What is Ecommerce?
Ecommerce stands for electronic commerce. Electronic commerce is selling your goods and services online through a website. With the advent of ecommerce, you are no longer limited to a single geographic location and a single brick and mortar storefront. This means your potential customer base is the entire planet.
Online Selling Process
Selling products and services online follows the following steps:
- A potential customer visits your web site.
- The customer reads the sales letter or browses through your online catalog.
- If the customer finds something they like and want, they will click on either the “Buy Now” or the “Add to Cart” button.
- The product is added to their shopping cart. If there is only one product, they will immediately go to the checkout step.
- Otherwise, after they finish shopping, the customer clicks on the “Checkout” button.
- They are sent to a secure web page where their credit card and shipping information is collected using a secure online form.
- The data on the form is sent to the payment gateway service and then transmitted to the store's Merchant account.
- The transaction is verified with the customer's credit card company.
- If the transaction is approved, the customer's credit card is charged and the funds added to the store's merchant account. The customer is sent to a “Thank You Page” and a program on your web site sends out a confirmation email.
- If the transaction is denied, an error message is sent to the customer and the transaction is terminated.
- For all successful transactions, you must fulfill your customer's order. For electronic goods, you must send them the information on how to download their products. For physical goods, order picking, packing and shipping must be arranged.
- Finally, once the collected funds have cleared through the banking system, the money can be transferred to you business or personal bank account.
What Is An Online Store?
On online store is a website that has a product catalog, a shopping cart to hold customer purchases until checkout, a payment processing system connected to a merchant account at a bank and a method of delivering purchased items to the customer.
There are four main kinds of online storefronts:
Independent storefronts – an Independent storefront is a web site owned and operated by the business owner. This method allows the business to maintain its individuality while providing easy administration that is usually web browser based. However, this solution leaves the business owner the task of generating demand for their goods or services and traffic for their website.
Portal Storefronts – A portal is a website whose sole function is to advertise the stores who subscribe to the portal service. It is the electronic equivalent of a shopping center. They allow you to create individual stores within an existing website that usually has a large amount of traffic. Two examples of portal sites are Amazon's zShops and Yahoo! stores.
The advantages of a portal storefront are low cost, ease of administration, large amounts of traffic and the users already trust the hosting website. The major disadvantage of a portal storefront is lack of individuality. You are just one of many stores on the site. Another disadvantage is if another store sells the same products or services, you are listed side-by-side and unless you match their price, you will definitely lose sales.
Auctions - Auctions eliminate the need to maintain a storefront but still allow a business to sell their products. Auctions are best suited to specialty or niche products that are not sold in large quantities. Two examples of auction sites are eBay and Amazon.com Auctions.
Affiliate Programs - Affiliate programs allow you to sell other people's products on your website and earn a commission on the sale. For example, a landscaper could link to a gardening supply house so his customers could purchase other items for their gardens. There are affiliate programs for almost every kind of product imaginable.
 
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