.png)
An e-commerce website is a platform that has an important role for a business. Come on, see more about what an e-commerce website is. An e-commerce website is a website that can be used for buying and selling online.
Through an e-commerce website, you as a businessman can process orders, receive payments, manage shipping and logistics, and provide customer support services.
As technology advances, it is starting to shift people's shopping trends. Now, the majority of people prefer to shop online. This phenomenon has helped the growth of e-commerce websites significantly.
According to RedSeer analysis quoted from Katadata, the value of Indonesian e-commerce transactions could reach US$86 billion in 2022. This amount will continue to increase until it reaches US$104 billion in 2023 and US$121 billion in 2024.
What is E-commerce?
The meaning of eCommerce is Electronic Commerce, which in Indonesian means Electronic Commerce or E-commerce. However, the definition of e-commerce does not only include online shopping activities, but also various activities that involve online transactions, such as internet banking and e-wallets, to ordering tickets, accommodation and online auctions.
Electronic commerce or e-commerce is a process of buying and selling transactions which in practice are carried out online via electronic media. According to Laudon & Laudon, e-commerce is a business to business transaction that occurs through the internet network.
In the world of commerce, e-commerce offers many changes. The buying and selling process no longer requires face-to-face meetings like in conventional stores. Sellers and buyers only need to process transactions online.
Well, with the increasing number of opportunities and ways to make money from the Internet, you must have wanted to try an E-commerce business too. Who doesn't want to earn extra income without having to spend a lot of capital to build a physical store?
People who want to sell goods or services and shop simply click on their gadget screen, then just sit back and wait for the goods to arrive in their hands. For example, there are giant online retailers such as Amazon and Walmart, which are some of the most popular examples of E-Commerce websites today.
Types of E-Commerce that Exist Today
After discussing what E-Commerce is and its benefits, next we will discuss the types of e-commerce based on the business model. E-commerce business models are categorized based on the parties involved in the transaction.
For more details, here are the 4 types of e-commerce that currently exist:
1. Business to Consumer (B2C)
The B2C business model is a business system that involves companies selling products and services directly to consumers.
From a consumer perspective, the definition of B2C is when you buy an item from a brand's official website. For example, you buy a cell phone from apple.com, or shoes from adidas.com.
B2C actually does not only include product sales. This business model can also be based on services, such as Lawn Guru and Housecall Pro.
Compared to other models, B2C is the most common and easy to understand model.
2. Business to Business (B2B)
The Business to Business or B2B business model is when both parties, both seller and buyer, are both business entities.
Typically, these transactions occur when a business requires raw materials for their final product.
An example of B2B is a vehicle manufacturing company. In the process, vehicle sellers or retailers purchase components or spare parts from manufacturers. These transactions may include the purchase of tires, rubber hoses, and windshield wipers.
Therefore, this type of Business to Business model usually produces high volume sales and on a regular basis.
Some companies that use the B2B business model are Berlin Packaging, Flexfire LED, and Bulk Bookstore.
3. Consumer to Business (C2B)
The next type of e-commerce is C2B, which is when individual sellers sell goods and services to companies. This method allows buyers to determine their own prices.
Freelance sites and affiliate programs are categorized as C2B business models. Examples are Upwork, Hubstaff Talent, and Fiverr.
4. Consumer to Consumer (C2C)
The C2C business model is when consumers transact with fellow consumers. Individual sellers will sell their products to individual consumers via the Internet.
This process usually involves an online marketplace intermediary.
In this case, B2C sites such as eBay and Craigslist can help someone sell products to other people if they already have an account.
Benefits of E-commerce Websites
Whether for large or small scale business owners, the presence of e-commerce is very useful. Here are some benefits of e-commerce websites that you need to understand:
1. Help Manage Online Business
The first use of an e-commerce website is that of course it can make it easier for you to manage your online business. You can sell online on your own website without the hassle of competing with competitors like in the marketplace.
By building e-commerce from scratch independently, you can also adjust each feature according to your needs. Because, you are the one who knows what a website needs for online sales.
2. Reach More Customers
With e-commerce, you can also reach more customers, you know. Not only domestically, but can also penetrate the global market. This is because your e-commerce is easier to find on the internet. So, anyone can come to visit and shop.
No matter whether your business is small or large, there will always be customers who have the potential to buy.
Moreover, online shopping has become an activity to obtain practical needs. So, e-commerce will always exist among customers.
3. Can be accessed at any time
The next advantage offered by e-commerce is that it can be accessed at any time. For you as the owner, this is certainly very profitable. Because, you can manage your online business at any time. With just a gadget, you can manage orders and send them to customers.
As long as you have gadgets and the internet, you can still monitor your online business in e-commerce from anywhere. Be it at the office, home, or abroad.
4. More Cost Effective
When compared to setting up a physical shop, running a business using e-commerce is certainly much more cost-effective. You don't need to rent a business space that drains your wallet. Apart from that, you as a business owner do not need to open many sales and distribution branches.
Just with a website, you can be successful selling online. The customer order process can also be done more easily and quickly. This will increase profits by reducing operational costs. Because, you don't need to pay rent for business premises and employees.
5. Operational Hours Anytime
If you sell by opening a physical shop, of course there will be operating hours and they will usually be very limited. Because, you need employees who can always be on standby to look after the shop. However, with e-commerce, your business can have operational hours at any time. For 24 hours and 7 full days.
In other words, customers can make transactions at any time. Whether it's morning, afternoon, afternoon, or late at night. Customers can also get the products or services they need without any time limit.
This long operational time allows you to increase sales. Imagine if you did it in a physical store, you would have to spend a lot of money to pay employees who work overtime.
6. Measure Sales Easily
The next use of e-commerce for online businesses is that it can help you measure sales more easily and accurately. This is because online sales websites usually have analytics features. So, you can analyze all the stored data easily.
Starting from knowing sales effectiveness, studying customer behavior, understanding marketing campaigns, customer engagement, and much more.
7. Increase Customer Convenience
Another advantage of e-commerce compared to opening a business with a physical store is the matter of convenience. Customers can shop more comfortably through online sales websites. Why is that?
Because online shopping can save time without having to go to the store. Customers only need to open your website, then check the product, and if it is suitable, order it immediately.
Their orders can also be sent directly to the destination address without needing to leave the house. Practical!
8. Understand Customers Better
E-commerce is a sales channel that can help you understand customers better. This is because websites allow you to collect live data by tracking how customers engage with your online store.
For example, by analyzing customers' habits, likes or dislikes. With deeper customer insight like this, you can create the right marketing strategy.
Apart from that, it can improve the quality of products and services better. To make the website more comfortable in the eyes of customers. This way, customers can be more satisfied when shopping at your online store.
9. Various Payment Methods
With an e-commerce website, you can provide a wider variety of payment methods. Starting from virtual accounts from m-banking, debit and credit, e-wallet, to payments that can be made through minimarkets.
The existence of varied payment methods like this also creates freedom for customers to choose. They can shop with the desired payment system.
Apart from that, customers feel more comfortable when shopping online via e-commerce because of the security system.
10. Better Communication with Customers
Using an e-commerce website to sell online allows you to communicate better with customers. For example, by providing fast-responsive customer support services. Customers can also ask questions or complain more comfortably and feel helped.
Customer shopping history can also be an important source of information for providing offers. You can contact customers via email marketing or chat applications, such as WhatsApp, from customer data who have checked out.
Marketing techniques like this are considered more personal and can build closeness with customers. So, your marketing is more effective.
How to Start a Successful E-Commerce Business
You have learned what e-commerce is, the benefits and types of e-commerce along with examples. If you want to take things more seriously, here are ways to start e-commerce that you can try:
Step 1: Determine the business area
Research first about online sales that are selling well or the services you want to sell. It's best to choose an online business idea that will produce results in the long term and is easy to adapt to future needs.
The criteria for goods and services that will sell enough are:
a. Able to solve consumer problems
By solving consumer problems, it means your product or service is able to meet their needs. Whether it's as simple as a laundry service for dirty pillows, to maybe hearing aids at affordable prices.
To start, observe the daily activities that people are too lazy to do. Ask friends or family, or you can also take an online survey.
b. Targeting certain hobbies
Selling hobby-related items means you are targeting specific consumers. Consumers who enjoy certain hobbies tend to be willing to dig deeper into their pockets because of the emotional connection they have with the products they want to buy.
An example is Wilton, a retailer that supplies cake-making ingredients which provides products for various groups. Then there is Wayfair for home decor, and Bluemoon for scrapbook lovers. To find inspiration, you can find out several hobbies that are quite popular among people.
c. Following or creating a trend
Present your brand as a pioneer by identifying trends early. If you do it right, you can create your own segment in the market and be superior to your competitors.
Follow various things that are popular on social media. You can start by looking at trending topics on Twitter, or on Facebook.
To get more detailed information, you can use social listening tools such as Google Trends, Trend Hunter, and many more.
d. Channel your skills
Have expertise in a particular area? You can turn it into a money-making machine from the Internet. For example, you can sell graphic design services, writers, photographers, and so on. You can also benefit from passive income by selling online courses through Udemy or Skillshare.
A cool example of this idea is Aesphi, created by Del Mauricio. This shop offers various types of digital services, from logo design to video editing.
Step 2: Find a manufacturer for your product
If you sell physical goods, you have to find a way to keep production of the goods you sell running. Here are some of the most common methods you can try:
a. Use outsourcing methods with manufacturers
Unlike MSMEs, manufacturers are able to mass produce goods. It will be much more efficient and cost effective if you source your goods from large manufacturers.
If you want to use a B2B system, it is best to use an outsourcing method with a manufacturer. Apart from saving costs, manufacturers can also help you meet consumer demand.
You just need to find a manufacturer that suits your needs and submit a product proposal. For example, there is Indie Source as a clothing manufacturer, and Ever Shiny as a jewelry manufacturer.
Unfortunately, manufacturers have minimum order limits for their products. So, you have to prepare quite a large amount of capital to start a business.
Production time can also be longer because manufacturers have to carry out several processes, such as making prototypes, samples, making improvements, and even production.
b. Become a reseller from a wholesale supplier
With this method, you buy products in large quantities from suppliers and then resell them at a higher price. Fortunately, wholesale suppliers usually provide special discounts for resellers.
If you want to sell a variety of products from various brands, this method will be very suitable for you. As long as you know a good supplier, you are ready to start your business journey.
If you want to become a reseller, try looking for suppliers from directories such as Sourcify, AliExpress, and Oberlo. But remember, your profit margin will not be as high as if you produced your own goods.
Apart from that, you have to really pay attention to product details. Even though several suppliers at first glance provide the same goods, there is definitely something different.
c. Use a dropship system
If you don't have space to stock the goods you sell, you can try the dropship method and try out how to become a dropshipper.
With this method, you basically act as an intermediary to distribute goods from suppliers to consumers. This option is perfect if you want to focus more on marketing.
There are lots of directories you can use to find suppliers. Some of the most popular are AliDropship, Salehoo, and Alibaba. However, just like being a reseller, you cannot control the quality of the goods. So, be careful when choosing a partner for the dropship method.
Step 3: Start building your business
This step will involve various features of your company, such as branding, USP (unique selling proposition), and business structure.
a. Create a brand name
A brand name is one of a company's most valuable assets. This name represents your image in one or two words. In addition, the brand name gives consumers an idea of your brand personality, allowing them to know what your business offers.
To make a lasting impression with your brand name, try using beautiful rhymes and emphasizing the first syllable. Choose a simple brand name, and look for the meaning in another language to avoid misunderstandings.
Lastly, don't forget to check the legality of the name you choose. Make sure the name has not been patented by another business.
b. Determine the business structure
The business structure plays a role in handling the legal aspects of your business, such as taxation and asset protection in the event of bankruptcy or lawsuit.
There are several business structures you can choose from. One of the most common options for online stores is LLC (Limited Liability Company) or PT (Limited Liability Company), sole proprietorship, and partnership.
LLC is a more formal business structure, providing adequate protection because legally, the company is separate from its owners. A sole proprietorship is a more informal structure, providing no protection because the business is owned by the individual so tax matters are the responsibility of the owner.
Similar to a sole proprietorship, a partnership is also an informal structure, but the owner is not just one person and does not have a formal organization. In this structure, all parties are responsible for every action they take for the business.
If you have a small business with low risks and low profits, a sole proprietorship or partnership would be a good option. However, if you have a large enough customer base and want to take advantage of the various tax options available, protect your company under an LLC/PT structure.
c. Buy a domain name
A domain name acts as your address on the Internet. Visitors use this address to visit your store. Like brand names, domain names must be easy to remember and pronounce.
Some examples of domain names that are clear and easy to pronounce are digitalbeauty.com, sethgodin.com, and businessinsider.com.
To choose a domain name that is easy to remember, you should use .com because this domain extension is the most popular. Also, don't use numbers, hyphens, or double letters.
d. Find your unique selling proposition
USP (Unique Selling Proposition) will differentiate you from competitors. More importantly, this factor shows how your business will benefit consumers. USP will be reflected in your branding and marketing strategy.
For example, Rihanna's Fenty Beauty promises customers that they will be a brand that is suitable for women from all walks of life. This USP is found in their slogan, “Beauty for All.”
To establish a USP, find out all the advantages and benefits of your business. Don't choose something that is too general, and find out what factors can target markets that other businesses don't pay enough attention to.
Conclusion
Now, you have got all the answers about what is E-Commerce and how to start an online store. After knowing the ins and outs, all you have to do is determine which segment you will start selling in, look for suppliers, then start a business on the internet.
By reading this article, hopefully you can start your online business journey smoothly and successfully on the Internet, and maintain business success for an indefinite period of time.
To support your business, make sure you choose a platform that provides all the important features so that your online store is successful, not just at the start. What are you waiting for? Start right now..!!
Those are the various benefits of e-commerce for business that you need to know. Have you used an e-commerce website to support sales?