The advancement of e-commerce technology and the internet have had a direct impact on e-commerce during the past decade. Similar to how the internet has become the preferred medium for marketing, advertising, and purchasing products, goods, and services, e-commerce has developed to compete with traditional shopping in various ways.
Indeed, the growth of e-commerce increases the demand for e-commerce websites. They allow customers to search for products online, add them to a shopping cart, and enter their payment information to complete a transaction. Since the introduction of online credit card processing, e-commerce has infiltrated society and become an integral part of our daily lives. In Q2 of 2020 alone, e-commerce growth surged by more than 44% due to COVID and recent events.
Knowing the growing need for e-commerce websites, this article explains what an e-commerce website is, why businesses should consider using it, what its benefits are, and how it operates.
1. What is an e-commerce website?
E-commerce websites (electronic commerce websites) are built to connect shoppers to products or services for trading online. At the most basic level, they provide everything we need for online shopping. They work like this:
A company creates a website that lists the items or services it offers, as well as their costs. (There are numerous e-commerce systems available to help you get started with your internet business.)
- A customer discovers the website and then purchases goods and services. When they've chosen to stop shopping online, they proceed to the checkout stage.
- The buyer enters payment and delivery details after completing the website's checkout process.
- The e-commerce website sends the payment information through a payment processor that validates the payment and collects the funds.
- The payment information is sent by the e-commerce website to a payment processor, who verifies the payment and collects funds.
However, as straightforward as the procedure appears on the surface, there are numerous moving pieces to coordinate for all online purchases. To function, all online stores rely on the same technology. All online stores depend on the same technology to run. That’s what we’ll outline for you here – so that you can set up a high-quality e-commerce website that customers will come back to again and again.
If you’re thinking about starting an e-commerce business of your own or just want to learn about e-commerce, start here. Once you get the basics out of the way, you can move on to learning about e-commerce business models. You then can develop your online store. Once it’s up and running, you’re an official e-commerce business owner.
2. Why your business should have an e-commerce website instead of a third-party platform?
As a business owner, you have a variety of choices for where to sell your products, including marketplace platforms and your own e-commerce website.
Amazon, eBay, Lazada, Shopee, and others are popular options for small enterprises seeking to sell their items.
However, e-commerce companies frequently overlook the several disadvantages of advertising their items on these platforms:
- Because you do not have a unique selling point, selling on these platforms raises competition for your firm.
- When users search for a product on Amazon, eBay, or Shopee, they will get hundreds of results.
- Most users never scroll past the first page of search results.
- Therefore, if there are more than 20 sellers offering the same goods as you, it becomes exceedingly challenging to get clients' attention.
- Another problem is that these e-commerce websites demand large transaction fees for each sale made on their platform.
Even if your company's annual sales and profits are increasing, the majority of your profit will be eaten up by the commission fees levied by these e-commerce companies.
Even if you spend thousands on advertising, you will not be able to reach your intended audience. The optimal method is to maintain your own website, where you can track all visitors and receive sales leads directly from your clients.
While it is feasible to sell things on Amazon, eBay, and Lazada, each of these sites has constraints. When you have your own e-commerce website, you have the ability to do things that are unachievable on a third-party platform.
3. What are the benefits of an e-commerce website?
A. Control management
The obvious benefit is that you have complete control over your own e-commerce website. This means you can make website changes without permission or a process.
Also, you can change product details, pricing, and photos in real-time. In fact, other marketplace websites don't offer this versatility, so if you want to swiftly modify your products or rates based on seasonality or demand, consider this.
B. Not affected by third-party policy
Apparently, third-party websites like Amazon, eBay, and Shopee are useful for selling your product.
However, what if they change their policies and you can't sell on their site? What if they take down your product for breaching their terms and conditions, but you didn't know? What if they close their site, leaving you scurrying to sell your products?
If any of these sound familiar, you should consider creating a website.
Indeed, you control more than you realize. Once your site is live, you decide the design and items. You don't have to worry about compliance or whether something violates someone else's terms and conditions; simply focus on your consumers.
C. Commission Fees
With your own e-commerce website, no one is able to impose restrictions on how much you may charge for your items or how much of a discount you can offer.
Frequently, the commission rates imposed by third-party websites are so high that the prices of the products displayed on these websites are prohibitively exorbitant for end consumers. Likewise, you cannot provide discounts if the website's policy forbids it.
A self-hosted e-commerce website, on the other hand, enables you to establish your own prices and change them at will. In addition, you can provide discounts whenever you desire to increase sales. This is because, unlike a third-party website, you do not need to worry about violating their policies.
D. Added Features
If you believe that your own e-commerce website will cost significantly, you then may have second thoughts. There are numerous advantages to establishing your own e-commerce website, including the possibility of a substantial return on investment.
When attempting to sell things online, it is common knowledge that a fully-customized e-commerce store is optimal. However, you may wonder whether it is worthwhile to invest in your own website.
You can add whatever additional features you desire to your self-hosted e-commerce website; add live chat to your website if you wish to participate in real-time communication with your site's users. Alternatively, if you like for people to view your Instagram gallery, simply embed it into your page. Since you have complete control over the site's content and style, the possibilities are limitless!
4. How Does An E-commerce Website Operate?
After considering the advantages of e-commerce websites, you may wonder how it works, and if their operation fits your business. Therefore, we provide some critical steps of how an e-commerce website works.
E-commerce websites operate in a sequence of phases that involve the use of website code, a database, and third-party programs such as a payment processor or payment gateway.
SSL certificates are used by e-commerce websites to safeguard and encrypt all transferred data. Sensitive data, such as credit card information, should never be maintained in a website's database unless the website complies with all basic requirements, including PCI Compliance.
E-commerce websites often operate as follows:
1. A potential consumer reaches an e-commerce website via search engines, paid marketing, referral traffic, and so on.
2. The e-commerce website is linked to a database that holds a wealth of information on the website's categories, items, product dimensions, and weight, articles and content, photos, and so on. The website requests this data in order to automatically render any required web pages.
3. A potential consumer browses the e-commerce website, adds a product or service to their online shopping cart, and then proceeds to the checkout page.
4. The customer finishes the checkout process and completes the transaction.
5. The shopper's credit card information is encrypted and transmitted to a Payment Gateway (such as PayPal) for safe and remote credit card processing.
6. Once the order has been completed and payment has been received, the website will normally provide an expected shipping time, a unique transaction number, a postal tracking number, and so on. The majority of these operations are automated and are part of the basic functionality of a successful e-commerce website.
7. Orders are kept in the website admin and transmitted to a fulfillment team as transactions occur. Order fulfillment can be managed internally or outsourced to a third party/drop shipper.
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Final thoughts
There are numerous advantages to having a self-built e-commerce website. Certainly, your satisfaction involves having more control over how your brand looks, which is a simpler approach to keeping in touch with customers and saving more time. You will also have the ability to make your e-commerce website creation as unique as feasible. If you are considering building your own e-commerce website, have a look at our services!
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