E-Commerce in a nutshell

Many of us, if not all, have already used online sites to buy or probably sell goods or services. As an example, facebook launched its new platform called Facebook Marketplace to facilitate buy and sell. Amazon started online selling of books and is now a giant tech company.

The future of e-commerce is thriving exponentially these days. Given that the advantages of having an online platform obviously outweigh its cons – it is worth to consider setting up an online site where customers can place their orders. If you already have a brick-and-mortar business, you can expand your target customers if you have online facility.

While if you don’t have current physical store, you can take advantage of putting up a virtual store and start a business that does not require you to rent a place. Trust me, you will only need to have little capital, followed by good business network and you should be all set.

Before getting into details on how to setup an e-commerce site – it is necessary to understand the basics. The most common business model that we usually see everyday is Business to Customer (B2C). Then there are business models such as Business to Business (B2B), Customer to Business (C2B) and Customer to Customer (C2C). All these business models can be implemented online so if your idea or current setup belongs to any of those models then e-Commerce is definitely something you can explore.

Thanks to the power of internet technology as it enables each business entity to connect to each other without manual intervention. And the perfect example is the integration of payment and delivery services to an e-commerce site.

Let’s talk about a basic scenario on how e-commerce works as in the B2C model for a fully integrated e-commerce site:

  1. Customer browsed available products you posted online.

  2. Placed order until checkout which requires payment.

  3. Pay online using credit card or PayPal (or any other payment method).

For the three steps above, it looks like the customer just placed an order in only few minutes – but there are many things going on in the back-end of your e-commerce site depending on what is your business revenue model.

Let’s say that you are re-selling products and you have the stocks on hand. These might be what’s going to happen behind the scene:

  1. Your e-commerce site updated your available stock on-hand.

  2. The payment done by the customer went directly to the account you have setup with e-payment merchant. You probably may have online access to the e-payment’s platform to verify what payment went through.

  3. The delivery merchant is notified by your online site that there is an order ready for pick-up – with information like order details, customer information (name, address, contact, etc.).

  4. After the product is shipped to the seller, the delivery merchant provided an update on their system that the order has been successfully shipped. Your e-commerce site then receives a notification that the oder has been successfully delivered and the system will tag the order as completed.

Seems straightforward but there is a caveat. Anything on the behind process can possibly fail so you don’t expect that all transactions are smooth. What do you need to consider then? Let’s discuss some of the basic points that you should be mindful about.

  • How will you handle order return or exchange? You need to define parameters on where the customers can send the goods back to you so you can replace it. You may want to have an online feature related to return or exchange for better tracking.

  • What about refund? There should be a policy on how you will handle this situation. A scenario that could happen where refund might be necessary is if the goods are defective.

  • For the example we used above, the approach is you have the goods on hand so you might find it easier to handle it. In some revenue models approach – you may find a different way of handling situations like return/exchange. For instance, you are only setting up e-commerce front but the goods will come directly from the supplier or manufacturer – you might need to think about how you will ensure that customers are receiving the correct orders, etc.

Setting up an online facility to sell products or services may be straightforward but you also have to consider how to integrate with third-party vendors (payment, delivery, suppliers, etc.). Anent to this – you will need to have someone or a team to maintain the e-commerce site. Let’s talk about how you will implement your e-commerce in a high-level.

  1. Using readily available e-commerce platform such as Shopify, WooCommerce, Magento, Wix and many more.

  2. Hire a software development firm to create a custom online shop. This definitely will be costly not only the implementation but the maintenance as well.

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