No doubt that the evolution of the e-commerce industry has changed the outlook of the business. It has helped several companies to achieve their goals by changing the buying and selling patterns. There is hardly any business left that does not have an online store. Almost all companies have transformed their physical store into online stores. Just like any other business strategy, e-commerce has its benefits and challenges. In this article, we are going to break down everything about e-commerce that you must know before jumping into the industry:
What is e-Commerce?
E-Commerce or electronic commerce mainly refers to the complete process of buying and selling goods through the internet. It helps businesses to reach out to their potential audience without any limitation of geographical boundaries. It consists of all the activities involved in the purchasing process, such as choosing the products, making the payments, easy check out process, and other commercial activities that come under buying and selling of products and services.
Type of e-commerce models
Business to Consumer (B2C)
B2B is the most common e-commerce model. In this, a purchase takes place between the potential customer directly from the business. The best example is when a customer buys a specific item from the retailer.
Business to Business (B2B)
B2B is an e-commerce model that explains the relationship of business that purchases form other company. This is when a retailer or wholesaler buys directly from the manufacturer. When a wholesaler sells goods to the retailer, it will come under B2B.
Consumer to Consumer (C2C)
A C2C model refers to the purchase of products made between two customers. The C2C platforms are a lot in trend, such as eBay, Etsy, and Fiverr. Here customers interact with each other to purchase.
Customer to Business (C2B)
C2B is a prevalent e-commerce model these days. When a customer serves its products and services to the business, it comes under C2B. One of the few examples is photographers, journalists, and freelancers that need exposure from the industry by offering their services.
Business to Administration (B2A)
B2A refers to the exchange of products between business and administration. When a company deals with the administration using the internet, the business model will be referred to as the business administration. It is also known as the business to government model.
Consumer to Administration (C2A)
C2A refers to the transaction between consumers between administration using the internet. When a consumer makes a transaction to the administration for using their services, some of the significant examples of C2A include electricity bills, electronic tax filing, etc.
Advantages of an e-Commerce website to businesses
Wide Audience
The most important advantage of having an online store is the opportunity to attract a broad audience. Since there are no geographical restrictions on digital platforms, businesses get a chance to attract potential customers across the world.
Easy to purchase
Purchasing online becomes more accessible than ever with the evolution of the e-Commerce industry. The online stores give an advantage to the customers to choose and buy products from anywhere. Unlike the physical stores, where customers need to visit the store to buy a consequence of their choice from the range of items. The online store allows users to visit the site any time and choose from the items given on the website to buy what they like.
Low operational costs
Lower operational costs are the most significant advantage of an e-commerce website. That is the biggest reason why small-scale businesses find it worth trying for. Having a physical store requires a low operational expense such as rent, electricity, maintenance, repairs, inventory, etc. Having an online store will help you to get away with all the costs.
Time flexibility
Unlike the physical stores, where customers can reach you between 9 AM to 9 PM only, e-commerce gives you the flexibility to reach customers any time of the day. Online stores help your customers to purchase at their convenience without wasting their precious time.
Attract potential buyers
The biggest problem physical stores face is they waste a lot of time convincing customers who came for window shopping or looking for something they don’t offer. Online stores give an advantage to businesses to attract potential buyers to their websites.
Sell overseas
The significant advantage of an e-commerce website is making your business global. It offers an opportunity for the company to sell its product overseas quickly. One of the most prominent examples is Dropshipping. Dropshipping is a method of e-commerce that is primarily used by businesses.
Challenges of e-Commerce businesses
Cyber and data threats
Cyber security has become a significant threat for online businesses. Since the online world has become more vulnerable than ever, the need to have a safe and secure platform for the exchange of information is required. No one wants to share their data to a website that is not secure for their data. E-commerce websites need to stay active to save their website and data from all kinds of threats.
Identity verification
Do you know how the retailer or the business recognizes the user? It is crucial to verify the identity of the user before giving them access to the data. E-commerce businesses can use various methods to verify the identity of the person trying to access the data. There can be a lot of ways to verify the person, including generating a one-time password, AI recognition, biometrics, and two-factor authentication.
Attracting potential buyers
Customers have a range of choices online these days. If they are not satisfied with your products, they don’t invest a single minute in jumping to your competitor. Partnering with companies to attract potential buyers to your business is a must. If you don’t have the right strategy and skills to make your business visible to your potential buyers, you can’t make it a brand quickly.
User-friendly
As we have explained above that user- experience is the key to a successful e-commerce business. Just like any other business, e-commerce companies also focus on the consumer experience. Customers won’t buy a thing if they face any hurdles in the purchasing process. If the website gets redirected to any other page or an error appears while making a purchase, the buyer will leave the site immediately without buying.
Customer retention
It is observed that retaining an old customer is more complex than earning a new customer. Customer loyalty is the biggest concern for e-commerce businesses. Since there is a lot of competition on the digital platforms due to minor geographical limitations, retaining old customers is a significant concern for e-commerce businesses.
Strategies and analysis
Analyzing your competition and preparing strategies to attract customers is the biggest challenge of online businesses. It is believed that the less you promote your products, the more likely they will buy your products. A business needs to stand out from the crowd. How will a retailer ensure that the customer will purchase their products? E-commerce businesses need to offer something unique that the audience will turn into actual buyers.
Shipping charges
Shipping charges are the main concern for the audience. You must have observed that customers love free shipping. However, all e-commerce businesses can’t offer free shipping to their customers. But specific ways can bring down the shipping charges without incurring any losses to your business. Making your consumer buy a subscription and including offers to their orders are a great way to reduce shipping amounts.
Return and refund policies
Having a rigid return and refund policy makes your customer think twice before purchasing products from your business. Adding a “No refund policy” to your website creates a sense of doubt among the customers. Having a flexible return and refund policy by keeping your customer’s convenience in mind is essential to gain customers’ trust.
Mobile-friendly
What is the first thing you do when you hear about a product or want to buy something? Do you open a computer or your mobile phone to search for it? A large population on the internet is using mobile phones to make a purchase. It is a significant cause of concern for e-commerce businesses to create a mobile-friendly website for a better user experience.
Calls to Action (CTA) button
Nowadays, people are always in a hurry. They have no time to invest in a long process of purchasing. Adding a calls to action button to the special offers and sales will help users reach the place directly without wasting time. These small efforts do not only help in increasing the engagements but also the rate of purchasing.
Conclusion
Now you might have understood why you need an e-commerce website for your brick-and-mortar shop. Businesses cannot function in isolation. They cannot work without following the trend. The choice of customers has become uncertain. Their taste and preferences change from time to time. If you don’t follow the latest trend, you will soon be out of the game. Having an e-commerce website will make you gain customers’ trust and loyalty by making it a brand.