
3. Cutthroat competition: There are many competitors in the e-commerce industry and they always pose challenges for new companies.
4. Costs are also present: There are also costs in doing the E-commerce businesses like website management, inventory management, marketing of the products, internet costs, etc.
E-commerce businesses are very helpful for entrepreneurs who want to open businesses due to the low overhead costs, no physical requirements, etc. But there are some things to consider for both consumers as well as businesses like identity compromises, credit & debit card frauds, etc. Efficiently run e-commerce businesses can contribute to society as well as the needs of the consumers. We can say that E-commerce can change the upcoming business patterns in the world.
Edited By Team CLIQTAX
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