What is an eCommerce Business in 2022? [+Full Components]

Short for electronic commerce, and used to mean internet commerce, e-commerce is when a transaction happens not in the traditional brick and mortar setting of a real-world shop, but on the digital platform of a virtual store, called e-store/shop, or online shop/store, through means provided by the internet and its supplementary technologies. E-commerce has three components.

What Are The Components And Stages Of E-Commerce?

In order for someone to buy something online from a seller, and have e-commerce happen, three stages are involved:

 1. An Exchange Of Data

A product or service is introduced through an online platform, a website, or an application. The buyer and seller exchange information in the form of pictures, videos, and words, to help the buyer decide whether he is interested in the purchase or not.

2. The Transfer Of Funds

A decision is made on the part of the buyer, and then the monetary element is transferred from the purchaser to the vendor.

3. Delivery Of The Goods Or Service

And finally, the seller makes arrangements for the buyer to receive the product or service, whose specifications, including the receipts and tracking number, are also issued and reported on a form on the online platform.

E-Commerce ‘Website’ Vs. E-Commerce ‘Tool‘, Are They The Same?

The very first stage of a transaction to happen is the buyer being presented with the products or services. Now, that can happen in two ways:

1. When Demand Seeks Out Supply

The buyer feels a need for the goods or services and they seek it out in the following two ways:

A.  Either in the real world, where there are shops and companies where you can go and see things for yourself, and do the shopping in person.

B. Or you can look for it online, i.e you can google it and be taken to the world of e-commerce, where the shop window is replaced by a website, called an e-commerce website or e-store or e-shop, Amazon, being one.

2. When Supply Seeks Out Demand

When the sellers use a variety of marketing strategies to create a desire in potential buyers to buy from them. These strategies are one of these two categories:

A. Traditional means of promotion in the real world, like placing ads on billboards or Tv channels, passing around fliers, or putting up banners.

B. Using a variety of online marketing strategies, like SEO marketing, social media marketing, or content marketing, all of which need one of the many types of marketing tools which are themselves e-commerce tools.

So what are eCommerce tools in marketing? They are websites that offer a whole host of auxiliary services, so e-commerce, meaning buying and selling online, can happen smoothly on an e-commerce website.

Some of these services include building websites, providing e-commerce analytics, online payment, marketing, and so on. So based on these services, there are about ten types of eCommerce tools, among which are website builder tools like WordPress, marketing tools an influencer marketing platform, and conversion optimization tools like a website heat map.

What Are The Advantages Of E-Commerce?

There are advantages to e-commerce both for the buyer and the seller, as it removes a number of hassles and limitations that are an inherent part of brick and mortar shopping:

1. E-Commerce Removes The Physical Hassle Of Commute And Legwork

Usually, we just keep postponing the shopping we need to do, as it feels like too much to put ourselves through the traffic, parking space hunting, the crowds, the long walks, etc. E-commerce will bring us, buyers, the ultimate convenience by bringing the shops to our screens.

2. E-Commerce Removes Having To Sift Through A Broad Spectrum Of Options

When you shop online, you can check a few boxes on the e-commerce website to filter what you are looking for, have a super tailored and personalized shopping experience, and avoid having to tear through the town looking for something particular.

3. E-Commerce Removes The Limitation Of Geography

By maximizing the reach of both the buyer and seller in the global market, e-commerce makes the world your local marketplace. You don’t have to forget your favorite Italian shoes because you live in India, the same way a seller doesn’t have to count out profit from Seattle since they keep the shop in New York.

4. E-Commerce removes The Time Limitation

Few stores are open 24/7 in the real world, but all online e-commerce e-stores are open 24//7.

What Are The Disadvantages Of E-Commerce?

There are a number of downsides to e-commerce that may put off both buyers and sellers. Here are the most common ones:

1. E-stores can be expensive to launch

Although they sound cheaper to open, they come with their own sets of expenses to build and maintain.

2. Not All E-Stores Prosper

Although they all look glamorously prosperous, not every e-store flourishes, and many of them are forced to close after a while.

3. E-shopping Strikes Some As Impersonal

You might be one of the many who like going into the shop and seeing and touching the merchandise you want to buy, and shopping online is just too impersonal to count as real shopping for you.

4. Your Private Data Might Be Stolen

Your credit card number, address, and phone number typed on e-commerce websites, some of which have security breaches, might end up being stolen, which is always a concern.

5. What You See May Not Be What You Receive Or Want

Every e-shopper has received at least one item they have purchased online that looked, fit, or worked nothing like the way it was promised online. So there is always the risk of not getting what you expected.

6. Delivery problems may arise

A lot can go wrong in the process of shipment, from your parcel getting lost, damaged, or delayed. That kind of thing can’t happen in traditional shopping.