E-commerce is the exchange of goods or services over the internet. This term can be used to refer to the universe of online stores created by entrepreneurs, brands or businesses. Keep reading to learn everything about ecommerce: what it is, how and why to create yours.
It doesn’t matter if you write e-commerce, ecommerce, eCommerce or even if you prefer to say it in Spanish, . This term encompasses several concepts that we are going to explain in this article.
With the amount of information on the internet, it is normal that there are doubts about some terms that are used in the digital age. For example, when a person says that they work in a company that offers an e-commerce platform, many wonder what it means or what it is about.
If you want to start with your brand or business, we invite you to read this content to find out what e-commerce is and how to get the most out of it. Take note!
What is e-commerce and what does it mean?
Let’s go with an example. Do you remember the word “e-mail”? This term, which represents a service through which messages are sent over the internet, is a conjunction of two expressions in English:
e (electronic) + mail (mail)
Basically, the expression “email” is formed, a perfectly acceptable name for that resource. And with e-commerce the same thing happens:
e (electronic) + commerce (commerce)
From a semantic point of view, it is a translation for “electronic commerce”. As its name implies, this term refers to the commerce that evolved over time until the arrival of the internet.
The word e-commerce can be used to refer to that universe of online stores created by all kinds of entrepreneurs; from to brands, or large companies.
As for the use of this word on a day-to-day basis, it refers to the exchange of goods or services through the Internet.
Years ago, to buy a product or contract a service, it was necessary to go to a physical place. But that changed, mainly thanks to the evolution of the .
In the beginning, selling through the internet was only possible for a few. Having an e-commerce site was expensive and not very accessible for those who did not have a large budget to invest.
Nowadays, there are those who only sell under this modality, given that now having a physical location is usually more expensive and has more restrictions than a website.
To understand e-commerce, it is necessary to know how it works and identify the different types that exist. Keep reading and find out more!
How does e-commerce work?
E-commerce works thanks to a series of platforms or digital channels that facilitate transactions for the purchase of products or contracting services. Among these options, the creation of a personalized online store stands out.
In the case of Tiendanube, you can without having knowledge of web design or programming. The platform is intuitive, simple and adaptable to any type of business.
For example, you can create a virtual store in just a few steps and define the categories of your products or services, upload your own photos, publish your catalog and even keep track of your stock. In addition, you will have direct communication with your clients, generating credibility.
Throughout this process, your project will have the support of a technical team available to answer your questions or resolve any problems. At all times we prioritize accompanying your brand, because we value your time, we believe in your potential and we recognize your work.
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On the other hand, there are other channels that drive online sales and they are online markets. It is a type of multi-channel e-commerce in which different stores participate and display their products in a kind of virtual showcase.
It is usually a channel that is managed by a third party and works like a website that connects thousands of sellers and buyers. Among the most recognized platforms are Mercado Libre, OLX, Facebook and Dafiti.
Finally, there are sales through social networks, known as social selling. Over the years, both Twitter and Twitter left behind their “social” character and transformed. Nowadays, social networks also function as a bridge between entrepreneurs and consumers.
Dare to create your online store for free!
Types of electronic commerce
There are several ways to classify e-commerce, although we can divide them into two main categories:
- Due to the commercial profile, referring to the type of client to whom it is directed.
- Because of the business model, which is more related to how the exchange between seller and client is generated.
Next, we tell you a little more about each of them.
Types of e-commerce by business profile
B2B (Business-to-Business)
In this market, a company sells a product to another company or organization. Sometimes the buyer is the end customer, but can also resell the product to the consumer.
For example, a clothing store that buys merchandise wholesale and then sells it in its own e-commerce.
B2C (Business-to-Consumer)
In this case, a company sells its product or service to the final consumer. This is one of the most common models and the sales cycle is usually shorter than the rest.
An example of a B2C e-commerce is when a consumer buys shoes directly from the online store of the brand that produces them.
C2B (Consumer-to-Business)
In this model, the consumer sells a product to a company. A good example would be websites where they open a profile and share their resume or samples of their work, to offer their services to companies. He also falls into this category.
C2C (Consumer-to-Consumer)
In this type, a consumer sells a product to another consumer. Second-hand sales portals are the most common example of a C2C e-commerce.
Types of e-commerce by business model
Online store
When a brand that produces its own products, or offers a particular service through a personalized website, it is said that it has its own online store.
For this business model, it is common for SMEs to rely on , as they provide a quick and easy to implement solution.
💡 Tiendanube offers you one to encourage you to create your online store. Get to know our ecommerce platform!
drop shipping
On the client side, it might look the same as an online store. The big difference is that in the dropshipping model, the seller does not have a stock of products, but sends them through a third party.
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Marketplace
This is a store that hosts many small shops, the best known in Argentina is. The big difference between an online store and a marketplace is that, in the first, the brand has a website dedicated exclusively to it, thus reinforcing its image and positioning.
Another important point to distinguish these two types of e-commerce is that in marketplaces, payments and shipments are made through their platform and they usually charge a commission.
Affiliate e-commerce
Affiliate e-commerce is one in which the store does not send the product, but rather refers the customer and closes the sale through its platform.
It occurs when affiliate links are published, either within the contents of a blog, social networks or even through a campaign, recommending products or services, which lead to an external e-commerce.
When the transaction takes place, the owner of the site from which the sale was generated receives a commission.
Subscription e-commerce
This is an increasingly common model, as it refers to those products or services for which the customer pays a periodic subscription; Be it monthly, bimonthly, yearly, etc. An example of this would be the monthly subscription membership of Tiendanube.
Why is it worth selling online?
You already know what e-commerce is! Now you can understand a little more about all the possibilities offered by internet sales.
Instead of a physical location (or having both) are diverse:
- Your potential audience is larger because it’s not restricted to just people near a certain city or geographic area.
- It has lower maintenance costs, since to sell online it is not necessary to invest in rent, cleaning, equipment, decoration, etc.
- It offers more flexibility for day to day, you can be on the beach, in bed or in a bar and still work on your e-commerce selling and earning money.
- It is relatively safer, since you have a complete platform, with anti-fraud tools and a reliable company. Therefore, the integrity of your business and your finances is guaranteed.
Now that you know the different types of e-commerce that exist, let’s talk about how to make an e-commerce to start selling online, taking into account the following step by step:
1. Define the business idea
If you are still not clear about this step, there are several techniques to detect new business opportunities. All of these point to your main idea not only being limited to selling a product or a service, but also solving the problems of your target audience:
- Select the category of your business.
- Analyze who you are.
- Find out what the needs of your audience are through a .
- Find out what their tastes and preferences are.
- Create a product or service that relieves those “pain points” of your client.
- Choose one that represents the philosophy of your project.
2. Analyze business ideas
In the second step you will create your value proposition with the intention of projecting a reliable, secure and consistent image towards your prospects:
- Value proposition: does my product or service satisfy a need? Does it add value to the life of my potential buyer
- Market: is my product new? Does it have similar features to other products already on the market?
- Competitors: who are my closest competitors? What are you doing to serve the needs of my customers?
- Trend: Is my product in sufficient demand to launch it on the market?
- Analysis: Is my product consistent enough to overcome possible threats or challenges in the market?
💡 Pro Tip: To check search trends, we present you the . While, to evaluate the environment of your business, we invite you to read this article about the .
3. Establish a business model
In the next phase you have to establish a business model that supports your main idea and helps you launch it in a structured way:
- Ideal client: how are we going to get our client to…
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