E-Commerce

E-commerce, also known as electronic commerce, is the selling and buying of goods and services or the transmission of funds and data over an electronic network. It is primarily the internet. These business transactions occur either as business-to-business (B2B), business-to-consumer (B2C), consumer-to-consumer or consumer-to-business.

E-commerce and e–business are frequently used interchangeably. Sometimes, the term etail refers to online retail shopping’s transactional processes.

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The rapid growth of online retail has been aided by the widespread use of ecommerce platforms like Amazon and eBay over the past two decades. According to the U.S. Census Bureau, e-commerce was responsible for 5% of all retail sales in 2011. It had reached over 16% by 2020 after the COVID-19 pandemic.

E-Commerce: How It Works

The internet is the engine behind e-commerce. Customers can browse and place orders online for products or services.

The customer’s browser communicates with the server hosting the website as soon as the order has been placed. The order manager will relay data pertaining to the order to a central computer. The data will be sent to central computers that manage inventory levels, merchant systems that manage payment information using apps like PayPal, and bank computers. It will then return to the order manager. This is done to ensure that the order can be processed without affecting store inventory or customer funds.

The order manager will notify the store’s website once the order has been validated. The message will inform the customer that their order was successfully processed. The order manager will send the order data to warehouse or fulfillment to let them know that the product or service can now be shipped to the customer. The order manager will then send the order data to the warehouse or fulfillment department, letting it know that tangible or digital products can be dispatched to the customer or that access may be granted to a service.

Online marketplaces such as Amazon and software as a Service (SaaS), which allow customers to “rent”, online store infrastructures, or open-source tools that companies can manage with their own developers, are some examples of platforms that host ecommerce transactions.

Types of E-Commerce

There are three main types of e-commerce: business-to-business, business-to-consumer, and consumer-to-consumer.

B2B e-commerce is the electronic exchange between businesses, rather than between consumers and businesses. Online directories and product- and supply exchange websites are examples. These allow businesses to search for products, services, and information and then initiate transactions via e-procurement interfaces. In 2018, a Forrester report predicted that B2B ecommerce would account for 17% U.S. B2B sales.

B2C (Business-to-Consumer) refers to the retail side of e-commerce. This is where businesses sell products, information, or services directly to consumers. This term was popularized during the dotcom boom in the late 1990s when online sellers and retailers of goods were still a novelty.

There are many virtual shops and malls online that sell all kinds of consumer goods. Amazon is one of the most well-known examples. It is the market leader in B2C.

C2C (consumer-to-consumer) is an e-commerce model in which consumers exchange products, services, and information online. These transactions are usually conducted online through an intermediary that offers an online platform for the transaction.

C2C platforms include online auctions and classified ads. These platforms include Craigslist and EBay. Because eBay is a business, this form of e-commerce could also be called C2B2C — consumer-to-business-to-consumer. C2C transactions are also possible through platforms like Depop, a fashion reselling platform, and Facebook marketplace.

E-commerce does not only include these three. It also includes consumer-to-business (C2B), business-to-administration (B2A), consumer-to-administration (C2A), and mobile e-commerce (m-commerce).

Advantages of E-commerce

It’s why vendors such as Amazon prefer to do business online. They have some distinct advantages over their store-bound counterparts. It offers the greatest advantages: low costs, flexibility, speed, and high amounts of data.

  • Low prices

It is costly to open a store. Rent, furnishings, equipment, and hiring employees are all costs associated with opening a store. It will vary depending on the space required and the location you choose to open it. However, you can expect to spend at least a few thousand dollars upfront and continue to rent or pay ongoing expenses.

It is cheaper to open a business online. You’ll likely spend a few thousand dollars to code and build a website if you have customers and are looking to start a business online. You can also opt for a hosted solution if you are just starting out. This means that the website’s ecommerce functions have been built already and you only need to add your details. One popular option is Shopify. It charges between $30 and $180 per month to host an online store.

  • Flexibility

It takes time to open a brick-and-mortar store. It takes time to find the right space, go through the commercial leasing process and finally get the store up and running. This may require construction time or the time to decorate your space.

A hosted solution can make it easy to set up an e-commerce site in a matter of days. It will take longer to build a custom-designed website.

You can make changes to your product listings, display and marketing materials on an e-commerce website almost immediately. Brick-and-mortar stores require you to move items around physically, which takes much longer. E-commerce sites are extremely flexible, and can be adapted to changing needs and business demands.

E-commerce is also flexible. You can work anywhere you have an internet connection as the owner. You don’t even need an office; you can work remotely!

  • Data

2016 is the year of data. Every website we use collects tons of data about our browsing habits, the sites we visit and the products we buy. You can collect data about how customers use your website, such as how long they stay there, what they view, and how they make purchases. This gives you an insight into their motivations and what is stopping them from clicking “Buy”.

This information can be used to enhance the shopping experience of your visitors and increase the chances that they will become customers. It is much more difficult to find this information in a brick and mortar store. It’s not possible to keep track of every customer’s viewing habits or the time they spent with a product before purchasing it.

  • International Reach

Brick-and-mortar stores sell to customers who visit their physical locations. E-commerce allows businesses to sell to anyone with an internet connection. E-commerce can help expand a company’s customer base.

  • Product recommendations and personalization

E-commerce websites can track the browsing, search and purchase history of visitors. This data can be used to provide personalized product recommendations and gain insights into target markets. You can see examples in the Amazon product pages labeled, “Frequently bought together” or “Customers who also viewed this item.”

Limitations to e-commerce

  • Limited customer service

Customers can ask a clerk, cashier, or manager for assistance if they have any questions or problems in a physical shop. E-commerce stores can have limited customer service. The site may not offer support after hours and the online services options may be confusing or unanswerable.

  • Limited product experience

Although images can give you a sense of the product’s quality, it is not the same as trying the product on. E-commerce customers may end up purchasing products that are not what they expected and must return them. Sometimes, customers will have to pay shipping costs to return the item to the retailer. Augmented reality technology will allow customers to test and examine e-commerce products.

  • Wait time

Customers pay for the product in a shop and then take it home. Customers must wait until the product is shipped to them when shopping online. Shipping times are getting shorter as next-day or even same-day delivery become more common. However, they don’t always arrive immediately.

  • Security

Hackers are skilled enough to create websites that look authentic and claim to sell popular products. Instead, the website sends fake or imitative products to customers or steals their credit card information. Even legitimate e-commerce sites can be hacked, and customers may store credit card information to facilitate future purchases. Threat actors could steal credit card information from the retailer’s website if it is compromised. Reputation can be damaged if there is a data breach.

Essential Skills to become an expert in e-commerce

  1. Copywriting

A great copy can make all the difference in converting visitors into customers. This 20-hour bundle will teach you copywriting tips and tricks for all mediums.

  1. SEO

Although there are many ways to increase website traffic, few methods are as cost-effective and efficient as search engine optimization (SEO). This bundle will teach you how to optimize your website from both technical and practical perspectives to rank high for keywords that are most relevant to your business. Your site will soon be ranked high in Google search results.

  1. Facebook Marketing

Are you too busy to update your SEO strategy? Paid marketing is also an option. This bundle will show you how to leverage one of the largest advertising networks worldwide. This bundle includes everything you need to engage with your fans and create paid Facebook Ad campaigns.

  1. Graphic Design

Ecommerce is all about creativity. You need to stand out among the crowd with your marketing materials and store. This comprehensive bundle will teach you everything you need to know about Adobe Creative Cloud. It can help you boost your marketing and improve your website design.

  1. Email Marketing

Email is still the king of digital marketing. This 13-hour package will teach you how to cold-call, strategies, build an email list, as well as marketing skills to increase your sales.

  1. Google Analytics

Google Analytics is the most popular free web analytics platform. This powerful tool provides you with incredible insights into your website. You can see what visitors are seeing, what they’re buying and what they’re missing. This bundle will teach you how to use GA for valuable insights that can improve your website experience.

  1. Photographs of products

High-quality ecommerce websites need to have great imagery. Think of your favourite ecommerce websites. They all feature great imagery that tells a compelling tale. This bundle will teach you how to create beautiful photos and then edit them to suit your needs.

  1. Accounting

Your business will need money. But there is more. It’s worth learning accounting skills if you don’t know how to keep your books in order, forecast your financial future, and produce profit and loss statements. You will learn business accounting from a Certified Public Accountant.

  1. Project Management

Small businesses need to be efficient, especially in today’s crowded ecommerce market. This bundle will make it easier to release a new feature or improve your operations. This bundle includes crash courses in Six Sigma and Agile, Jira, as well as other essential project management skills.

  1. Microsoft Excel

Ecommerce businesses generate tons of data. This 90-hour package will teach you how to harness that data and make it useful. You’ll be able to organize data in Excel, dig into insights with Power BI and visualize with Tableau.

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