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What is e-commerce ?
Definition, types of e-commerce and where the advantages of online commerce lie.
What is e-commerce? – In this video, we explain to you what types of e-commerce there are , what the advantages of online commerce are compared to stationary offline commerce and what makes a successful e-commerce company.
What is e-commerce ? - definition of this term
This episode is aimed at those who are reading the term e-commerce for the very first time or who want to start trading online now but don’t quite know what it takes and what’s actually behind it. That’s what we’re here for, to give you a little insight into the world of e-commerce.
Broadly speaking, the term e-commerce refers to online trading. The “E” stands for electronic and commerce can be translated into German as trade, i.e. all sectors that belong to electronic commerce.Perhaps you are now asking yourself: “How can there be more than eBay and Amazon? Indeed. Let’s get you familiar with the types of e-commerce.
Types of e-commerce - The B2C and B2B trade
Since you probably already work with e.g. Amazon, let’s build on that for a change. If you were to order a book from this marketplace, it would be a classic example of B2C – that is, business to consumer commerce. You are the consumer and order from a retailer. However, if you were running your own business and needed raw materials to produce your tools, then you would be a separate business with different tax requirements, so it would be business-to-business commerce or B2B for short.
What is e-commerce ? - The C2C and A2C trade
In addition to the two most common branches, trade can of course also take place between consumer and consumer, as is the case on eBay classifieds, among other places – thus C2C trade also counts as e-commerce.
In addition, there is the communication and business relationship between companies, i.e. businesses and authorities, which is known as business-to-administration. That is, this sector includes all the company’s relations with public-law institutions, which then includes online tax processingcan count on. What goes one way also goes the other – administration-to-consumer is the area of interaction between the public administration entity and the end customers. That is, this branch serves to simplify the administrative work. The customer can download forms and applications from theplatform to their computer and submit the completed forms electronically to the appropriate administration. Again, an example would be the processing of online tax returns.
The A2A and B2E Commerce - Two types of e-commerce
However, various administrative authorities are also digitally networked with each other to ensure quick and easy form and data reconciliation. At least in theory. Accordingly, this area is called A2A. The last form is called B2E or Business-to-Employee and ensures the communication between the employee and e.g. the company. the company’s IT system. If this person is in the field, B2E measures can ensure that this employee also has access to customer and product data that would otherwise only be possible in the company’s intranet, i.e. only directly at the location.
What is e-commerce ? - Summary
This may not really concern you, but it does show that the field of e-commerce now extends well beyond Amazon and eBay.
In the B2C sector alone, there are strong variations in how you have to proceed as an online retailer. If you sell on marketplaces you have to use a different strategy than if you want to build your own online store. If you want to know more about this, we link you to our video “How to become an online retailer”, in which we show you everything you need to know if you want to set up your own online store.
So let’s keep in mind that the term “e-commerce” is a collective term for business on the Internet. This includes the simple e-mail inquiry about opening hours and the provision of the digital invoice just as much as ordering a coffee machine in the online store. Consequently, digital commerce also gives rise to advantages and disadvantages compared with traditional offline commerce. Let us now take a brief look at these.
What are advantages of e-commerce?
On the one hand, the permanent availability is clearly a strong aspect – that you can really order something 24-7 and are not bound to classic opening hours. In addition, this form of trade simply fits in with globalization and has probably made it possible in the first place. If you also build up your online business efficiently and with a strategy and possibly also rely on an agency that knows from the outset which steps and measures are necessary to scale your business and then to withstand the scaling that occurs, you will save time and money in the long run.
I would like to give you a little insight into how this is possible in practice. The big keyword here is automation.
The basis of online sales are the products. If you are a small retailer with 20 products, for example. the setting of the products no problem. But now you scale and have 100 products at once. You see it running and you don’t want to sell only on Amazon because the marketplace fees are too high for you. That’s why you now want to offer your products on marketplaces like OTTO Market, Crowdfox, ManuManu or Kaufland.de. Sure, you can re-post your products everywhere, but that eats up one thing above all – time. Therefore, the solution here would be to use an ERP or enterprise resource planning system. You can bring your already maintained data – with correspondingly high product data quality – from Amazon into the system and distribute it from there to the individual stores with the appropriate middleware. This would enable you to reach new customers internationally, you would only have to maintain the product data once and you could therefore benefit from digitalization. The automation aspect in particular is a clear advantage over classic offline retailing.
Challenges of online trading
Accordingly, the possible location disadvantage that contributes to equal opportunities is also eliminated. This means that even small companies have the chance to gain visibility, if the necessary online marketing measures are used.
But are there also disadvantages?
Of course, there are also challenges associated with digitization. IT systems need maintenance. Updates have to be made, new plugins clash with previous plugins, you have to be and stay up to date. This means that a certain degree of technical understanding is required if you decide to do it all yourself. But there are solutions for this as well. YouTube for example. offers a mass of tutorials to educate yourself for free. Even in the segment of online shop system providers, there are now some systems that offer free or at least only at low cost modular solutions that are really quick to grasp. And if you end up saying you’d rather focus on your core business, you can always hire specialist freelancers or agencies to handle the technical setup and maintenance.
What is e-commerce ? - With the right strategy to successful business
Now we know that the e-commerce sector can be very extensive and also has some advantages over traditional retail. But what all is involved in a functioning e-commerce business? Of course, we cannot analyze these points in depth. If it were that easy, our other 700 videos on the channel would be superfluous. So if you’re interested in this field, we primarily recommend our two “eCommerce salesperson” videos first, as they explain the training content in detail, which ultimately addresses the core competencies that are important for an online retail company. Furthermore, our specific playlists are ready for you, in which we explain Amazon, eBay, store systems such as Shopify, Shopware, Magento, WooCoommerce, but also online marketing measures from Instagram to YouTube to Facebook in great detail. Take a look around and feel free to ask us questions if something is unclear to you. This also makes it clear that the creation of the online store, for example. is not simply done. On marketplaces, of course, you benefit from the notoriety and thus have to do less marketing. However, no one will know your online store at first. That is why online marketing is a very important point. A social media strategy should definitely be set up for this. This may include
- Which platforms do you rely on? Instagram? Facebook? Pinterest? TikTok? Clubhouse?
- Do you want to grow organically or through paid ads or both?
- Who is actually the target group? Does it make sense to rely on influencer marketing for this one?
- Who is his competition? Which keywords can and should be occupied?
I think I could probably go on like this for another half hour. It is therefore necessary to draw up a precise roadmap, which must be considered on an individual basis. Every industry is different, ticks differently and accordingly needs a different marketing strategy.
Other aspects to consider
In addition to marketing, the technical component counts. The best store is the working store. That is, the hosting must run, what components were installed for the server? Are these fast enough to keep the PageSpeed high, so that the basis is created in the first place to be able to rank on Google on page 1. You need a CMS (Content Management System) to create content for Google. Is your data also protected? Do your payment systems work? Furthermore, the store should be visually appealing, as well as sensibly designed from a sales psychology point of view.
Factors play into this, such as, for example. the user experience – i.e. the user-friendliness. How many clicks the customer has to make to buy his product. If there are too many, he may jump off. Is the store also responsive, i.e. also usable and attractive on mobile devices? In the end, all this leads to one – Trust. Your store should appear professional and professional perfomen. At first glance, this sounds easier than it is. It’s often a detour – large image files have greater pixel density and look better, but reduce PageSpeed because they take longer to load, which can cost you rankings on Google. Many keywords in texts and especially long texts favor the search engines, but can scare off potential customers because they don’t feel like reading through it all. Much content, means in the best case to rank for more keywords, but on the other hand your server keeps up with the state, possibly you should take a better one, which then again causes higher monthly costs.
eBakery the e-commerce agency
In summary, e-commerce as an innovative form of retailing in the digital world has some compelling advantages over traditional brick-and-mortar retailing. But it is also important not to forget the challenges that need to be overcome. Therefore, if the advantages already explained in this video have encouraged you to want to dive into the world of e-commerce, but you lack the technical know-how, we at eBakery will be happy to assist you.
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