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    The online opportunity

    What is e-commerce?


    I have had many people ask me, what is e-commerce? The simple answer is “whenever someone buys or sells a product or service using the Internet, they are involved in e-commerce”.

    Let’s dig a little deeper because there are a number of different businesses when it comes to e-commerce.

    The different types of e-commerce merchants:

    There are a number of ways to classify e-commerce merchants.  They can be categorized based on the products or the services that they sell, whom they transact with, or the platform that they operate on.

    1. Classification of Physical Goods

    Typically known as online retailers, they can sell a wide array of goods ranging from clothes, home goods, flowers, gifts, business goods etc.  A virtual shopping cart is provided by many of these retailers and you basically fill the cart online, much the way you would fill a cart in a store.  The goods are either shipped directly to the client or some merchants have the goods made available at a local store for pick up.

    1. Service-based

    A wide range of services can be bought online from writers, consultants, service providers, educators,  web site design, web hosting, domain registration, etc.  Some providers allow you to buy standard services online, many ask for more details of your requirement (via an online form or a one on one consultation) and then provide you with a cost proposal for your to purchase made to your specific requirements.

    1. Digital products

    Digital products ranging from software, online education, e-books, photos, e-commerce etc. can be acquired from online merchants. Kindle is an example of an online digital merchant…

    Dollars.Classification by Participant party

    1. Business to consumer (B2C)– This is transactions involving businesses and consumers. In the B2C e-commerce, businesses sell products or services directly to the end suing consumers.
    2. Business to business (B2B)– are transactions between two businesses. A company that has customers that are other businesses is a B2B merchant.
    3. Consumer to business (C2B)– When a consumer sells or adds value to a business.
    4. Consumer to consumer (C2C)– When one consumer sells a product or service to another consumer – something is bought and sold between two consumers. A good example is the online marketplaces like Kijiji
    5. Government to business (G2B)– This is when a company pays for government goods, services, or fees online. A company paying their business taxes online would be an example
    6. Business to a government(B2G)– When a government entity uses the Internet to purchases goods or services from a business, the transaction may fall under B2G e-commerce. Let’s say a city or town hire a web design firm to update their website. This type of deal is considered a form of B2G.
    7. Consumer to a government(G2C)– Consumers paying for Government licenses for their vehicles, business licenses, trade licenses etc.

    Where and how does e-commerce happen?

    1. Online storefronts  

    Online storefronts created by the merchant (a website to sell products and services) using e-commerce solutions like PayPal.

    Some of the most popular partners for online merchandising are BigCommerce, Drupal, DemandWare, Magento, Oracle Commerce, Volusion…  Aspiring Merchants should look to see what offerings best match their niche.

    1. Online Marketplaces

    Online Marketplaces are sites that make transactions possible between Merchants and Customers.  Most online marketplaces do not hold or own inventory. Their role is to provide merchants with a platform to connect with buyers and perform the transaction.

    Online marketplaces are companies like eBay, Alibaba, Amazon, Fiverr etc.

    1. Social media

    With Social Media platforms like Facebook, Twitter, Instagram, Twitter, and Pinterest users can buy directly on some of these social media platforms. Many merchants use Social media sites primarily to showcase their products or services and direct shoppers to a merchant’s e-commerce site.

    Amazon and Wayfair – why are they so successful?

    Amazon is one of the most successful e-commerce businesses in the world.  They have not only a burgeoning marketplace open to third-party sellers, Amazon also generates revenue from Prime memberships and successful subsidiaries like Amazon Web Services and

    Author Bryan Eisenberg, in his book, Be Like Amazon: Even a Lemonade Stand Can Do It (co-authored by Jeffrey Eisenberg and Roy H. Williams) identifies the 4 Pillars of Amazon’s Success.

    1. Customer Centricity is Key – “Don’t force customers to fit how you want to sell them, rather Amazon works to fit themselves into how customers buy today and will change their buying behavior in the future.”
    2. Creativity – Amazon is constantly conducting experiments and coming up with ways to improve the shopping experience.
    3. Focus on Customer Experience – According to Bryan, “Amazon will do everything possible to have people talking about what an amazing experience it was to shop or return items through their store. Every tiny detail in the store is designed to have customers engaged and excited to be there.”
    4. Continuously Improve & Optimize – Amazon makes good use of its data. The company is always analyzing the numbers, and it uses the data collected in all aspects of their business, from customer experience, purchasing, warehousing, shipping, operations, finance to marketing.


    Wayfair works hard to personalize individual Customers’ shopping experience by observing and reacting to their shopper behavior.   The home furnishing e-tailer offers a broad selection with over 700,000 products. They had an impressive 55% increase from 2012 revenue, Forbes estimated $18 million profit on $915 million in revenue in 2014. At the end of May 2017,  they had over 36 million site visitors.

    So what next?

    You have a snapshot of e-commerce business and there are many impressive success stories out there as there are failures.  Why not take action?

    If you’re just starting out and need help picking a platform or deciding on your target audience,  why not register for a free trial of the Wealthy Affiliate to get you on the path to successfully running an online business.

    If you have any questions or comments, we would love to hear from you.




    Founder of Pathway to Making Money Online


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