Commerce Blog

The Basics of Ecommerce


Buying and selling online is what we refer to as ecommerce. Ecommerce is short for electronic commerce and there are several examples of the same.

Examples of Ecommerce

Online Shopping

Buying and selling goods on the Internet is one of the most popular examples of ecommerce. Sellers create storefronts that are the online equivalents of retail outlets. Buyers browse and purchase products with mouse clicks. Though is not the pioneer of online shopping, it is arguably the most famous online shopping destination.

Electronic Payments

When you are buying goods online, there needs to be a mechanism to pay online too. That is where payment processors and payment gateways come into the picture.

Electronic payments reduce the inefficiency associated with writing and mailing checks. It also does away with many of the safety issues that arise due to payment made in currency notes.

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The engine of ecommerce is the internet. This is what propagates everything and therefore all ecommerce stores require stable, reliable and fast internet connectivity. Any change in technology also affects the demand for ecommerce services. For one to be able to fully understand ecommerce they will have to understand the several roles the internet plays.


An unreliable connection is annoying for the consumer and can mean lost sales for the vendor. Generally speaking, possible areas of potential failure are:

  • Local network connection provider
  • Internet Service Provider (ISP) used.

You may have a limited choice of connection providers in your area. There’s a greater choice of ISPs and, for business purposes, it’s worth researching the reliability of a prospective ISP before committing.

Connection Speed (Bandwidth)

Bandwidth is without doubt the most important factor affecting the quality of Internet services.

Put simply, the bandwidth of any transmission medium, such as network cabling, is a measure of the amount of data that can be transferred in a fixed period of time.

The unit of bandwidth is bits per second (bps).

This is important because it affects the speed of transactions carried out over the Internet and thus the quality of the experienced as seen by the purchaser.

Slow or frustrating links are more likely to harm business than increase it.

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If you are thinking of delving into the world of ecommerce then you should also consider the problems associated with it. These are challenges that are quite unique to the virtual world.

Lack of visitors to the site – when people don’t know about you

A lack of visitors to your online business is either about people not knowing your site exists, or being unable to find it. Both these problems can be tackled by good use of Search Engine Optimisation (SEO). For this you need good content, which is not just about stuffing your site with keywords. It’s about thinking about what people will be searching for that could lead them to your site – which is all about understanding the customer mindset.

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Low conversion rates – when people browse but don’t buy

If your site is being found, and people are browsing, but not making a purchase, you need to understand why customers are leaving the site, and why they leave it when they do. For this, Google Analytics is your first port of call. It’s free, it’s the most widely used service of its kind, and you can get a great deal of intelligence on how and why people use your site. It helps you rule out what your problems are not, and identify what they are. If people are leaving the site immediately after landing on it, is your homepage not well-designed? Is your marketing getting it wrong and people are not finding what they thought they would at your site? Is the design of your site confusing or off-putting?

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There are many entrepreneurs who have started ecommerce sites and they are making lots of money on a daily basis. In fact studies show that online retail sales increase annually. This success is only possible if you undertake certain steps in setting up your ecommerce site.

Learn before you leap

Part of your planning has to be learning about how to run an online business. The best way  is to read about e-commerce online (on sites like The Profit Club) or in books and chat to people who are selling online already – maybe via a forum, or by contacting the owners of sites you like (provided they are not big retailers).

Learn from your own shopping experiences too. What do you like/dislike?

Attending a few small business and e-commerce exhibitions will help as well.

Know the competition

You can see what the competition is like by searching on Google for some of the products that you plan to sell. You could even test their service by buying something.

Get your proposition and pricing right

Why would anyone want to buy from you? What can you offer that’s different to other sites? Beware of competing just on price – it’s a mug’s game. Add value instead and charge more! Eg offer related consumables (like batteries) for a bit more, suggest associated items, offer a gift-wrapping service for a small fee, or free P&P if they spend £X.

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