What You Need to Know About Retail eCommerce
With the popularity of the internet reaching its prime, it is only natural that eCommerce does the same. With more people diverting towards online shopping every day, it has become the most popular example of eCommerce. However, seeing as eCommerce refers specifically to transactions that are made online, it can also include online auctions and internet banking, among many others. Recently, the influence of smartphones has seen the novel ‘mobile commerce’ model substantially grow, which has increased by 39.1% in 2018.
To understand more, here is everything you need to know about eCommerce.
Different eCommerce Business Models
Typically, eCommerce refers to three different business models. Since it is defined by the selling and buying of goods and services, the models are based on the nature of the participants involved. Here are the different models.
Business to Business
Business to Business or B2B, is the process of one business selling to another. B2B companies will offer a discounted rate on the goods or services being sold to other businesses, since purchases would normally be in bulk.
Business to Consumer
A business to consumer or B2C, model involves businesses like supermarkets selling to consumers. Naturally, the consumers will not be buying in bulk, so they don’t get the privilege of discounted rates.
Consumer to Business
There are instances where a consumer would sell their product to a business, which is an operation known as consumer to business, C2B. An example would be photographers that license their photos for businesses to use.
Consumer to Consumer
Consumer to consumer, C2C, is a relatively newer concept, which involves second-hand purchases. This happens when a consumer buys a product and resells it to a different consumer. It is a lucrative business model, especially with the help of platforms like eBay.
Unlike physical stores, online stores never close. This allows businesses and consumers to benefit from ‘around-the-clock availability’ that they offer. For businesses, the sales will significantly increase. As for the consumer, it is a matter of accessibility and convenience, as they can shop from any place and at any time. This has removed the restrictions of working hours.
Not Limited Geographically
By permitting consumers access to an online platform, a business would have removed the limitations of a physical store. This offers easy accessibility, regardless of where a store is situated. By doing so, stores would benefit from a global market and international sales as opposed to just being confined to a local market.
Most of the costs involved in eCommerce goes towards product storage. Otherwise, costs would significantly be reduced. Cost reductions are also because sales staff are not needed and a physical store does not need maintenance. The reduced costs can have businesses offer discounts and better deals to their customers, especially with bulk buying. For instance, if you are a business located in California, working with a wholesale sunglasses distributor in Los Angeles, bulk buying can provide you with premium quality products at rock-bottom prices. Costs are even less for businesses that use dropshipping, which can lead to larger profit margins.
eCommerce is capable of enhancing a business marketing strategy, seeing as the business will have more insight to customer behavior and will be able to track the frequency of their purchases and visit to your store. By using this data, a business can reshape its marketing strategy into becoming more effective. This will help them find new customers and provide a better experience for existing ones.
By automating inventory management, businesses are beginning to save billions in inventory and operational costs. The tools eCommerce provides has allowed businesses to accelerate and track everything, which includes orders, delivery, and payments.
Retail eCommerce Examples
Sometimes, eCommerce will not involve an intermediary. This means the product is sold directly from the business to the customer. Such an eCommerce is known as a retail business. Their fees, costs, and revenues are their own.
A lot of times, businesses will look to either buy or sell products in bulk. Typically, the products will be sold to retailers, who then sell them to consumers. These businesses will be identified as wholesale businesses. They usually offer discounted rates and deals for their customers.
Dropshipping businesses are retailers that focus on involving a third party. This third party will otherwise be identified as the supplier. They will manufacture, store, and ship the product. The dropshipping business will have the costs of product storage and hiring staff alleviated.
Smartphones have become essential in people’s everyday lives. It grants users access to a variety of apps, like music playing apps. Some of the apps will need subscriptions, which is when a purchase subscription will be automatically renewed until it is canceled by the subscriber.
Set Up an Online Shop
Setting up an online shop can typically be achieved in two ways.
Build From Scratch
In order to set up an online shop, you can choose to build one from scratch. This will either be by developing an online store yourself, or by hiring an expert to do so. Naturally, choosing to build an online shop from scratch will take longer and could cost more. However, unlike an off-the-shelf platform, you will be able to customize everything, such as the design and assume complete control. This can help your retail store stand out. However, you will need to work on SEO and marketing your platform in order to receive traffic.
Use an Off-the-shelf eCommerce Platform
Using an off-the-shelf platform is often found to be useful, as it guarantees that you benefit from the existing traffic, as well as Google ranking. Additionally, they make building an online shop easy and the process can be fast. However, it will mean you have to sacrifice customization. Then again, they can get you up and running in a matter of hours.
There is no doubt that eCommerce is beginning to take over the traditional retail experience, especially as it produces a number of opportunities, such as removing geographical limitations and restrictions of working hours, as well as reducing costs. The benefits are many and they tend to serve both businesses and customers. For instance, wholesale retailers are capable of increasing their profit margins while offering consumer products at low prices. eCommerce unlocks a door of endless possibilities, as it allows transactions to be made from any place in the world and at any time.