Many have heard the term “ecommerce” but are a bit confused as to what it means. While ecommerce is often thought of as a company that does business online, it’s more than just sales. Ecommerce can encompass a number of transactions that take place online. Let’s take a closer look to determine what ecommerce really is.

Basic Description

The basic definition of electronic commerce is the transfer of information through the internet between customers and businesses or businesses to other businesses. That makes ecommerce seem like a very broad concept and it really is. In fact, ecommerce is one of the most important functions of the internet.

More Than Just Sales

As mentioned above, ecommerce is more than just sales. While you may think of ecommerce as a purchase you make from Amazon, it’s much more than that. The transactions you make through your bank’s website, your use of PayPal, and your subscription service to Netflix are all considered ecommerce. Even when you purchase stock online, that’s considered ecommerce.

Benefits

There are so many benefits to ecommerce. Not only does ecommerce allow customers and businesses that are thousands of miles apart to complete a transaction, but if you run an ecommerce site, you’ll more than likely have less overhead. Not to mention that ecommerce transactions are often much faster to complete. The customer can easily find what they need through advanced search methods and checkout with express checkout. It’s much, much better than traditional commerce.

Disadvantages

While ecommerce does have many perks, there can also be disadvantages. Ecommerce does require time, research, and an investment. If you don’t know how to build a website, you will need to hire someone who does. Also, some customers are still leery of online stores. Your business is also limited to online shoppers.

Is Ecommerce for You?

If you’re starting a business, you may wonder if ecommerce is the way to go. The truth is you may have a better chance at being successful online, especially if you can offer something unique. When you have a traditional business, you are limited to a smaller clientele, which may not have enough target customers to help your business be successful. When you setup shop online, you’re able to reach literally millions of shoppers.

Ecommerce is what keeps the internet alive. Without online transactions and sales, it would cost a small fortune to use the internet. The sites you use on a daily basis, such as Facebook, wouldn’t be able to run without paid memberships. In other words, ecommerce opened up the doors to make the internet available to the masses.

About the Author: Brian Moons is a web developer with his own business and he loves helping his clients develop all sorts of sites, including ecommerce sites. If you’re just starting out, consider a magento theme – something simple that will help you launch without a ton of overhead.