The last 10 years have witnessed a sensational shift in the business the way largely it operates. The business has been shifted from physical brick and mortar shops to online shopping portals. With the ease of online infrastructure, the consumers can spot, select, and buy products and services at the convenience of their homes. The consumers are now able to buy products and services without investing their precious time, efforts, and money to visit the brick and mortar shops where the products and services are sold in the traditional business formats. Let us first understand what is eCommerce?. In this article, we will be discussing the concept of eCommerce, eCommerce business models, major eCommerce companies, and how to design an eCommerce website.
eCommerce is also known as electronic commerce refers to the transaction involving buying and selling goods and services using the internet. eCommerce also involves the transfer of funds between the buyer and seller according to the pre-agreed considerations. A commercial transaction that happens between two computers or electronic devices without an internet connection is not considered as an eCommerce activity. Individuals, business firms, and large corporations have benefited from eCommerce since it has eliminated the need for physical transactions in the brick and mortar retail outlets. The roots of eCommerce can be traced back in the mid of 1994 to witness the first sale of CD drives through the Net Market. It is an American online retail platform that buys and sells goods in electricals and electronics.
Types of eCommerce business models
Considering the parties involved in the business transactions, we can classify eCommerce business models into four broad categories. They are:
1.Business to Business(B2B)
As the name suggests, the B2B business model is between the business firms in which one business entity sells and the other entity buys the product or service. Normally, B2B firms sell goods and services at deep discounts since the business buying the products would require reselling those products to end-users to make a margin. Raw materials and spare parts manufacturers and producers often involve in the B2B business model. Example: Software as Service(S-a-a-S). Distribution agencies, financial consultants, insurance agencies, software solutions, spare parts manufacturers are the best examples for the B2B business model.
- Business to Consumer (B2C)
Business to Consumer eCommerce model prevails between the business and the end-users of the product and services. Supermarkets, retail outlets, fashion stores are the best examples for Business to Consumer eCommerce business models.
- Consumer to Consumer(C2C)
In the C2C business model, consumers sell goods and services to other consumers. In the process the consumer act like a business on behalf of the company who is promoting C2C eCommerce activities. Craigslist, eBay, and Amazon are the best examples of the C2C business model.
- Consumer to Business(C2B)
When the Consumers sell their products and services to the business it will become a Consumer to Business eCommerce business model. Photographers, writers, designers, and artists promote their products through business firms.
You may feel like you know most of the eCommerce companies operating around you. But you can recall and name only those eCommerce companies who caught your attention by their unique selling propositions. Some eCommerce companies are dealing with exclusive categories like lifestyle, food products, personal care, Readymade garments, etc. however the major giants like Amazon, Flipkart, eBay, Myntra, Alibaba are dealing with multiple segments. Some of the famous eCommerce companies are shown in the image shown below:
We have seen some of the most important eCommerce companies across the world. Remember none of these companies have developed their eCommerce business overnight. They have trudged to understand the impulsions of the online market and chosen eCommerce platforms exactly to the requirements.
Often, the selection of the eCommerce platform is to make or break decision for these companies. The hosting, inventory management, cart management, support system, payment gateway management, and tax complications will bring tremendous complications when handled improperly. Further, most of the businesses run under a limited budget, it is important to choose the features and functionalities exactly to the requirement. Any additional features and functionalities that are of less utility should be cut-off to save costs and optimize the business results. Some of the best eCommerce platforms in 2020 have been briefly explained below:
Shopify started in 2004 by a group of snowboarding champions and now it is one of the most popular eCommerce platforms having its base in more than 175 countries. The platform is more suitable for small and medium-sized business organizations. The features and functionalities can be altered to your requirement and some of the plug-ins can be brought in for your requirements. Shopify is the upgraded version of Shopify with the added features. Those who have the requirement for limited features in a particular segment can buy Shopify which would be enough for your requirements. Shopify is designed for large companies and companies with wide areas of eCommerce operations.
Big Commerce company was found by two Australian developers in 2009. Big Commerce has operations in more than 120 countries. Big Commerce eCommerce platform is more suitable for those companies that are ready to invest in scaleable eCommerce platform. Big Commerce is a good choice for those companies wanting to build an eCommerce website according to the frequently changing tastes and preferences of consumers. Big Commerce instead of changing the fees per transaction, cap the amount of sale the company can do per tier.
Magento is the most popular open-source eCommerce platform used across the online shopping business. Magento has already established a strong client base with the userfriendly interface embedded in it. The platform has the most powerful library of 5000 plug-ins. However, this eCommerce platform has been facing challenges due to its budget requirements and the time required to develop the eCommerce platform using Magento. Due to these reasons building an eCommerce website using Magento becoming difficult.
Wix is a cloud-based eCommerce platform builder used to build an eCommerce website using drag and drop tools. They have a series of templates that ease the life of developers in building a customized eCommerce platform. This eCommerce platform is more suitable for those companies that do not have full time, dedicated web designers to build eCommerce websites.
As established by Harvard Business Review no other industry is failing faster than the conventional retail business. The eCommerce business will continue to damage the traditional brick and mortar based retail business. Consumers have already been disappointed about the convenience of purchasing products, parking facilities, standing in a queue, and lack of time to spend near the doors of the retail outlet. When the high-quality products are available for cheaper rates at the convenience, why will they spend their precious time buying costlier products at brick and mortar stores? Huh doesn’t make sense….
Hope you enjoyed the article, please feel free to share your thoughts in the comments section.
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