Advantages of eCommerce. As ubiquitous as shopping online is today, it’s easy to forget that buying and selling products and services via the internet is not much older than the millennials who grew up in an eCommerce (shorthand for electronic commerce) world.
Reading the title of this article, the average millennial would most likely wonder why anyone would think it necessary to explain the advantages of eCommerce. From a consumer’s perspective, they’re probably right.
Who doesn’t enjoy shopping from the comfort of home? There’s no need to contend with traffic, find a parking place, or haul a bunch of bags into the house.Gone are the days of traveling from store to store to find the right item, in the right size or color, or calling store after store to see if they carry a particular item and find out how much it costs.
Is there any doubt that you’ll be able to find what you’re looking for somewhere online? No, any discussion of the advantages of eCommerce is primarily for the benefit of sellers, not buyers.
Forms of eCommerce
Though the image that first comes to mind for many when speaking of eCommerce is that of an individual shopping on a laptop or smartphone for a physical product or a needed service, this business-to-consumer or B2C sales process is not the only form of eCommerce. Some transactions are business-to-business (B2B), while others are consumer-to-consumer (C2C) or consumer-to-business (C2B).
And let’s not forget business-to-government (B2G) and government-to-business (G2B) eCommerce. The most common form of eCommerce is B2C retailing, otherwise known as e-tailing—businesses selling retail goods to consumers via the internet. And that is our focus here.
Advantages of B2C eCommerce
Merchants involved in B2C e-Commerce typically base their operations on a storefront business model and refer to their e-tail websites as online stores. When we speak of the advantages of something, it’s typically in comparison to something else. In this case the something is an online store and the something else is a traditional brick-and-mortar retail establishment.
Both the start-up and operating costs of an online store are usually lower for an online store, often much lower. There is no need to rent or build a retail space, pay a large staff, purchase store fixtures and equipment, or lay out a lot of money for a physical inventory (particularly if the e-tail business is based wholly or in part on third-party product sourcing and order fulfillment).
What an online store pays for the use of an eCommerce platform like Shopify pales in comparison to the monthly overhead of a physical store.
Online stores are open 24/7/365 compared to the limited schedule of most physical stores. Online store owners are earning sales revenues even while they sleep, and they’re not paying a night staff or worrying about store security.
In the world of eCommerce, even a small retailer has access to a worldwide audience of prospective customers. International customers account for a good percentage of those purchases that are made in the middle of the night because it’s always daytime somewhere.
4.Personalised Customer Experience
An online retailer can welcome customers by name upon login and personalise every customer interaction based on prior purchases and browsing history. Personalised upsell suggestions and reminders of abandoned cart items can boost the amount spent during each visit to the site.
5.More Impulse Purchases
It’s easier for online retailers to encourage impulse purchases by creating a perception of scarcity. For example, adding a countdown timer or showing the total number of units of a popular item that are still available can prompt shoppers to buy now while the product is still available.
6.Access to Customer Contact Data
People who are leery of providing personal information to a clerk in a physical store have no choice but to provide their name, mailing address, e-mail address and perhaps a phone number when making an online purchase or signing up for an account with an online retailer. All of these provide ways to reach out with targeted advertising, helpful information, or other offers that help develop a relationship and build your brand.
7.Ability to Dropship
Brick-and-mortar merchants don’t enjoy one of the major advantages of eCommerce—the ability to dropship. People shopping in their local mall, a neighborhood boutique, a big box store, or a shopping center expect to take their purchases home with them. That means those sellers have to keep a lot of inventory or hand or risk disappointing customers in an out-of-stock situation.
It also means they have to have a place to keep all of that merchandise and pay people to unload incoming shipments, restock shelves, and keep an eye out for shoplifters. People who shop online don’t expect their purchases to magically appear on their doorstep immediately after paying for them, so third party order fulfillment is an attractive option.
Online merchants who choose to use a third party order fulfillment provider purchase the items they sell and ship them to the order fulfillment provider. That third party stores the merchant’s inventory, processes orders, and then picks, packs, and ships good directly to customers.
Dropshipping takes this a step further, with the merchant typically selling goods shipped directly from the manufacturer to the customer. It eliminates all of the hassles of acquiring, storing, handling, packaging, and shipping physical products, and most popular eCommerce platforms accommodate third-party order fulfillment and sync inventory between a merchant and dropshippers to prevent overselling.
While traditional retailers need big marketing budgets or a terrific location to attract new shoppers, eCommerce makes it possible to get more people to visit an online store without having to spend a lot of money on advertising.
Online sellers can use the blog function built into most eCommerce platforms to post original content in the form of articles, reviews, videos, and the like that increases their visibility to search engines and drives traffic to their website.
Perhaps the biggest advantage of eCommerce, and the one that gives so many brick-and-mortar merchants the final push they need to venture online is the scalability of an online sales business.
First-time e-tailers can start on a small scale and run an online store on their own initially, and easily expand their operation Opening a second or third online store can be done much sooner and far more quickly and affordably than adding new physical retail locations.
All of the major eCommerce platforms enable merchants to sell through multiple channels from one centralised hub, for example selling from their own online store and on Amazon or eBay or Facebook, or all of them. Adding a new channel is usually a simple matter of a few clicks.
Clearly, there are many reasons why people choose to sell online why people choose to sell online.
Is Online Selling Right for You?
If the advantages of eCommerce are making you wonder if you have what it takes to succeed as an online merchant, you might want to do a little self-assessment before diving in headfirst.
Many people do quite well in online retailing without having much of a sales background, but there are some personal qualities that support success, some skills you should have or work on developing, and some things you should learn about eCommerce.
Business Skills/Knowledge Needed
You don’t need to be an expert in any or all of these areas, but you do need to have a basic understanding and recognize when you might need to consult an expert:
- Advertising and marketing
- Customer service
- Time Management
- Business planning
- Raising capital
- Website design
- Product sourcing
- Business Intelligence/Competitive Research
- Pricing Strategies (learn how to set eCommerce prices here)
- Search engine optimisation (SEO)
- Social media savvy
Successful online merchants tend to possess certain personality traits or characteristics that seem to help make them very good at what they do, most notably:
The same research, analysis, and planning goes into establishing any store, on terra firma or in the ether: uncovering a demand you can make money meeting, understanding who your customers are, creating business and marketing plans, and so on.
And there’s the usual legal stuff like selecting a business name and structure, registering the business, and getting yourself set up with the relevant tax authorities. Brick and mortar stores most often have a website, even if it’s not used as a sales platform. For an eCommerce business, acquiring a memorable domain name and building a website are, of course, mandatory.
There are some big decisions to be made, including which eCommerce platform to use, how your website will be hosted, which sales channels to start with, and much more.
Depending on your comfort and skill level when it comes to technology, you may want to seek some expert advice. If you’ll be launching your first online store, it’s usually a good idea to start small, learn on the job (so to speak), and grow as you go.
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