SEO Glossary: E-Commerce

 

Definition: What does e-commerce mean?

 

E-commerce is short for "electronic commerce". Literally translated into German, this means "electronic commerce". This refers to all commercial transactions on the Internet. It therefore includes the purchase and sale of goods and services.

 

The term e-commerce is generally used when referring to this type of trade. However, processes such as online banking and customer service are also part of e-commerce.

 

It therefore covers all important topics relating to online shopping. A wide range of digital tools and programs are often used to automate processes and make them more efficient.

 

What are the goals of e-commerce?

 

E-commerce has one main goal:

 

optimize sales processes in order to continuously increase sales with as little effort as possible.

 

An online retailer does not rely on just one distribution or sales channel. A multi-channel approach is best, so that various sales platforms are served. Which channels are suitable always depends on the industry and the individual goals.

 

Although e-commerce processes do not have to be digital, there are many advantages. Thanks to the wide range of marketing options available today, several channels can be used simultaneously to generate sales. Search engine optimization(SEO) is just one example of this. This allows online retail to be geared towards different target groups.

 

 

What types of e-commerce are there?

 

There are different types of e-commerce. A distinction is made between four - or strictly speaking only three - categories:

 

• B2B trade: B2B describes business transactions between two companies. B2B stands for business to business. This includes all online stores that offer products and services for other companies or self-employed persons.
• B2C commerce: B2C stands for Business to Customer and refers to business with private individuals.
• C2C commerce: This form of online commerce describes trade between private customers. In customer-to-customer commerce, the legal basis is always negotiated individually and is not subject to such strict guidelines as conventional e-commerce.
• D2C commerce: In direct-to-customer commerce - also known as D2C - the manufacturer sells directly to the end consumer without an intermediary.

 

Which type of e-commerce you choose depends entirely on your strategy, your products and your goals.

 

Legal provisions in e-commerce

 

As in bricks-and-mortar retail, there are certain rules and legal requirements in e-commerce that retailers should adhere to. In order for your digital business to be truly successful, you should attach great importance to the legal security of your efforts. You should keep the following in mind:

 

1. imprint obligation

 

Every online store must have a correct and legally valid legal notice. It must contain all mandatory information required for your legal form.

 

2. right of withdrawal

 

According to § 355 BGB, consumers have a withdrawal period of 14 days. Online retailers must therefore place a withdrawal policy in their store.

 

3. data protection

 

A complete privacy policy is a must. You must also ensure that your online store complies with the provisions of the GDPR.

 

4. prices and shipping costs

 

Maximum transparency is the be-all and end-all. In e-commerce, you must state complete and correct prices, including VAT and shipping costs.

 

5. order button

 

The button used to complete a purchase must be labeled accordingly. Most online retailers use the unambiguous "Order now for a fee".

 

 

What advantages does e-commerce offer?

 

With e-commerce, both companies and customers enjoy decisive advantages:

 

• Direct purchasing process without delays: Interested parties and potential customers browse product catalogs from home or on the go, pay online right away and receive their delivery promptly.
• Einfache Pflege der Kundenbeziehungen: Mithilfe von Social Media und weiteren Hilfsmitteln lassen sich Kundenbeziehungen mit wenig (finanziellem) Aufwand aufbauen und pflegen.
• Location-independent sales: e-commerce businesses can trade nationwide and even internationally. The only requirement is logistics designed for this.
• Positive shopping experience: Shopping online is quick and easy. The online store already provides comprehensive sales advice with the help of product descriptions, detailed images and/or videos. This saves resources and provides customers with an extremely satisfying shopping experience.
• High information density: E-commerce enables companies, service providers and suppliers to exchange more information with customers. Customers receive all the necessary information in advance that is important for a purchase decision. This also includes possible testimonials and reviews from other customers.
• Flexibility: customers can store wherever they are and at any time
• Reduced costs for retailers: costs such as store rent or fuel costs for the sales force are eliminated
• Excellent tracking: With e-commerce, you can quickly find out whether a marketing measure is worthwhile or not. In stationary retail, advertising measures are less easy to measure.
• Competitive advantage: If you want to be competitive today, you should be represented on the Internet. The fact is that more and more users like to shop on the World Wide Web. E-commerce offers excellent opportunities for this.

 

Are there disadvantages with e-commerce?

 

The advantages of e-commerce are manifold. But are there any disadvantages that can make trading on the World Wide Web more difficult? There are actually a number of factors that you should consider before setting up your own online store or otherwise offering your products and services on the internet.

 

Basically, it takes time and money to build up a digital infrastructure. You should be marketing continuously so that costs are incurred on an ongoing basis. This also requires some know-how. Either you know your way around online marketing yourself or you hire a professional who knows all the customer acquisition measures inside out.

 

Another factor is the issue of data protection. Here, too, you should first find out how you can implement the standards that apply in Germany so that you are always on the safe side legally.

 

Own store vs. marketplace: what e-commerce models are there?

At first glance, it would appear that e-commerce is basically on a par with the traditional sale of products in online stores. However, there are also other options and models. Basically, you have a choice of two options if you want to do e-commerce:

 

• Your own store
• Marketplace

 

E-commerce with own online store

 

When you invest in your own store, you enjoy a major advantage: you have maximum freedom and a high degree of flexibility. After all, you don't have to follow someone else. You also don't have to pay fees to third parties.

 

However, you should bear in mind that this involves a certain amount of financial and time expenditure. After all, the store must first be set up, installed and continuously operated.

 

If you like being your own boss and have the necessary know-how or the financial means to set up an online store, your own store is the ideal choice.

 

E-commerce via a marketplace

 

In addition to online stores, companies and retailers have the opportunity to offer their products and services via well-known marketplaces. So-called marketplaces are, for example, well-known platforms such as Amazon or eBay.

 

While retailers only have to enter their products, marketplace providers take care of the rest of the sales process. This allows retailers to offer their products not only regionally, but also throughout Germany and worldwide.

 

The advantage: These marketplaces already have an immense market share, which makes it easier for your products to be found. However, Amazon and co. also want to earn money, of course. Fees are therefore incurred. However, you save the costs of creating a store at this point.

 

Furthermore, depending on the provider, there are certain conditions that you must adhere to. Not every decision you make can be implemented one-to-one as you imagine.

 

So if you are faced with the decision of whether you would rather run your own online store or a marketplace for e-commerce, you should carefully weigh up all the pros and cons. It remains an individual decision that depends on your personal requirements.