Experts predict 95 percent of business will be handled by e-commerce platforms in 2040. Here is a small business owner's guide to the basics of e-commerce.
The previous year has irrevocably changed how the world operates. The pandemic has forced consumers and businesses alike to rethink their strategies and enact tactics that would usher in new revenue while keeping customers and employees safe. One of the most successful methods for doing so is by developing e-commerce platforms. According to some expert estimates, there may be as many as 24 million e-commerce sites in the world.
But some small businesses may not be comfortable with the transition to the digital world. Most of this discomfort may stem from not knowing what e-commerce is exactly.
How does e-commerce differ from online shopping? What are the benefits of shifting to an e-commerce platform? Knowing the answers to these questions will help you become more comfortable with e-commerce and hopefully update your small business to the needs of the new reality.
What is E-Commerce?
E-commerce refers to conducting business through digital channels and platforms. Almost every aspect of commerce can be translated into digital formats. For example, Amazon, the largest e-commerce platform in the world, started as an online bookstore before expanding into the behemoth it is today.
Nearly every product and service available in the world can be found on e-commerce platforms. You can book tickets to Broadway performance,s like "The Book of Mormon" from across the country or you can set a virtual appointment with a finance and accounting firm on the other side of the world.
But e-commerce doesn't just cover consumer-to-business relationships. It covers all the major market segments such as business-to-business and even consumer-to-consumer. Business-to-business e-commerce transactions include providing services and products that will benefit business. For example, a website offering bulk order of construction supplies is an invaluable resource to an online construction service.
Most people have some degree of familiarity with consumer-to-consumer e-commerce. These business transactions involve people putting their belongings or products up for sale for other consumers. If you were to put an old collection of action figures up for auction on E-Bay, that still counts as a part of e-commerce.
However, some people tend to conflate the e-commerce with online shopping. How exactly are these two different?
What is the Difference Between E-Commerce and Online Shopping?
E-commerce is sometimes used interchangeably with online shopping and the mistake is understandable. But what exactly is the difference between these two terms? E-commerce is an umbrella term that covers all facets of business translated into a digital medium. For example, e-commerce includes banking transactions between a business's investors. It also includes checking inventory online and each step of the supply chain as documented or processed through electronic means.
Online shopping refers to the purchase of goods and services via digital medium. Whenever a customer orders pizza through their smartphone or books a session with a company on their website, that counts as online shopping. However, it is but one part of a larger whole. Understanding this is key to accepting that making a shift to e-commerce doesn't just mean putting your products up on the internet. It also involves a whole host of other processes.
It may sound overwhelming to shift all your processes into a digital-friendly configuration, but the benefits of such a change are worth it.
Why Shift to E-Commerce?
Many small businesses don't want to change to e-commerce because they find the process daunting. But such a change is fast becoming a necessity rather than an option.
According to experts, as many as 95 percent of all purchases will be aided in some capacity by e-commerce in as little as 20 years. However, making the shift comes with plenty of benefits that can help boost your enterprise.
- E-commerce helps small businesses expand their customer reach. Unlike marketing and selling through traditional means, the internet evens the playing field between businesses of all sizes. The right ad placed on the perfect social media page can do as much for your business as a television ad.
- E-commerce streamlines processes. Whether it's checking your supply chain status or arranging your small business's finances, you'll find that digitizing processes to be a great help. You can locate files in an instant and get update on the position of goods within seconds.
- E-commerce can help you remain competitive. Consumers have grown used to ordering their products from websites and apps. Already, more and more people are getting used to buying goods from e-commerce platforms than physical stores. Unless you make the change yourself, you'll find that your competitors will soon overtake you.
E-commerce is certainly the future of business, so you must not let it pass you by. Understanding the basics of e-commerce will help you seize this opportunity and secure your business's future prosperity.