What is e-commerce and its types

E-commerce

Under Electronic commerce (Electronic commerce), in short "E-Commerce" or "eCommerce", are all forms of Trading on the internet summarized, although mobile via smartphone or directly via PC and laptop.

We'll take a closer look at what you need to look out for when building your e-commerce business, which ones Opportunities and risks of online trading and how you can use the buying behavior of people via your online shop for yourself and your marketing.

This is what awaits you today

Definition: what is e-commerce?

Online trading can be broken down into the areas of business to business, or B2B for short, and business to consumer, or B2C for short, and it includes all trading activities that take place on the Internet. The term is therefore quite broad, which is no wonder, because after all, e-commerce is not only long established, but also continues to rapidly advance.

What is an online retailer?

You are referred to as an online retailer if you operate an online shop or a platform on the Internet through which you make your services or goods available for ordering. In parlance, the online retailer is often referred to as an internet retailer. But there is also the retailer who operates both a stationary store and an online shop at the same time.

The merchant of e-commerce

E-commerce clerk is still a relatively new apprenticeship. It has only been possible to train in it since August 2018. After a short time, it became clear that the training is very well received and that it is in great demand. There are no specific requirements regarding school-leaving qualifications for admission to training as a businessman / woman. Only good grades in mathematics, German and economics are expected. In addition, a good command of English and analytical thinking skills are an advantage. The dual training lasts 3 years.

E-commerce and e-business

The term e-business is very often used as a synonym for e-commerce. But there is a clear difference between the two terms. As E-business You describe the initiation, agreement and development of processes that are considered to be value-adding and that are handled with the help of information technology.

In contrast, you concentrate in the area E-commerce on electronically running transaction processes. These processes are known as online trading. E-commerce is therefore only part of e-business.

Advantages and disadvantages of e-commerce

The digital change is affecting more and more industries that cannot avoid offering their own products and services in online trading.

Advantages of e-commerce

The advantagesfrom the customer's point of view are obvious. The online shops are available around the clock, prices can be compared transparently and in real time, shipping is usually free of charge and often only lasts for a short time. It usually only takes one to three days from ordering to receiving the goods. If a product does not exist in this country, it is simply ordered internationally. Thanks to online payment methods and shops with Europe-wide or worldwide shipping, none of this is a problem at all.

Out entrepreneurial point of view all those points that were named as advantages for consumers are not necessarily also advantageous, but they at least offer opportunities. Price transparency can be problematic for some companies, but ideal for others. The decisive factor here is your own positioning: do I want to be the cheapest provider, or can I perhaps score with a special service and thus achieve a higher market price?

Disadvantages of e-commerce

Where there is light there is also shade and so there is also in the area of ​​online trading disadvantage. From the company's point of view, the biggest shortcoming is the return rate, i.e. the number of products that are returned. The high postage costs can quickly drive down the margins on orders. If necessary, goods must be thoroughly cleaned and logistical challenges are omnipresent. From the consumer's point of view, on the other hand, there are hardly any disadvantages, at most a few unreliable shop operators who can cost time and nerves and the fact that the shops in the city in which one lives are becoming fewer and fewer.

E-commerce vs. stationary trade

Online retail, i.e. e-commerce, has the advantage over stationary retail that you can save both personnel costs and retail space. But the customer also benefits from e-commerce compared to stationary retail. He does not have to pay attention to fixed shop opening hours and can order whatever he wants at any time and from any location.

B2B e-commerce

As in stationary retail, there are just as significant differences online, which depend on whether the products and services offered are aimed at private individuals or companies.
Shops often become real online worlds of experience for private individuals. The shop area is expanded with videos and blog articles in order to create a certain attitude towards life.

in the B2B area however, the focus is on optimizing the purchasing processes of other companies. Simple platforms on which it is possible to order the required products efficiently enable other companies to operate in a resource-saving manner. Depending on the industry, the prerequisites and requirements are again specifically different.

The business models in the B2B area are diverse. In addition to creating a central, as comprehensive as possible order platform for other companies, flexible solutions are also a viable option. For example, when you think of software companies that simply offer other companies licenses per employee or offer monthly flat rates. But if you don't offer your services online yet, how do you design the perfect online shop? We'll take a closer look at this point next.

Online shop: systems and options

If you want to run an online shop, you have to make a few decisions. First of all, you need to be clear about the approximate size of your online business. Depending on that, you can then decide whether you want to have an independent system developed yourself, which is tailor-made for your company, or whether you want to use existing modular systems.

Basically there are open source shops that you can start with for free. However, these systems are usually quite limited or have other disadvantages, such as annoying advertisements from the shop providers. So if you as a retailer want to build a sustainable online business, you should resort to a more professional solution. Here you can Shop systems either buy it once as a kit or rent it.

With the rental variants, you pay a monthly or annual fee. Individual shop system providers also want to earn money from sales. You have to take these details into account when choosing the right shop system for you.
Simple shop systems that are very popular are, for example, Shopify and Woocommerce. If you want to make it easy for yourself, you can, for example, build your website with WordPress as a CMS system and work with additional shop plugins. For example, you can easily update products directly in the WordPress backend.

The most important shop systems for online trading at a glance

Rental shopPurchase shopsOpen souce shops
1 & 1 e-shopsZeta ProducerMagento
apt webshop systemaconon® shoposCommerce
Catmedia e-businessA one I.T. GmbHWooCommerce
Cyberline GmbHartnology GmbH
ePages Software GmbHCaupo.net
Expeedoe-yendo AG
MicroShopGambio GmbH
plentySystems GmbHIntershop Communications AG
WEBSALE AGXanario

Advantages and disadvantages of the shop variants

Choosing the right system depends a lot on your business and online experience. It is clear that you should set up your shop in such a way that it is permanently easy to maintain and you do not need constant external support.
A shop based on a WordPress website is a practical option here, as you need no or only minimal programming knowledge and can also start very cheaply.

If you have particularly large or special projects in e-commerce, individual programming is a good idea. However, always make sure that the costs do not explode and remember that you can often not easily make changes yourself.

Regardless of which system you choose, the entire shop architecture has to be very well thought out right from the start. The User experience is the focus, so think carefully about which virtual paths your potential customers will take through the shop. Where do you click? Where would you suspect the next button? Make sure that your shop works as intuitively as possible.

Payment systems in e-commerce

You face a major challenge in online business when you turn to payment and related bookkeeping. Users are now used to finding various payment options, be it by credit card, PayPal or on account.
This is very convenient for your customers, but for you there are some difficult details Accounting challenges towards you. These are for example:

  • Taking into account the fees of credit card providers and PayPal
  • Correct booking of returns and credits
  • Individual invoices stating whether the amount has already been paid and, if so, how
  • Refunds for complaints

The first point is obvious: credit card providers and PayPal also earn a small amount of your sales. You have to book these fees as costs. At the same time, many packages are returned - be it the entire order or just a single product. Corresponding credits are to be created here and included in the bookkeeping.
Depending on whether you have established double bookkeeping in your company or are obliged to implement it, the effort can really be considerable. The obvious solution to this challenge is to automate the accounting as much as possible.

E-commerce and accounting

Accounting requirements in e-commerce

Accounting software for e-commerce should be tailored to your shop and your type of company. It is ideal if you can organize your accounting online and you can also activate data for your tax advisor. The software should prevent you from having to send documents by post and create more efficiency for other activities in your day-to-day work.

EÜR or double-entry bookkeeping

Are you wondering what kind of bookkeeping should you do in e-commerce? Either the EÜR or double-entry bookkeeping? Double bookkeeping is recommended here. More and more people are ordering online and that means your shop can grow quickly. The double bookkeeping