What do people mean by E-commerce?

« Go Back



Let's imagine that we are looking around online for a product, clicking on various websites to see what's on offer. Website A shows me pictures of the various products on offer, and we decide that one of them will more or less meet our requirements. However, if we want to make the purchase, we need to either call or email the business running the site. How much will postage cost? Is the product in stock at the moment? These are questions we don't have answers to until we either speak to someone on the phone, go into the shop or receive an answer to our email.

Website B, on the other hand, shows us a comparable set of products, and when we look at the page we are given an option "add to cart". If we decide to buy the product, the website will let us know if it's in stock, how much postage costs, and if we are happy to proceed, will process a transaction either from a credit card, PayPal or bank transfer, all from the comfort of our home.

Website B is an E-commerce site.

Depending on your business, there may be some very, very good reasons for you to look into setting up an E-commerce site. These include:

  • Impulsiveness/Laziness: If a potential customer has to pick up the phone, send you an email or walk into the shop to make a purchase, you are missing out on the "impulse purchases" customers will make if you reduce the barriers of time and geography between them and your business. People are time-poor, and may re-consider or forget about making a purchase if they have to wait
  • Inventory management: An E-commerce site makes it easier for you to keep track of what you have in stock
  • Postage calculation: An E-commerce site makes it easier for you to work out how much to charge someone based on an inbuilt matrix that calculates how much to charge based on weight, postcode and different options such as registered post or courier services.
  • Order management: Your E-commerce software will generate an order sheet for you showing the items ordered, postal address of the buyer, shipping total and purchase amount. This is great for making your dispatch tasks easier. It will also generate an email receipt to the customer.
  • Lower transaction costs - if an e-commerce site is implemented well, the web can significantly lower both order-taking costs up front and customer service costs after the sale by automating processes.
  • Larger purchases per transaction - Amazon offers a feature that no normal store offers. When you read the description of a book, you also can see "what other people who ordered this book also purchased." That is, you can see the related books that people are actually buying. Because of features like these it is common for people to buy more books that they might buy at a normal bookstore.
  • Integration into the business cycle - A Web site that is well-integrated into the business cycle can offer customers more information than previously available. For example, if Dell tracks each computer through the manufacturing and shipping process, customers can see exactly where their order is at any time. This is what FedEx did when they introduced on-line package tracking - FedEx made far more information available to the customer.
  • People can shop in different ways. Traditional mail order companies introduced the concept of shopping from home in your pyjamas, and e-commerce offers this same luxury. New features that web sites offer include the ability to build an order over several days,configure products and see actual prices,easily build complicated custom orders,compare prices between multiple vendors and search large catalogs easily.
  • Larger catalogs - A company can build a catalog on the web that would never fit in an ordinary mailbox. For example, Amazon sells millions of books. Imagine trying to fit all of the information available in Amazon's database into a paper catalog!
  • Improved customer interactions - With automated tools it is possible to interact with a customer in richer ways at virtually no cost. For example, the customer might get an email when the order is confirmed, when the order is shipped and after the order arrives. A happy customer is more likely to purchase something else from the company.

If you are interested in looking into ways to build a secure, easy to navigate E-commerce website that makes your inventory, dispatch and record-keeping tasks easier, as well as driving more sales, Melbourne IT can help. We offer an in-house design team who specialise in this kind of work. If you are interested in discussing options or would like a quote, please either call or email us and we will look into tailoring a package to suite your business needs.


Was this article helpful?


Please tell us how we can make this article more useful.

Characters Remaining: 255