What Does E-commerce Mean: A Quick Definition

Picture this - you walk into the largest store you’ve ever seen. At first glance, it’s filled with endless rows of shelves, drawers, and tables, all holding a limitless array of objects. From clothes to food to electronics, anything you could ever desire sits right in front of you, just an arm's length away.

Now take away the physical aspect and consider the Internet as that massive expanse of a store. Instead of buying the objects in person, you buy them online. The same thing goes for when you want to sell your items. All exchanges are wholly digital. It’s a trade of goods or services or a buying and selling of things online. That’s e-commerce, in a nutshell.

In this article, we'll cover from understanding how e-commerce works and building your website, to making it standout from the competition and growing your business.

How Does E-commerce Work

Sticking to our store analogy; e-commerce works a lot like the physical purchase of goods. Except when it comes to buying and selling, these transactions take place through a variety of systems. One of these is called the electronic funds’ transfer, which has to do with the actual act of money transfer online.

The digital trade is split into four core areas: Business to Business, Consumer to Business, Business to Consumer, and, Consumer to Consumer.

  • Business to Business, or B2BThis type of trade involves when only businesses sell and trade with one another.
  • Consumer to Business, or C2BYou could define C2B as when a consumer sells something to a business.
  • Business to Consumer, or B2CThis one would fall into the category of when a company sells its product or services to the public.
  • Consumer to Consumer, or C2C - eBay, anyone? Online forums and consumer-led marketplaces exemplify the C2C e-commerce model. C2C fits for when a customer sells their things digitally.

Supported by electronic business, e-commerce is widely considered as an “advanced,” version of business transactions.

Coming up with Great E-commerce Business Ideas

Here is one of the hardest parts. You want to innovate and find a way to stand out in the marketplace. But - so does everyone else. The way to make sure you can generate a strong business idea is a go-to method used by some successful entrepreneurs. We’ll call it: the evaluation, and the validation. Mostly, do a lot of research. Validate that the idea is worth your while, before pushing all of your investment, time, and innovation into it.

E-commerce Business Ideas: Unique Selling Proposition

You first need to settle on your niche; as in, a space where there are not too many competitors compared to the amount of demand. You ideally want your brand to have a shot at owning the area. Here’s where you’d need to ask yourself: does someone else already do this, and do it well? Why should a customer buy from me? If you can’t answer those questions with an honest response, you may need to rethink your niche idea.

E-commerce Business Ideas: Consider the Industry’s Barriers to Entry

So, you’ve done the hardest part, and now that all of that research and brainstorming has led to you a brilliant, unique e-commerce idea, you’re ready to start planning particulars. What will be some likely challenges you’ll come across?

Probably the largest one is the single biggest influencer to the success of your business - the customer. You’ll need to make sure that your product offering, and how you market it, attract the right consumers. To do that, you’ll be required to identify where your audience is, and the most effective ways to reach them.

Another critical barrier is the retention of the customer. Any experienced marketing specialist will tell you that the more expensive venture is one where you are depending on attracting new customers, versus keeping old ones. This point is where customer lifetime value plays in, and your business model should incorporate successful tactics for customer retention.

Raising Money for Your E-commerce Business Ideas

Of course, you can’t discuss starting any business without talking about funding. Back in 2014, Entrepreneur did an analysis infographic on start-up funding and found that about 82% of companies were self-funded. Otherwise known as bootstrapping, the pros of this method of financing is that there is no need to cut investors into any profits.

Another standard way to raise funds for an e-commerce business is through venture capitalists. They are always looking to invest in startups that demonstrate real promise for profit. Along with VC’s, you can also search for angel investors or private lenders.

Going down an alternative route, you can look to raise funds through crowdfunding. This method is rapidly growing on its way to becoming the top source of funding for start-ups. A highly popular method for raising money, this is a pronounced way to establish brand awareness early on.

Thanks to the magic of modern manufacturing, there’s now another option available to you for bootstrapping: dropshipping. Dropshipping involves working with a manufacturer to create an agreement where the product is manufactured only after a consumer places an order. This means you never have to buy and hold inventory: you just wait for an order to come in, then use the funds to pay the manufacturer to produce the good. Dropshipping used to be prohibitively expensive, but manufacturing is so cheap these days that there are companies devoted to dropshipping a wide range of consumer goods. This is a great way to get your e-commerce site up and running with very little capital investment.

How to Build an E-commerce Website the Hard Way: Without Support

There are a lot of different ways in which you can go about building an e-commerce website. If you’ve decided to tackle making your website, know that a tricky road lies ahead. Some of the more successful e-commerce businesses suggest going at it via a multi-pronged approach. The most significant piece of advice you’ll find? Make sure to have plenty of time on your hands to develop a clean website with a good UX.

Say you need to move forward without hiring an external development company. Some key stages are the following:

  1.    Domain

Things kick off fairly easy. Securing a domain name is a simple, first step towards building an e-commerce website. We recommend jumping on GoDaddy.com and buying your unique domain there.

  1.    Find a Developer

Here is when things get a bit more complicated. You need to make sure the developer you hire is someone with a strong track record of similar websites on their CV, and it needs to be someone who you are confident will deliver. Take your time at this stage to thoroughly check out the candidates, before selecting.

  1.    Paperwork

There’s a ton of legal considerations you’ll need to sort out before moving forward with building the website. Things like vendor’s licenses and legal business issues need to be obtained and adequately reviewed. To make sure you don’t come across any future problems, it’s probably best to hire an attorney to help with everything legality concerned.

  1.    Platforms

If you’re going at it without support, you’ll want to choose a popular e-commerce website hosting platform; i.e., 3dcart or WooCommerce. The more well-known the platform is, the more likely that most developers are already familiar with using it.

  1.    Themes

Use an existing theme for the website so that you don’t spend ages creating your own. ThemeForest is a great website that has thousands to choose from. All it will take is a few dollars of investment, and just like that, you’ve got a brand-new website template!

  1.    Going Live

Even though you probably have the bare bones of the website drawn up, go live before you even start adding products for purchase. Why? Mainly, this move will allow you to begin building SEO, which is a must for any new e-commerce business.  

  1.    Press Releases

You’ve probably heard the famous Bill Gates quote; “If I were down to my last dollar, I would spend it on public relations.” Build up a trusted media contact, and someone who is a bit of an industry expert, who can help give you a leg up in the industry. Press releases are everything to building up brand awareness, exposure and increasing your SEO.

  1.    Get Personal

Any entrepreneur knows that a personalized connection can make all the difference when you’re trying to launch into a competitive market. Make a point to get to know the media reps behind the websites you’re trying to get commercial exposure with. Go past a LinkedIn connection or email; pick up the phone and give them a call. Give a face and personality to your brand, so that they want to help promote you.

  1.    Payment

One of the core foundations of any e-commerce business is its payment gateway. It’s probably likely you’ll want to accept payments by credit card or mobile payment and to do that you’ll need to gain approval for a payment gateway and credit card processor. This stage will probably take a long time because there’s a lot of paperwork and steps you need to make to get the final green light for your site.  

  1.    SEO

Going back to our tip about going live ahead of time, let’s talk a little about SEO. You should start ramping up your online presence as soon as possible, ideally far ahead of when you are ready to launch the store. Some even recommend as far as a year in advance (if you have the luxury of time).

How to Build an E-commerce Website the Easy Way: With Support

You want your brand to give a remarkable first impression, and these days you can’t achieve that without the baseline of any e-commerce website - an easy to use, well-designed user experience.

The best, and easiest, way to build an ecommerce website is with the help of professionals who know what they're doing. We specialize in this at Rootstrap, and we’re able to offer both development of the website and growth user acquisition if you’re looking to scale your store. The beauty of going with an external developer is that it saves you time and guarantees a quality product, but without funding, it may not always be on the table as an option.

How to Make an E-commerce Website Stand Out

Aside from making sure your offering is niche, there are a few other notable things you can do to stand out amongst the fray of e-commerce sites. Social media is one of them. If you work to engage and grow your audience on sites like Twitter, Instagram, and Facebook, you will see a form of brand awareness - and eventual loyalty - arise.

Another strategy to make your offering pop out in a crowd is to write stellar copy. Especially with the millennial take-over these days, it’s important to make sure your online voice is representative of a company that people want to buy from. By incorporating spunky, fresh copy into your website, the brand will read like a real person, and this could make you a big hit with your target audience. Make them want to shop with you!

How to Grow Your Startup E-commerce Business

After getting your e-commerce site up and running, the next step is all about growing the business. Your first instinct may be to just try to acquire more customers, but never forget that it’s easier to sell to previous customers than gain new ones. After all, growth in revenue is just as valuable as growth in the customer base! Here are a few tips for growing your e-commerce business:

  1.    Upsell and Cross-sell

Know your customer and identify their lifecycle early on. A move like this is guaranteed to help you in innovating ways to pre-emptively upsell existing products based on past purchases, as well as push value of related products in a strong cross-sell. Depending on your business model and website, you can enticingly automate these value propositions.

  1.    Invest in Social

Be prepared to drop some cash to see real results. Social drives sales and that’s a necessary combination to remember in e-commerce.

  1.    Creativity is Key

Go the extra mile and invest the time into showing off your brand’s flair. Take quality photographs that advertise your products. Put that human ingredient into the site text. And don’t forget to optimize for SEO.

How an E-commerce App Could Help Your Business

When it comes to e-commerce, there are massive benefits of a mobile app. It can introduce aspects like a broader reach to target audiences, increased growth in customer loyalty, and in turn higher profits. The growing prevalence of apps in general means that a website store is only going to work for so long. Building a mobile app is a step that we believe all e-commerce businesses should take to see continued business growth.

Starting an e-commerce business is challenging, but it can be extremely rewarding. With the tools and knowledge base available to you online, it’s possible to start an e-commerce site from scratch and grow it into a highly profitable business. So what are you waiting for? Create a 3dcart account and get selling!


Free report: The Real Cost of Running a Shopify Store