What Is Ecommerce?
The Dictionary says: “ecommerce: Commerce transacted electronically, as over the Internet.”
Synonyms include: ecommerce, electronic Commerce, Ecommerce, online retail, online trading, and selling online.
Selling and transacting like this can be done thanks to the World Wide Web, which is the global combination of links, information, web pages and ecommerce websites. All of this is delivered to us via the Internet, an infrastructure of computers all linked together.
Ecommerce embodies anything from selling a domain name to selling music downloads, or from information products like this eBook to physical products such as a DVD or clothing. Once ordered these products are shipped direct to your customers’ door. The term ecommerce is also commonly used for selling physical products to retail customers (Business to Consumer, B2C) and business customers (Business-to-Business, B2B). Therefore, we will focus on these in this book.
Online Ecommerce Business vs. Offline Business.
The advantage of an online business is that you can sell a complete selection of products, with no limits on space. A bookstore can only hold so many books, but online you can display and sell the entire range of book titles the world over, should you wish.
An online business typically has highly automated and more efficient software and systems. Online marketing is highly targeted and ultimately ecommerce overhead costs are lower. On the flip side, if not managed well ecommerce costs can skyrocket and sink your business.
Ecommerce businesses do not have a typical storefront with passing trade (footfall), so you cannot be passive and wait for customers to come to you, as many offline retailers do.
However, just like an offline business, a website needs traffic (customers), conversions (sales) and it’s essential you build a relationship by communicating with your customers to offer them valuable information and products on the back-end (after the sale is made).
Just like any business, if you do not plan, forecast, budget and do not invest appropriately from the start, you will struggle to make profits and ultimately fail. Be prepared to allocate and invest accordingly into your ecommerce business, website and marketing from the day you start—this means start assertively, not passively!
If you already have an offline business, bolting on an ecommerce business could be the way to double or even triple your profits and reach customers in parts of the world you never knew existed. However, an analysis of the pros and cons must be completed. If approached without planning or checking the numbers it may just add unnecessary costs, which reduce your profits.
A Sad Ecommerce Statistic.
Sad but true! 97% of ecommerce websites make $0 profits in their first 3 years online. Such is the steep learning curve and skill set required to build an ecommerce website in order to ultimately dominate your product category, market or niche.
Have you heard the phrase ‘work on your business and not in your business’? Well, the 97% referred to above are doing the latter.
‘Spend 20% of your time on Operations and 80% on Marketing’
Once trapped running your ecommerce website, it’s damned hard to escape and spend time where you should be, marketing your business to greater profits. Aim to be part of the profitable 3% as quickly as possible, and your ecommerce sales and profits will skyrocket…
Having been part of the 97% from 2000–03 and subsequently part of the elite 3% from 2004 on doing sales in the multi-millions and growing—in very competitive markets—I can give you the benefit of impartial views and experiences, and I have the ‘ecommerce stripes’ to help you.
So it’s not all doom and gloom. Ecommerce can be exciting, fulfilling and very profitable if you plan from the ground up, grow consistently and get it right from day one. I’ll show you how in this book.
Ecommerce Success Story.
Amazon.com is the most successful ecommerce website online. It’s also my all-time favorite ecommerce website! In 1996 Amazon exploded onto the ecommerce scene pioneering the way in online retailing to date. By February 2010 it had 124 million customers worldwide.
Many companies have tried to imitate but very few can replicate such massive success. Amazon’s web team fully understands its web customers, and why they buy from its website.
Amazon takes marketing to the next level where most websites simply do not. The people at Amazon analyze user data and utilize this to build, design, personalize and structure their website accordingly, to answer their customers’ questions, fears and frustrations and match the wants and desires of their customers exactly. They introduced and pioneered product ‘Recommendation Engines and Systems.
This essentially means once you have user data you can target and match your products to your customers’ buying interests and behaviors. This then means they SPEND like crazy with you. More on this strategy in Step 2 & Step 4.