What does ecommerce mean?
The buying and selling of produce and products by electronic means such as by mobile applications and the Internet. Ecommerce refers to both online retail as well as electronic transactions. Ecommerce has increased in popularity enormously in the last decades, and in ways, it is replacing traditional brick and mortar stores.
Ecommerce allows you to buy and sell products on a global scale, twenty-four hours a day without having the same overheads as you would in a brick and mortar store. For the best marketing mix and the best conversion rate, an Ecommerce venture will also have a physical presence, this business is known as a click and mortar store.
While most people think of ecommerce as the retail business to consumer (B2C) ecommerce, there are many other types of ecommerce. These include online auction sites, internet banking, online ticketing and reservations, and business to business (B2B) transactions. Recently, the growth of ecommerce has expanded to sales from mobile devices, which is known as mcommerce, and is simply a subset of ecommerce.
Ecommerce has seen explosive growth over the past decade, and there are very good reasons why this is true. As the internet becomes ingrained in our daily lives and routines, acceptance of ecommerce continues to grow, and businesses are taking advantage of this. Below are seven reasons that make ecommerce so attractive to entrepreneurs:
Global Reach – With physical brick and mortar stores you are limited geographically to reaching only the nearby markets. If you have a store in New York and want to also sell in New Jersey you’ll need to open more physical locations. Ecommerce doesn’t have this limitation. In fact, you can sell to anyone, anywhere in the world via an online ecommerce business.
Always Open – Physical businesses usually have limited hours, but an online ecommerce shop remains “open” 24 hours a day, seven days a week, 365 days a year. This is extremely convenient for customer and a great opportunity for merchants.
Cost Savings – Ecommerce business have significantly lower operating costs compared with physical shops. There is no rent, no staff to hire and pay, and very little in the way of fixed operating costs. This makes ecommerce business extremely competitive on price, which can increase market share dramatically.
Automated Inventory Management – It’s far easier to automate inventory management through the use of electronic online tools and third party vendors. This has been saving ecommerce businesses billions of dollars in inventory and operating costs.
Laser Targeted Marketing – Online merchants have the ability to collect an amazing amount of consumer data, and target just the right people for their products. This lowers the cost of customer acquisition, and allows online business to remain extremely agile. Imagine being able to target just males between 18-24 years old who live in urban areas. That’s laser targeted marketing.
Niche Market Dominance – Because of the lower operating costs, the ability to target your exact type of customer, and the global reach of an ecommerce site, niche product markets can be easily dominated, and extremely profitable.
Location Independence – An ecommerce business owner is not tied to any one location when running their business. As long as you have a laptop and an internet connection you are able to run your business.