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What is Ecommerce?

todd snively

What is ecommerce? Although ecommerce is a broad term, it can be used to refer to a wide range of industries. Some examples of ecommerce are Dropshipping, Consumer to Business, and Subscription. Ecommerce can also refer to other sectors such as retail, subscriptions, and online shopping. Read on if you are interested in starting your own ecommerce business. The following are some common terms you may hear about:

Dropshipping

Dropshipping, when done correctly, can be a great option for ecommerce retailers who are just starting out with a store on their own website. In addition to providing you with a product line, dropshipping also provides you with access to an effective Product Information Management) PIM solution, which can be a powerful tool for maintaining and updating product and stock information.

ecommerce dropshipping

There is a litany of issues with dropshipping, the way most folks roll it out, but the main one is canceled orders.  Even if you are working with a supplier that is giving you a live inventory feed to keep the quantities updated in your store, that inventory is not “reserved” for you.  It’s available to every other seller out there with access to the same feed you’re using.

This means if you are promoting products that have a low available quantity, chances are excellent that when you receive an order, your drop shipper will be out of stock and you will be forced to issue a refund upsetting not only your customer but potentially your credit card processor.

Dropshipping on Amazon

Amazon is a very popular US shopping marketplace. Its reputation for being a trustworthy place to do business has made it a popular choice for both buyers and sellers. Dropshipping from Amazon is a great feature, when done correctly, despite being a competitive eCommerce platform. It is important to keep in mind that Amazon’s drop shipping terms of service could conflict with those of other ecommerce platforms and could even hamper your business’s profits.  Knowing exactly what is allowed, and what is not allowed and doing only those things that are allowed, will help provide your business with some longevity.

Companies selling dropshipping services make a dropshipping business sound like an easy way to manage your inventory. Now, dropshipping can be a better option than having to run a warehouse or hire employees. The products are shipped directly to your customers by a third-party provider, and you don’t even see them! This type of business model is popular with multi-brand retailers with many product categories. Dropshipping makes inventory management easier and more convenient for these businesses.

Another big advantage of dropshipping in ecommerce is its ease of use. Compared to selling your own items, you don’t have to worry about sourcing or manufacturing. With dropshipping, your suppliers handle everything from production to shipping, so all you have to do is concentrate on marketing and customer service.

The Amazon Code

This big issue with Amazon dropshipping is that due to the high order cancellation rate in dropshipping, your Amazon selling account will be quickly suspended once your order cancellation rate exceeds four percent.

So, what’s the best way to do dropshipping on Amazon?

Specialize.

Specialize in a single, heavy, expensive, high margin set of products and most importantly, enter into a distribution agreement with the brand or manufacturer.

Let me give you an example.

I had someone come up to me once and say they had a source for solar-powered heated water troughs.  They can look like this:

dropshipping water troughs

If you can’t tell by the picture, they are large, heavy, and expensive (especially to ship).

Can you imagine ordering up ten or more of these, storing them in your garage, and then shipping them off one by one when an order comes in?  No, that’s crazy.

What you do is approach the brand/manufacturer and ask them to ship units to your customers when you obtain an order.

That is, drum roll please, DROPSHIPPING!

But, in this case, you have a formal agreement with the FACTORY to sell to you at wholesale prices, and ship to the customer, and now all you need to do is find the customers.  Could you sell this on Amazon?  Sure, 100%.  You’d do that through the Fulfilled by Merchant (FBM) program as opposed to sending inventory into an Amazon distribution warehouse for them to ship out Fulfilled by Amazon (FBA).

But, the best way is to do something like this through your own website.

Subscription e-commerce

One of the main factors driving subscription ecommerce markets is the rapid growth of online shopping. Online shopping offers convenience, lower travel costs, expanded market space, and lower overhead. Subscription e-commerce is a preferred option for customers due to its ease of use, extensive product information, availability across multiple products and lack of crowds. Therefore, it is expected to grow rapidly in the coming years. The TBRC’s report about the global subscription ecommerce market includes an analysis of COVID-19 which is the upcoming law that will impact the ecommerce industry.

Subscription e-commerce can reduce abandoned cart rates and provide a hassle-free shopping experience. In 2021, abandoned cart rates were on average 75 percent

With the help of subscription e-commerce, companies can tailor their offerings to meet the changing needs of their customers. Rather than offering one-off product samples, subscription-based companies can offer different pricing plans and packaging options. Subscriptions allow companies to run A/B tests to determine the best pricing and packaging options. Moreover, it fosters customer loyalty and retention and enables companies to run A/B tests. Subscription e-commerce is a great option if you are looking to increase revenue and retain customers.

Another key advantage of subscription e-commerce is its predictability. Businesses can predict revenue, sales, inventory, subscribers, and other factors in advance. This makes it easier to manage stock. The business can focus on its core competency – providing value-packed products and services. One-time customers are more profitable than subscription customers. In fact, subscribers are 217% more profitable than one-time buyers.

Consumer-to-business

Consumer to Business (C2B) ecommerce is the sale of products and services between businesses and their customers. It often happens through marketplaces such as eBay and Amazon, where businesses purchase products and services from consumers. Sometimes, consumers also offer their services or create content for businesses. An example is when an advertising company might purchase stock photos or content from a social influencer and then resell that product or service to others.

One of my most successful C2B businesses (though some will argue it’s really Business to Business (B2B)) was when I was able to open an account with a large pest control distribution company.  I was quickly selling professional pest control products to both large and small extermination companies.  I had what they needed at a competitive price and our customer service was amazing!

The main difference between consumer-to-business (C2B) ecommerce and traditional ecommerce is that the business setting is reversed. Organizations sell to consumers and create value, rather than a traditional business structure. The business then uses that value to engage in processes and gain a competitive advantage. This model offers many benefits for consumers and companies.

amazon pest control products

Consumer-to-business (C2B) ecommerce is a growing category of ecommerce. It is often referred to as an online marketplace such as eBay and Etsy. Crowdsourcing campaigns are also possible, where individuals sell products and services to businesses. Affiliate marketing can also be included. It is not as simple as you might think.

As a business owner, it’s important to understand what types of ecommerce are right for your business. There are two main types of ecommerce: traditional eCommerce and modern. While traditional eCommerce is in widespread use, modern eCommerce is just beginning to gain ground and may even dominate the market in the future. It is important to note that the two types of eCommerce have some key differences.

Online shopping

The internet allows you to shop online from your computer, tablet, smartphone, or other smart devices. Ecommerce can be used to purchase almost any product, and sometimes even replace brick-and-mortar stores. However, some businesses have both types of stores. Here are four of the most common types of ecommerce. In the United States, most consumers use laptops to shop online, but more are buying items from mobile devices as well.

Teleshopping was one of the first forms of online shopping. This was a way to purchase products from far away. Although it was successful for B2B transactions it didn’t catch on with consumers. It wasn’t until the 1990s that Minitel, a free computer network, allowed internet users to connect to each other. The popularity of ecommerce was further cemented when a COVID-related virus spread around the world.

Ecommerce has grown into a booming industry, with 242 million Chinese residents using the Internet to make purchases. However, it is important to keep in mind that many of these customers are low-income and cannot afford expensive Internet access. These numbers are only a fraction of China’s total population. And in this context, the advantages of ecommerce are significant for both consumers and businesses. What makes ecommerce so valuable?

While shopping over the Internet is convenient, it can also pose a number of risks. It can lead to identity theft, faulty goods, and the accumulation spyware. Credit card information is not encrypted and can be accessed by unauthorized persons. Large online corporations are constantly advancing the technology to protect consumers against fraud, and criminals are responding to this progress by inventing new ways to steal their personal information.

Mobile commerce

Mobile commerce is a rapidly growing sector of ecommerce. This rapidly expanding industry enables businesses to reach customers where they are most active and engaged – on their mobile devices. Mobile commerce is also called mobile shopping. This trend is characterized by responsive designs, lightning-fast page speeds, and mobile-friendly sites.

While many businesses have realized that mobile commerce is more cost-effective than launching a dedicated mobile site, there are still many challenges that can come with it. For example, many mobile users do not have a computer at their fingertips. Therefore, mobile commerce can help businesses expand into new markets. Also, in certain regions, mobile network access is more widespread than traditional Internet access. Mobile commerce offers many advantages over traditional ecommerce.mobile ecommerce

Another advantage of mobile commerce is its ability to lower marketing expenses. Businesses can use this data to better understand their customers and their buying habits. This information will allow businesses to create more customized and efficient outcomes. They can also leverage social media podiums and discount promotions. They will also be able to better understand their customers’ preferences, so they can tailor their offerings to their needs. Ultimately, mobile commerce is a smart choice for any business.

Mobile banking is now easier than ever. Many mobile applications are easy to use and record your actions. In addition, mobile payment solutions have replaced the need for physical cash. They make shopping easier and more secure, which is a plus for businesses. Mobile commerce is becoming more lucrative because of the lower risk of fraud.

Is Making Money Online with Ecommerce for You?

I will tell you one thing, it’s not for everyone.

There are some very cool aspects, like being able to work on a laptop.  This usually brings to mind those laptop lifestyle images of working on the beach or by the pool.  Do people even do that?  I certainly have, but having said that, I’ll quickly say that I much prefer working in my home office than on the beach.  Sand is real, and laptops hate sand.

todd snively

I’ve lived on the beach in Puerto Rico and not one time did I take my laptop over to the beach.  I had too much respect for my laptop.  As much as I loved the ocean and beach, it was more for walking than working.  I actually spent much more time in the pool than in the ocean, mainly because I hate jellyfish.  My wife and I were stung a couple of times and thus, why we spent all our time in the pool.  I’ve actually done some great work in the pool.

Buying something low and selling it high is a business model that has been around since the dawn of man.  In the last twenty years, we’ve seen it move online and now we have an e-commerce model to create profits.  Can anyone do it?  Yes and no.

Why no?

Because the reason someone would fail with an e-commerce business is the same reason they’d fail with ANY BUSINESS.

THEMSELVES!

I’ve seen folks that I would put good money on who couldn’t properly tie their shoes if asked.  Then I find out they make millions selling stuff online and I have to revise my thinking.  Now, I never judge anyone, but I stand by my premise that it’s the person that is usually the failure point, not the business plan that’s been proven over and over again.

I understand that I’ve rambled a bit in this article, but, that’s what I do.  No rules for this guy!

Please put any questions, comments, or unkind words in the comment box below.  I read them all, even the ones from the turd monkeys.

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5 thoughts on “What is Ecommerce?”

  1. Thank you for clarifying what ecommerce is and that there are actually several types of ecommerce one can get involved in. I always thought ecommerce was just buying or shopping online, but now realise there is much more to it. 

    Dropshipping has become a popular way of starting an ecommerce business, but a lot still depends on the reliability and quality of your supplier. Do you think subscription ecommerce is easier for a beginner than dropshipping?

  2. I have been searching for ways on how to make money online. And dropshipping just seems perfect or me. I like that there are many ways to do eCommerce. But I would like to follow the same model that Amazon has implemented. Jeff Bezos business has always impressed me. Thanks for this helpful post.

    1. Thank you for your thoughtful comment.

      Interestingly, Jeff Bezos admitted in a letter to shareholders that sellers like myself do a much better job at sourcing, maintaining inventory levels, etc. than Amazon.  This prompted Amazon to begin phasing out of direct vendor relationships and to begin servicing us third-party sellers at a higher level.

  3. This is an informative article about e-commerce. I have always wanted to venture into dropshipping but I have not fully understood how it works. Some information I gathered online insinuates it can be a very expensive form of business for a beginner and that I have to pay the platform monthly. Confusing to me.

    My question is how can someone who already has a website start dropshipping?

    1. There are so many ways to monetize an existing site with dropship offers.  One way is to create a subdomain such as shop.yoursite.com and then load it up with products that others will fulfill for you.  I do this quite often with print on demand products specific to the website’s niche.  I am actually working on this right now for this site.  You can see the work in progress at https://swag.studyingecommerce.com

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