You much probably heard the terms e-business and e-commerce used as if they are synonymous. Another sibling of these two is the term e-tail, which represents the procedures of all the transactions around eCommerce.


In the last couple of years, and especially 2020 which was supported by the hit of the pandemic, eCommerce has seen mind-giggling highs. In 2007, eCommerce made up 5.1% of complete retail sales; in 2020, e-commerce comprised 19.0%.


In this short article, we will look deeper into what is eCommerce. We will run through how eCommerce works, and share some crucial advantages and disadvantages. Let's dig right in!


What Is Ecommerce?


E-commerce - also known as electronic commerce, web commerce, and online commerce - is a business model which involves purchases taking place online. Stores that market their items online are eCommerce shops or businesses. As an example, Amazon.com is one of the most popular online shops in the eCommerce industry.


Ecommerce must not be confused with e-business. Although often utilized interchangeably, the terms are not associated. Ecommerce particularly means the purchase of goods and services, whereas e-business describes all facets of operating an online business.


How does eCommerce work?


eCommerce is a kind of shopping that is powered by the internet, where products or services are bought and sold through online platforms. As soon as the order is placed, the customer's browser will connect to and fro with the server hosting the e-commerce shop.


Data pertaining to the order will then be communicated to a central computer known as the order manager - then sent to databases that manage inventory levels, a merchant program that manages payment information, and a bank computer - before circling back to the order manager. This is to confirm that both store stock and the customer funds are enough for completing the transaction.


After the order is validated, the order manager will inform the shop's online server, which will after that show a message notifying the customer that their order has been successfully completed. The order manager will then send order information to the storehouse or fulfillment department, in order for the product and services to be effectively delivered to the consumer. And now, tangible or digital items might be shipped to a customer, or accessibility to a service may be granted.


Platforms that host e-commerce purchases may include online markets that sellers simply enroll in, such as Amazon; software as a service (SaaS) devices that allow customers to 'rent' online store facilities; or open-source tools for companies to use in-house advancement to manage.


The advantages and disadvantages of eCommerce


E-commerce offers customers the below benefits:

  • Convenience - Ecommerce can happen 24 hrs a day, 7 days a week.
  • Increased selection - Many stores use a larger variety of products online than they carry in their brick-and-mortar equivalents. And several shops that only exist online may offer customers exclusive stock that is unavailable in other places.


E-commerce has the following disadvantages:


  • Minimal customer service - If you are shopping online for a computer, you can not merely ask an employee to demonstrate a particular model’s attributes face to face. And although some online sites let you talk online with personnel, this is not a standard practice.
  • Lack of instant pleasure - When you buy a product online, you must wait on it to be delivered to your home or office. Retailers like Amazon make the waiting game a little bit less painful by using same-day delivery as a premium option for certain products.

Inability to touch products - Online photos do not always tell the whole story about an item, and so e-commerce purchases can be unfulfilling when the products received do not match customer expectations. The main point: a clothing item may be made from inferior textile than its online image suggests.