Definition of Ecommerce (or E-Commerce)

When You Sell Over the Internet, the World Is Your Marketplace

Ecommerce (or e-commerce) stands for Electronic Commerce. In electronic commerce, selling and buying are completed electronically over the Internet.

Even though selling and buying are completed over the Web, delivery might still have to proceed along traditional lines in the case of physical goods. However, for products like software and e-books, even delivery can be completed online, with the buyer being able to download the product immediately on purchase.

A website is the platform for e-commerce even though marketing can be done using emails also. Using a Web site, you can:

• Sell in distant markets as easily as a local market, or
• Restrict yourself to the local market, but reach a wider group including those who might find it inconvenient to come to your store

As hinted above, ecommerce involves setting up a website. This website would include:

• Marketing material to persuade prospective customers to buy from you
• Products catalog with descriptions, photographs and prices
• Shopping cart into which customers can put the items they select
• Payment facilities to accept payments from customers

You need to attend to a number of issues to make your ecommerce website to deliver results. We look at these issues now.

Get Ready to Target a Different Market

Let us start by comparing e-commerce with direct sales:

• As in direct sales, you are approaching the final consumer directly, instead of through a sales channel
• Unlike direct sales, however, you don't know the prospects you are approaching. Your website visitors are typically anonymous persons
• Without contact details, you cannot do any follow up of these anonymous prospects

You have to convince complete strangers, with whom you have no direct contact, that you are a trustworthy seller and that your product is a good bargain for them. And because you don't have any contact details for follow up, your website must "catch" the visitors on first contact (or get them to provide their contact details).

Above all, you have to promote your website so that it comes to the attention of your target group. Website promotion uses techniques that are different from conventional business promotion. We discuss Web Site Promotion in a different article.

Facilities for Selling Online

Though some "ecommerce" websites seek to focus on brand-building and/or getting the prospective customer contact you with an inquiry, most ecommerce websites incorporate facilities to provide a complete shopping experience online. These include:

• An online catalog presented in a manner that makes it absolutely easy to find the product a visitor is interested in (in addition to describing the product in a desire-inducing way)
• An online shopping basket into which selected items can be dropped (and removed if the customer so desires)
• A checkout section where the customer can see the items and their costs, and pay for them online using a credit card or facilities like PayPal.
• Customer care facilities such as an FAQ (Frequently Asked Questions - with Answers) section, a feedback or complaints form, contact details such as phone number or email address

The customer might also be offered the option to pay over the telephone or fax.

Shopping Cart

The online shopping basket takes the form of shopping cart software. This software will enable customers to browse the product information stored in a database (the online catalog), select the items they want and add it to their "shopping cart". The software will also typically allow customers to remove items from the cart before proceeding to checkout.

Accepting Payments over the Internet

Most small businesses can accept payments over the Internet by opening a business account with PayPal or Google Checkout. These are dependable agencies and an increasing number of prospective customers are beginning to use these channels of payment.

For accepting credit cards, you need to open a merchant account (a more expensive proposal) with a bank or utilize third party services by paying a higher charge for transactions.

Delivering Against Orders

You are accepting orders (and payments) remotely and cannot (except for downloadable products like software or remotely accessible services like Web hosting) deliver your product or service immediately. You therefore have to keep track of all pending orders and ensure that these are executed in time.

Accept orders only from customers to whom you can deliver your product within reasonable time. Non-delivery can not only land you in trouble; it could also result in bad publicity about your practices spreading quickly through forums and social networks on the Web.

Consider these issues carefully and make systematic arrangements to deliver against all the orders you accept.

Ecommerce for You

Now that you are familiar with the definition of ecommerce, and the issues involved, you will be able to appreciate that not all products are suitable for selling online. Consider the shipping costs, the need for personal inspection before buying and such business issues. Do these aspects permit online selling remotely? Can you make all needed arrangements to satisfy your customers, and allow returns if necessary?

Plan your e-commerce venture very carefully and in a detailed manner.

Return to Section Main Page How E-Commerce Benefits Small Business

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