CS-CART, Shopify, WordPress, Magento, OpenCart and there are many more in the market of Marketplaces and Ecommerce
First Thing First. What is Ecommerce
Ecommerce is a software of a website that is having a Shopping cart installed in it. Or in Laymen Language, it is a website that enables the user to Buy a Product using Payment Gateway. But moreover, it must be a multi-brand for making it called an eCommerce, else it is just a business website with payment gateway enabled on it!
Whereas marketplace is a website with same features as eCommerce but has Dropshipment (where the website doesn’t hold any inventory but the order is shipped directly to the buyer from the supplier after the order is received) and multi-vendor
support is called a Marketplace
Let’s Describe some Terms and Software used in E-commerce and what are Shopify, Magento and WordPress Platforms are so, we can understand the difference between them!
Shopping Cart – as the word says, it is same like any other shopping cart we use offline in stores, we just add the product in that, and on final checkout, we can check the items again and complete the transaction by paying the supplier/marketplace by payment gateway!
Payment Gateway! – it is the client that helps to make the transaction in between the website admin and the user. Like Paypal, Payu, etc
*BONUS FACT:- Best benefit of a marketplace, that you don’t need to invest in the Product, but have to work a lot on Marketing strategies as well as Suppliers of Products!
Now let’s understand the Funda in between Traditional commerce, eCommerce, types of commerce, etc.
E-Commerce consists of two words, electronic and commerce. Where commerce means any dealing where buying or selling is indulged, it can be the barter system that was used long back before the currencies were introduced or the retail market where you can go check the product and pay for it!
And Electronic means where the transaction is being done via Electric mode without seeing the product physically.
There are Types and kinds of eCommerce!
- B2C i.e Business to Customer – Now when a retailer is selling a product online via an online store to a consumer in Retail.
- B2B i.e Business to Business – When a Manufacturer or Business entity sells a good or service to another Business is B2B (For instance when a retailer is buying from a manufacturer (maybe a MOQ is applied) or service from provider to the business)
- C2C i.e Consumer to consumer – Nowadays many websites offer you to sell your old goods to others, like eBay, OLX (in INDIA), etc. these are the types of C2C
- C2B – i.e Consumer to Business, in this the individual is selling the product or its service to the Business Best example are the job Portals like Monster.com, etc.
Now, these were the types of eCommerce in this there are various types of business models.
Like – Retail, Wholesale, Service, Marketplace, Subscription-based, etc let us discuss that in details
- Online Subscription – These are for digital services, like videos, etc. Netflix will be a perfect example of this. Where the seller (Netflix) will provide you access to its content on a monthly / Yearly subscription basis!
- Marketplace – like Amazon, Flipkart, etc where the main purpose of the business is to the promotion, marketing, and building audience, and the product part is taken care of the vendors/sellers, etc. this may have tow different categories under this
a. Retails which will be B2C
b. Wholesale – i.e B2B
- Dropshipping – It is very similar to the Marketplace, Dropshipping is a method/Model where the Publisher does not take care of stock or buys the item before displaying it on the website, but they just create the Product page and when/If the order comes the product is directly shipped from the supplier to the buyer Directly.
- Services – When you are providing some services. The main examples are Urbanclap, Astrologers, etc.
- Digital Product – Oftenly called as a downloadable or virtual product, where the buyer can download a file or software after doing the transaction
These things cover kind of all basic for the eCommerce and its understanding.
Various parts we will be covering in future blogs like its marketing, how it is different from Traditional Commerce, how its marketing is different from a business website and many more!
Let’s cover the last topic of Pro’s and Con’s of E-Commerce
Now this theory has two viewpoints Firstly From the perspective of the Buyer (Consumer) and Secondly by Seller (Business)
First, we will see the Pro’s by Buyers View
- He/she doesn’t need to go to the physical store to buy the Products, rather they are ordered online and being delivered to the doorstep of the buyer.
- Returnable by choice: nowadays mostly all the Marketplace and eCommerce websites are giving the Free Returns with no question asked policy
- Reviews – the buyer can see the other buyer’s reviews and consider the product if its worth buying or not
- One can buy Globally, it is not bound geographically.
- Its 24X7 Working, no matter what time it is you can go to the website and buy the stuff.
- Best Prices because of Competition
- It can help connect the manufacturer and the consumer directly without any intermediates.
- If in case you do not want to pay the amount before receiving the Product, one can opt for the Cash / Card on delivery method which is being used by mostly all eCommerce websites.
Now we will see the Pro’s by Sellers View
- Its a global reach, one seller or retailer can target the audience worldwide based on the product and capacity.
- It is working 24X7, you can earn while you sleep
- Brand Awareness – It is easier to build a Brand / Private Label in Ecommerce as compared to the Traditional Commerce
- Vast Product Range!
- Fulfillment Convenience
Con’s as per the Buyer’s Perspective
- Money Security: In Case of the Prepaid order, if its a new Ecommerce it is not sure to get the material in case of Prepaid order, so Prefer the Cash on Delivery modes (If available)
- Data Security is also an issue nowadays, as many breaches of Credit card theft and identity theft we witnessed in recent times.
- Some buyers think its kind of impersonal like there is no human interaction in between, which is a must for various Brands and Products. It’s kind of an essential and a big Drawback of Ecommerce. That is the only reason now some marketplaces are giving Try on Delivery option.
- Product Quality: All the brands and products published on the websites may not be up to the mark for the buyer.
- Late delivery due to shipping Provider or the late dispatch.
Con’s as per the Seller’s Perspective
- High Investment / Startup cost – For server, Design Cost, developing cost, Maintenance Cost and many more which we can discuss in detail in Website Developing articles.
- High Risk of Failure – There is a high chance of failure in case a good and efficient marketing strategy is not used. Marketing is an essential part of Ecommerce Success.
- High Risk of Returns – Due to the customer’s Return or the logistics failed to deliver the product to a specified location, Loss is only yours.
- Customer Reviews in case of Unsatisfactory or cheap products. Even if the product is good, but some customer did not like it they can review the product and it can result in loss of sales and Brand Value
- Website Maintenance / Crash:
- Some Products don’t have an online Audience. For Example Eatable like icecream with very less expiration (unless you have a Hyperlocal (like swiggy or zomato) Marketplace or the Gold or diamond jewelry.
- Competition: Being the online presence all the products are visible even of your competitors, which lead to very competitive prices
- High Labour Cost as in these cases you need a skilled and efficient workforce to complete and process the things under a specific timeline.
This in regard covers most of the detailed discussion. Please feel free to comment on any query or any point if I have missed it.