What is e-commerce? How do you start from scratch?

Do you want to enter the world of e-commerce and do not know where to start? What are the necessary steps to take, and what are the possible options for creating an online store and making a profit from it?

Do you have a physical store where you sell products or services, but would you like to sell these products and services online in addition to the traditional selling method?

This article is for you. In it, we will explain to you the concept of e-commerce, show you how it works, what are its positive and negative aspects, what are its different types, and what are the steps necessary to become an entrepreneur in the field of e-commerce and achieve success over your competitors.

What is e-commerce?

E-commerce, or what is known for short as E-commerce, is the process of buying or selling via the Internet (online shopping).

When you buy or sell a good or service over the Internet through your computer or through your mobile phone, this is simply called e-commerce.

We can also consider that completing various transactions (such as booking tickets, paying bills, conducting banking transactions, or electronic transfer of funds) via the Internet is part of the e-commerce process.

The e-commerce market has witnessed high growth in recent times. The number of people who made online purchases reached 2.14 billion in 2021, according to statistics issued by the famous statistics website Statista , and it is expected to have greater future potential and higher returns.

Mobile e-commerce (M-commerce) in particular has also witnessed remarkable progress, as most online shopping transactions are now completed through mobile phones. This is no wonder, as the rapid spread of the Internet and the significant increase in the number of smartphone users has affected all aspects of life, changed the purchasing behavior of consumers, and made online shopping one of the popular ways of shopping, especially among young people.

How e-commerce websites work

You must have used an e-commerce website before to buy or sell a product. All you did was access the page of your favorite online store through your personal computer or mobile phone while sitting on your comfortable sofa, click the mouse several times, order the product or service you want, and enter your payment information, and a few days later your order arrived at your home address. .

In fact, this is what you, as a customer, see, but the process of shopping from online stores goes through other stages in the middle before the product reaches you. In order to understand the full picture of the online shopping process when you shop from one of these major online stores, you must know that the process is longer than that, especially in major online stores.

Major companies complete e-commerce transactions based on three basic elements or pillars:

1- Online store

This store is a store hosted on a hosting server . It is an alternative to a physical store and is considered the basic foundation of your e-commerce, through which you will display your products or services for sale. You will be able to process financial transactions and link with banking systems to verify customers’ credit card details.

2- A database system to verify the availability of products in stock.

The store is usually linked to a database system whose task is to check the inventory of items in the store. This rule is constantly updated whenever a customer orders a product from the store, and this system can send notifications to the storefront of the need to submit requests to suppliers to supply new products when the stock drops below a certain limit.

3- Dispatch system to link the warehouse and the delivery destination.

It is a system linked to the warehouse as it is concerned with the process of linking the warehouse and the delivery destination to send products to customers. Through it, the location of the goods can be determined immediately and the fastest and least expensive way to be sent to the buyer is chosen.

To understand how these three systems work, let us take the following example: Suppose you want to buy a book about the Internet. All you have to do is search for the availability of the book in one of the electronic stores dedicated to selling books.

When you find the desired book, you will order it through the desired store so that your web browser connects via the Internet to the web server that runs the store’s website.

The presence of this book is then verified in the store’s inventory database, and if it is available, the order processing is continued and the merchant service provider or Merchant services system is contacted, which is a system that allows merchants or businesses to receive payments from customers, manages payment information and ensures that The customer has enough funds to place the order before returning to the order manager.

After the merchant’s system allows the order to be tracked, the order manager confirms that the transaction has been processed successfully, and informs the web server of the online store about this. The web server then displays you a web page stating that your order has been processed successfully and that the transaction has been completed, and the order manager sends a request to the warehouse to send the goods. To the customer, it all happens while you are sitting at your device.

Now the shipping company receives the book from the warehouse to be delivered to the customer. Once the book is dispatched, the warehouse computer sends the customer an email to confirm that the book is on its way to them. Finally, the ordered book is delivered to them.

All this long journey is invisible to you as a customer. All you see and deal with is the computer or device from which you order the book and the shipping company representative who arrives at your door and delivers the ordered book to you.

This, of course, is for large stores, but small stores may be satisfied with an e-commerce website only to display their business and products and receive orders from their customers. Many people successfully run small-scale online stores without complex databases or messaging systems of their own.

You can also start your e-commerce with minimal requirements. All you need is an online store to advertise your products and receive orders through it, and you can monitor inventory and carry out the sending process in traditional ways.

What are the types of e-commerce?

E-commerce can be classified according to several types or models depending on the identity of the two parties to the commercial transaction. Here is an explanation of each of these types and the basic differences between them:

1. B2C business to customer

Abbreviation for B usiness t o C ustomer, i.e. trade that takes place between companies or merchants on the one hand and between customers or individual consumers on the other hand, and it is the traditional form known in any commercial activity.

For example, let’s say there is a business that sells phones, books, clothes , etc. to its customers online. Any customer can buy the product he wants online directly by visiting this company’s online store and choosing the product he wants.

The most famous examples of this type of e-commerce: Amazon store and Noon store .

2. B2B business to business

Abbreviation for B usiness t o B usiness i.e. trade that takes place between companies or merchants with each other over the Internet.

In this type of e-commerce, a merchant or company buys or sells some goods online to another merchant or company, where several companies contract with each other and buy and send goods from each other.

For example, suppose that Intel, a processor manufacturer, sells its goods to many other companies that manufacture computers. This is considered B2B e-commerce.

Another example, let’s say that a clothing company manufactures its products for different wholesalers who in turn sell these clothes retail through online stores directly to customers, then this trade is considered a B2B trade.

3. C2C customer to customer

Abbreviation for C ustomer t o C ustomer, i.e. trade that takes place between customers with each other over the Internet.

In this type of e-commerce, one customer (the seller) sells a product or service online to another customer (the buyer), and this trade often takes place through websites dedicated to affiliate sales. Where some products and services can be bought and sold in exchange for a commission that you specify.

For example, suppose you have a used phone and want to sell it, you can enter your phone details online, and then a customer who wants to buy your mobile can contact you to buy it.

The most famous example of this type of e-commerce is the famous eBay site, where individuals can display their goods on the site and create an auction for them to sell, and the OLX group , which is a global online market that operates according to the C2C model. This group began its work in 2006 and today operates successfully in more than 45 countries where this site allows people to buy and sell things directly without any intermediary party.

4. C2B customer to business

Abbreviation for C ustomer t o B usiness i.e. trade conducted from a customer to a company or merchant.

We can consider that this type is less well-known and common than previous e-commerce models. In this case the seller is an individual person and the buyer is a company or merchant.

When an individual customer sells his goods, services, or ideas to a merchant or company to serve it in producing its products, then this type of trade is called electronic commerce from the customer to the company.

For example, you may be an independent person who provides e-marketing services to commercial companies, or an expert translator who provides translation services to a company on the Internet, or a talented designer who individually sells image and video processing services to different companies and businesses. These services are usually offered on specially designed platforms.

In this case, companies turn to online C2B platforms to find and hire independent service providers or product sellers. The platform is sometimes a third party that charges a commission or fee to connect sellers with businesses. Affiliate marketing is also an example of this type of trade.

5. B2A Business to Government

Abbreviation for B usiness t o A dministration, i.e. trade that takes place from a merchant or company to a government agency via the Internet.

When an online merchant or company sells a product or service to the government by joining a project, this type of e-commerce is called B2A e-commerce.

One example of this type of commerce is for a website development company to create a website for the government. Since the company deals with the government, this type of e-commerce is called B2A.

6. C2A Client to Government:

Abbreviation for Customer t o A dministration, i.e. trade that takes place from a customer or consumer to a government agency via the Internet.

When a consumer provides a service or product to the government, this transaction is considered C2A e-commerce. The service can be as simple as someone providing a parking ticket collection service or an online bill payment service for a government agency. It is important that the service be done online.

Disadvantages and advantages of e-commerce

Before you decide to enter the world of e-commerce, you must know that this field, like any other field of work, has its positives as well as its negatives, so you must know them and work to invest the positives in your favor and try to overcome the negatives as much as possible.

Disadvantages of e-commerce

In order for a customer to be able to purchase a product from an e-commerce website, he must have basic knowledge of using the Internet and how to conduct buying, selling, and paying electronically.
In e-commerce, the customer cannot touch and inspect the product to ensure its quality and material. The purchasing process is often based on product images and written specifications only.
It is not possible to obtain the ordered product immediately, as shipping and delivery of the goods usually takes several days.
The customer may be exposed to fraud and hacking and his important information such as credit card number or bank details may be obtained while purchasing goods from unreliable online stores.
The difficulty and cost of returning or refunding unsuitable products. When purchasing from a traditional store, you can usually return or exchange the product immediately and easily, while returning the product takes about 15 days in e-commerce.

Despite these drawbacks, e-commerce is constantly improving and online businesses are finding ways to overcome most of these drawbacks.

Today’s online stores are supported by SSL certificates that maintain the store’s security and guarantee a secure and encrypted connection.

Most online stores today also have physical stores and support them with enhanced online stores. This makes it possible to examine products in physical stores before making the decision to purchase online.

Always make sure to buy from reliable stores that have a reputation and name in the market, as these stores will not take risks by offering products with certain specifications and selling other products. These stores care about customer satisfaction and operate on the principle that the customer is always right.

These stores will allow you to return or exchange the product for free if the products you purchased are not suitable for you or do not match the specifications mentioned about the product in terms of material or color.

Advantages of e-commerce

No need to have a physical store to start your e-commerce business. Anyone can start their e-commerce easily and at a low operational cost by creating their own online store, or by registering your own account on an e-commerce site such as Amazon.
Buying and selling is available at any time 24/7. Unlike physical stores, which are limited to specific working hours, online stores are available seven days a week and 24 hours a day. As a result, you will get more sales and more profits.
The ability to reach more customers. If you open an online store, customers can come to you from all over the world.
Easily search for products, compare their specifications and prices, and obtain available customer reviews about the products.
The ability to test new products, services, brands and companies in the market at the lowest cost.
The ability to track visitors to your store, obtain target customer data through online metrics, and make appropriate decisions to improve sales operations.

How to start your e-commerce?

If you want to start your own e-commerce and take advantage of its features to expand your business and reach more customers in different regions. In this paragraph, we explain to you the basic steps that will help you enter the world of e-commerce and launch a successful and profitable online store, God willing.

Step 1: Create a preliminary plan of action.

You must first determine whether you want to create your online store according to the B2C retail model, B2B wholesale sale, or other types. What products will you sell in your store? Will they be physical or digital products? Will you provide the inventory yourself or rely on another store to secure the inventory? Will you offer it for sale in the local market or in the international market?

Where will you get your products? Will you offer a single product, a bundle, sell subscriptions, or something else? Will you secure inventory yourself or rely on a drop shipping business model, where you order products from a third-party seller and they ship them directly to your customer as if the order came from you? Or will you rely on affiliate marketing for other brands to promote your products?

Identifying all of these things and understanding your options for your e-commerce website from the beginning will help you make the right decisions in the future. For example, you can develop a preliminary plan for your online store as follows:

(I will create an online store that sells retail, and I will sell physical and digital products, and I will work to provide my own inventory myself. For physical products, I will provide shipping within Egypt, and for digital products, I will sell them internationally)

Step 2: Identify your target customers and study your competitors.

You must have a general idea of the type of market you want to deal with and what you want to sell, identify the target group of customers who are interested in your products and are ready to buy what you sell, and understand their needs.

In addition, you must determine how you will provide your products or services to your customers? How much will it cost to start your online store? Are there legal or other regulations regarding your product or service that you should take into consideration before you start selling it?

You will also need to conduct competitive research and find a competitive advantage for your online store and brand in order to be successful in selling your products or services.

Step 3: Choose the name of your online store and design its visual identity.

Once you have determined your final e-commerce business plan, the next step is to choose a unique name that expresses the nature of your business and ensure that it is not taken from another company. Make sure you have a domain name suitable for your potential business.

If your domain name is currently in use, you may want to consider a different business name or alternatives to different domain names such as yourbusinessname.eg instead of yourbusinessname.com. You should also create a distinctive logo design and visual identity for your company.

Step 4: Take the necessary legal measures.

After that, you must carry out the necessary legal procedures and obtain all the necessary legal permits and licenses for you to be able to practice your business, as each country has local laws and specific laws that you must adhere to in any commercial activity you want to practice.

For example, you will have to obtain a commercial register, and choose the type of your commercial company and the appropriate legal name for it, as the type of company you choose will entail legal and financial obligations that affect your e-commerce business.

In this step, it is preferable to consult a lawyer or legal advisor to obtain advice on the best option for your business according to the laws of your country.

Step 5: Choose the e-commerce platform to build your store.

After you have completed all the necessary papers to register and start your e-commerce business legally. You should start creating your own online store.

Building your online store, as we mentioned earlier, is the basic foundation for starting your own e-commerce business. Through it, you will have a showcase for your business, which is the first thing your customers will see and what they will use to browse and buy your products or services.

There are several e-commerce platforms (E-commerce plateformes) that you can rely on to build your online store, conduct e-commerce business, manage inventory, receive and ship orders, receive payments, and other things.

There are e-commerce platforms that allow you to manage your e-commerce business through them, and all you have to do is create an account on these platforms such as Amazon and eBay and start your e-commerce easily.

You can also rely on platforms that provide you with services to host your online store, such as (WooCommerce, BigCommerce, Shopify, Opencart… and others).

Step 6: Choose suitable hosting for your store .

Web hosting can be one of the most important things to take care of when starting an e-commerce business. It depends on the method you followed to create your online store according to the previous step.

If you have chosen to build your online store using WooCommerce or any other self-hosted e-commerce platform then hosting is something you will have to take care of yourself.

Once you have determined the solution that is right for you, the next thing you need to do is work on customizing your site according to your business identity, adding actual products to it, and making sure to display them in a professional way that will encourage customers to buy from you. Then you have to actually launch your store online.

Step 7: Marketing and developing your store continuously .

Now that your store is ready, you will of course need to market your e-commerce properly. Experts usually recommend allocating about 6% or 7% of your total revenue to marketing and advertising for your e-commerce.

There are a variety of e-marketing strategies that you can follow, such as sponsored ads on social media, paid Google ads, influencer marketing, and content marketing.

Also think about optimizing your store for SEO and improving the customer’s shopping experience, and providing several options and methods for payment and several ways to ship and deliver products. Continuously improve and change your marketing strategy to work better to increase your profits and expand your business.

For example, make sure to improve your store and add a competitive advantage over other stores, such as providing distinctive products that are not available in the market, or providing the shopping feature through voice search or marketing automation , and providing free shipping and after-sales services, and you can publish questionnaires and obtain customer reviews. For your products and services to help you know the aspects you need to work on to improve your e-commerce.

You can also boost your store’s profits and sales by displaying products that are purchased together , activating offers such as buy one product and get the second for free , or using Cross Sell and Upsell techniques , creating a product calculator to attract more potential customers, and other marketing strategies.

How to maintain your enthusiasm and creativity as an online store owner

The final step: seek help from experts when needed.

You may decide to create and launch your own website by following all the above steps yourself. Or you can invest in a professional designer or developer to help you with this task. You can find on freelance sites such as Freelancer or Khamsat a professional website and online store developer who will help you accomplish this task and complete all the required steps for you perfectly.

How do you hire a professional freelancer to help you develop your website?

Conclusion

E-commerce promises a bright future, and it can open up new opportunities and markets for you that you will not reach in the traditional way. Of course, it will not be easy to compete with huge online stores and giant companies, but this does not prevent you from being able to open your own online store and start your own business and succeed in it.

Amazon itself, which is considered the most successful online store in the world, was initially just a bookstore and today it sells everything you can imagine! But success in this field requires following the right strategy, carefully studying the market need, making sure to build an online store with a professional, safe and fast design, choosing the products you sell and the business model you will adopt with precision and care, and continuous improvement of your business.

Then e-commerce can be very profitable and succeed amidst this high competition. All you have to do is take your first step and take your place in the world of digital shopping that is open to everyone..