What is an e-commerce platform?
An e-commerce platform is a software which allows businesses and customers to buy and sell products and services online. It includes a catalog of products, payment methods, templates and databases, which can be customized depending on each businesses’ needs.
Some well-known e-commerce platforms include:
- Shopify
- BigCommerce
- WooCommerce
- Squarespace
- Prestashop
- Etc.
Among the most common configuration possibilities, the following stand out: design customization, product publication (photos and descriptions), shipping and payment management, integration with marketing tools, and advanced SEO administration.
What is SaaS?
Software as a service (SaaS) is a software distribution and marketing model. Some classic SaaS company archetypes today are Netflix, Slack, Salesforce, and Spotify. Through a prepaid monthly fee and a connection, infrastructure and technology are made available to the user in their respective niches.
Through intelligent systems, which do not require any type of technical or programming knowledge, a SaaS allows the client to personalize, manage and, often, integrate their profile with other platforms or systems. For example, Spotify allows the creation and edition of playlists and gives users the option to share a song on Instagram Stories.
Security and maintenance are two other characteristics of a SaaS. Access is made via the internet and all data is stored in the cloud. Regarding maintenance, the software update depends on the SaaS company, which makes updates automatically. In this way, the user does not have to worry about making improvements to the system.
Is it hard to start an e-commerce business?
Creating an online store does not require much effort. However, the hardest part of starting an eCommerce business is, apart from having a good product idea and business model, getting visitors to the website, and then converting them into buyers.
What are the 5 types of eCommerce businesses?
The types of eCommerce businesses are defined based on the nature of the business that exists in each of the parts of the transaction. A company that sells to another is not the same as a company selling to individuals. Neither are individuals who sell or exchange goods with each other. In the following paragraphs, we explain in detail what the 5 main types of eCommerce businesses are.
B2B e-commerce
B2B e-commerce, also known as business-to-business, is a type of e-commerce in which business transactions take place between two companies. This type of transaction does not involve consumers or individuals, only companies. Typical examples of B2B business models are wholesalers and retailers. Wholesalers sell to retailers and retailers sell to end customers.
In this case, there are 3 types of B2B e-commerce:
- Seller seeks buyers
- Buyers seek a seller
- Intermediaries seek transactions between buyers and sellers
Here are some tips that will come in handy if you want to start a B2B e-commerce business:
- To start a B2B business, you must have a thorough knowledge of the industry you will be working in.
- It’s also highly recommended that you have experience in high-volume negotiation, as well as experience in the entire logistical process involved in wholesale transactions.
B2C e-commerce
This type of eCommerce stands for business to consumer and is probably the one you are most familiar with. In this case, the commercial transaction is between a company and a consumer. Think of generic online stores, most of them are part of this type of e-commerce business.
Here are some useful tips to consider if you want to start a B2C e-commerce business:
- Cloud services like Shopify or WooCommerce are very useful if you want to get started in B2C quickly and without making a big investment.
- If you want to start a B2C business, the best thing you can do is to position yourself in a very specific and defined market niche.
Why is Woocommerce perfect for eCommerce startups?
C2C e-commerce
The acronym C2C stands for consumer-to-consumer, i.e. trade that takes place between consumers and end users. In this type of business, wholesale companies and suppliers do not intervene directly. This means that it’s the consumers who sell second-hand products that they no longer use.
Before the internet and social networks existed, this type of business was very common when neighbors moved house or cleaned the house once a year, for example! Are you familiar with garage sales? Well, it’s something like that! Today, the Internet is very useful for anyone that wants to sell products online that they no longer use to other consumers.
The C2C business model has reached the point where product categories have a dedicated platform specifically for that. Some examples of popular C2C e-commerce businesses are:
- eBay
- Fiverr
- Amazon Marketplace
- Facebook Marketplace
- Vinted
B2E e-commerce
This type of eCommerce is called business to employees. What is it exactly? Well, it’s a type of eCommerce in which the transaction takes place between the company and the employee. It consists of the company making available different products for purchase to its employees, usually at a better price, with discounts or offering additional benefits. Generally, these products can be purchased through an intranet or a specific online store used by the employees themselves.
There is a type of strategy called Employer Branding where B2E plays a key role. Employer branding takes shape in a context where most economic sectors are already at an advanced stage, and one of the most important things to differentiate themselves from other companies is the talent of their employees.
Employer branding aims to demonstrate that the company is a better place to work at than its competitors. It’s very useful to attract the attention of potential employees and usually, if done correctly, it works wonders! Employer branding strategies include offering employee benefits such as annual bonuses, company trips or meal vouchers, as well as the possibility to buy company products at a better price.
Here are a few tips that will help you if you want to start a B2C business:
- Even if you are a small or start-up company, you can make use of B2E e-commerce. With something as simple as a discount code or coupon, your employees can buy your products at a much better price. This can be instrumental in differentiating you from your competition and attracting the best employees.
- B2E motivates your employees and makes them more loyal to your company. If the benefits are interesting and attractive, you will have happy employees who will want to stay in your company.
G2C e-commerc
G2C stands for government to the consumer. This is a rather peculiar type of eCommerce, to say the least. It happens when a state, regional or federal government makes available to all citizens a virtual platform to do all kinds of procedures such as pay taxes.
You may be wondering why it’s considered an eCommerce. Well, basically because economic transactions take place. However, some of its main benefits are saving time and public resources. With G2C you can automate processes and have more control over transactions to save time for everyone.
Now that you know the main types of e-commerce business models that exist, you can choose the one that best suits your idea and build your business around that model. Your choice will vary depending on the goals you have and many other factors.
Steps to start an eCommerce business
1. Define the name and domain for your business
It may sound simple, but around 70% of the names you come up with will not be available or will be very similar to others. If you already have your own brand or company registered, this step will be easier for you. However, if you are starting from scratch and with a business that is 100% online, the choice of the name and domain is key to start your business off on the right foot.
2. Hire a hosting service
Web hosting is where you will host your online store. It’s very important that you choose the right hosting service from the beginning, because later the change can be quite cumbersome.
Here are some considerations you should take into account:
- Check the ranking of different hosting services to see which ones are the best.
- Consider the benefits and prices of the services they offer.
- The customer service they provide is key. Make sure they speak your language and are available 24/7.
3. Choose the best technology platform
Nowadays, you will see that there are different technological solutions for the development of your online store:
- Open Source (free) online store platforms, such as Prestashop or Woocommerce, offer you the best options for creating your online store.
- There are also other options such as online store platforms in the cloud like Shopify. These are more user-friendly, but you will have to pay a price.
- Custom solutions are another option. We do not recommend these unless you want something very specific that is out of the standard of an online store. They usually involve a higher cost and a lot of dependence on the provider at a technical level.
4. Set up your online store
If you have already chosen your online store platform, you will have to configure it and set it up to start selling your products. You must choose how you want to organize your product catalog (categories, etc.), what information you will include in your products’ data sheet, which design templates you will choose, to which countries you will sell, etc.
5. Select the type of payment
It’s essential that your online store is prepared so that your potential customers feel safe and confident at the time of paying and do not abandon their purchase.
6. Include legal aspects
An online store is subject to a few legal issues that must be met such as:
- General data protection regulation
- Cookie laws
- E-commerce laws
If you overlook these aspects, you can be subject to considerable fines.
6. Prepare the logistics for shipment
If you are going to sell physical products, this will be a strategic point for your business. Why? Well, it will greatly influence the profitability of your business and the satisfaction and loyalty of your customers. At this point, you have to consider how you will manage your stock and which courier company or companies you will work with.
7. Promote your online store
Now that you have your online store set up, your catalog installed and everything ready to start selling, you must think about what to do so that people find you on the Internet. Honestly, visits and customers will not come to your website on their own. You have to define your target audience and develop a solid marketing strategy.
It’s very important to implement all areas of digital marketing to attract people to your online store and get them to buy from you: SEO, social media, email marketing, blog, affiliate marketing, SEM, etc.
8. Analyze the performance of your online store
Once your online store is up and running, you need to take some time to analyze how you are doing and which online sales channels are performing better or worse. Based on the data you collect, you will draw conclusions to take the appropriate actions to continue improving your sales. The best tool to measure your results is Google Analytics. It’s a popular tool because it’s free and it integrates easily with all online store platforms.
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