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What is an ecommerce business?

Ecommerce or electronic commerce is the practice of buying and selling goods or services via the Internet. It relies on technology and innovative computer systems to electronically transfer funds, process payments, manage supply chains, deliver goods or services, and track inventory.

An ecommerce business has the ability to function exclusively online without the high cost of a traditional brick and mortar location.

The most effective approach in understanding an ecommerce business is to think of ecommerce as a living organism similar to the human body. The human body relies on its legs to walk, arms to reach, and feet to stand. Likewise, to conduct business in a manner that is seamless, purposeful, and satisfying to customers an ecommerce business is made up of many parts that aide in its operation.

Its heart uses cutting edgy technology to simplify the way customers interact with the business. Its arms build and craft marketing strategies and sales funnels. Its legs keep the business grounded yet agile, as it works to meet the demands of customers. Its eyes watch the market intently for white space or areas of improvement.

To operate effectively and for profit, understanding the role of each part of an ecommerce business is essential for success.

Ecommerce businesses harness the power of technology.

Traditionally buying and selling transactions involve the exchange of products or services for currency. The initial exchange between the business and customer is direct and often includes a quote, physical receipt, and the delivery of products (or services). Traditional businesses rely on effective salesperson to close the deal and an aesthetically pleasing store to present its offerings to customers.


However, an ecommerce business relies completely on technology to conduct business and close sales. This technology often begins with an ecommerce store platform.

Other essential technology and software includes:

  • Payment processing

  • Order tracking

  • Team management portals

  • Customer relationship management (CRM) softwares

  • Miscellaneous technology

Your ecommerce platform is the heartbeat of your ecommerce business and does the heavy lifting. Choose a platform that is easy to use and offers valuable user forums and training to help you learn how to get the most out of the platform. Ecommerce platforms that support unique branding, host a blog, and is easily integrated with social media are recommended for most ecommerce business solutions such as Shopify.

Payment processing handles the way customers pay for products or services. Examples of payment processors designed to support ecommerce businesses include Paypal, Stripe, and Payline. To process payments online, an SSL certificate is recommended. An SSL certificate is purchased separately from your domain name. It is associated with your ecommerce business and designed to protect customer payment information and transactions.

When considering the best payment processing for your ecommerce business determine if you want your business to process payments directly or be redirected to a payment gateway. Also double check that your preferred payment processor is supported by your ecommerce platform.

To run your store effectively after it has been successfully established requires a team; and this team needs a virtual office. Your team for your ecommerce business most likely will include a front end designer, a website engineer, copywriter, and floating roles to support each. To connect your team and coordinate tasks you need to consider a project management software that is lightweight and easy to navigate. Relying strictly on emails to coordinate projects is tedious and makes it a challenge to monitor your team’s progress and get things done in a timely fashion.

Recommended project management platforms include Wrike, Basecamp, Podio, Asana, and Trello (a free solution).

Ecommerce businesses thrive on repeat business. In a recent study by BigCommerce, 43 percent of online stores received revenue from repeat customers. It also revealed that businesses that have mastered how to get repeat purchases from customers are getting up to 75 percent of their revenue from repeat customers.

CRM is not an option for ecommerce businesses - is is essential for success.

Nurturing and establishing relationships with your customers is the lifeline of online selling. Managing customer relationships involves developing an email marketing campaign, establishing loyalty programs, asking feedback and reviews, and engaging with customers across various platforms including social media and blogs.

As you embark on launching an ecommerce business you are bound to face tough decisions and lots of confusion. Remember, that the key to launching an ecommerce business is embracing technology that makes sense for your business and most importantly - for you.

Online businesses develop effective strategies.

It is not likely that as a startup you will require robust marketing automation similar to those offered by Hubspot and Infusionsoft. Instead, keep things simple and affordable. Consider real world solutions for entrepreneurs such as Drip and MailChimp.

One of the most important parts of an ecommerce business is developing effective strategies. These strategies must establish your brand, retain customers, and continuously improve your offerings and products. Creating a strategy starts with setting a tangible goal or objective.

Once the objective is set you are able to clearly define what is needed to operate your ecommerce business.

At The Kewl Shop, we noticed a large hole in the women’s apparel market for affordable, designer quality bandage dresses. We recognized that most women could not afford to drop $1,200 or more on a single dress. Our objective was to identify a quality source to manufacture quality dresses. These dresses would feature designs inspired by those worn by celebrities and socialites.

To provide proof that our dresses were designer quality without the price tag we actively asked influential fashion bloggers from around the world to wear our dresses and share their style and feedback. This approached achieved our initial objective to make designer dresses affordable for real women.

Digital businesses meet the demands of customers.

To thrive online ecommerce businesses must do more than simply sell products or offer services. Successful ecommerce businesses establish themselves as leaders in their niche or industry.

If you fail to establish a solid and tangible objective your ecommerce business you may end up wasting resources, time, and money. An effective strategy must detail why, what, and how you plan to achieve your objective. It also explains what achieving your objective will look like and what to expect.

When working to understand what an ecommerce business does, consider the requirements to succeed as a traditional business. Standing out among competitors takes branding, strategic advertising, and a healthy grasp of business sense.

Launching an ecommerce business requires that you have a firm understanding of the basic principles of how the Internet works. To properly meet the demands of your customers you must utilize servers, understand how hosting works, use domain names to establish your brand, and budget for advertising.

To meet the demands of your customers online you have limited opportunities to close the sale. Attention to detail, customer sales funnels, and branding are all key elements to meeting the demands of your customers as an ecommerce business.

Your online brand has approximately 15 seconds to engage prospective customers through the presentation of products and words on a screen. Successful ecommerce businesses understand strategic user experience planning and development is required to meet the demands and expectations of customers and budget accordingly.

Successful ecommerce businesses identify white space.

Every business must carve its own place within its market and niche. Identifying white space as an ecommerce business positions your ecommerce business for success. In 2014, it was reported that 75 percent domain names purchased and register were parked or not live. In 2015, Google reported processing approximately 3.5 million searches a day. Of those searches up to 20 percent of those searches had never been searched before.

One of the most important mindsets of launching an ecommerce business is understanding that the market is what you make it. Carving out your own white space means meeting the needs of customers in your chosen niche while also giving you the leverage to establish your brand as an authority.

When developing The Kewl Shop we played around with offering various essentials in a women’s wardrobe such as leggings, shoes, and swimwear. However, after fumbling around in our niche for year we slowly began to identify white space. We discovered that customers were searching for quality and affordable designer bandage dresses observed on celebrities and socialites.

Thus, we updated our strategy and shifted from women’s apparel to offering high quality bandage dresses. We began to network to find dressmakers that could partner with us in our efforts to bring quality designer inspired bandage dresses to real women at affordable prices. Additionally, as part of this strategy we also began establishing ourselves as authorities on bandage dresses.

We implemented a detailed and targeted outreach strategy that involved influential fashion bloggers and a relevant inbound marketing campaign covering authoritative topics. For example, our articles featuring topics about bandage dresses such as, Everything You Ever Wanted to Know About Bandage Dresses deliver valuable organic traffic to our website every month.

Building an ecommerce business takes perseverance, planning, and focus.

An essential part of understanding what an ecommerce business is and how it operates is to think of it as a living organism. To successfully run an ecommerce business that is profitable and requires many moving parts.

Cutting edge technology is the heart of every ecommerce business while developing strategies are the arms that carry it to success. To operate effectively your ecommerce store requires strong legs to keep it agile and ab to meet the demands of your customers.

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