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What Does Ecommerce Really Mean? A Guide For Beginners

4 years ago

It’s one of the most profitable industries on the planet, with global sales coming to trillions of dollars each year. But while ecommerce is a cash cow bursting with milk, what does it really mean? And, most importantly, what does it mean for you.

Below I’ve broken down this online marvel into its base elements. Once you’ve finished this article you’ll understand how and why it’s an industry you might find yourself unable to avoid.

Simply, it’s online selling

Ecommerce is the act of buying or selling a service or product online. It can be through a subscription or a one-off purchase, and if you’ve bought something through Amazon, or have a Spotify account, then you’re already a participant in the ecommerce game.

This leaves an incredibly broad range of things that are covered under the banner of ecommerce and, as you would expect, there are a number of ways of operating which can mean that you are a ecommerce business.

Marketplace selling

There are almost as many registered Amazon accounts as there are people living in the USA. But the US company is not just a platform where you can buy goods, it’s also an ecommerce marketplace that allows you to sell products yourself.

Marketplace selling means that you list your products on the software of an external company. You provide the product and inventory information and the marketplace processes the transactions, taking a percentage of each sale for allowing you to rent a window on their software.

In addition to Amazon there are a number of other big-hitters in marketplace selling, including:

  • Etsy
  • eBay
  • Zibbet
  • Selz
  • Facebook Marketplace

Selling via an ecommerce marketplace can mean the start of a long and profitable ecommerce business for you; Sophia Amoruso started Nasty Gal Vintage as an eBay store and it became one of the fastest growing companies in the world.

The benefit of using marketplace selling is that it’s a low-cost and simple way of accessing potentially enormous customer base. The drawback is that for each sale you make you will pay a commission to the marketplace hosting your business.

Check out the excellent video below for more information on the different options for marketplace selling…

Selling your own products through your own store

The image most people have of ecommerce is of selling your own products through an online store that you have built yourself. It’s the classic model and one which has seen millions of people across the globe make ecommerce work for them.

It’s certainly the model which gives you the most control. However, with control comes responsibility and prime among your responsibilities is the need to create your online store.

There are two principal ways for you to set up your ecommerce store:

  • Open-source CMS: In this model you access the code and software to build a website for free. You then need to cover the cost of hosting your website
  • Closed-source CMS: This method is based upon you renting the software and coding of an ecommerce store builder. You do not then need to cover the cost of hosting your website, as this is included as part of the package from your provider

The benefit of selling your own products through your own store is that you get to keep a bigger slice of the profits from your ecommerce business. The downside is that you then have to cover the cost of failure, meaning that you are buying into a higher risk strategy.

To help you decide whether you should use an open or closed source CMS to get your ecommerce up and running, do some further reading and then consider which option will work best for you.


Dropshipping is an ecommerce model where you don’t stock the products you sell through your website. Instead you purchase your products from a third-party company who ship them directly to your customer(s).

There are a huge number of providers available for your dropshipping business, with some of the most well-known being:

  • Oberlo
  • Doba
  • Alibaba
  • WholeSale Central
  • Dropship Direct

The crucial thing is that you select the right dropshipping company to partner with. This is because while you won’t be responsible for developing and sending products out to your customers, you will be held responsible for the quality of goods and service that your customers experience when buying from your business.

This means that the benefit of dropshipping is that you have lower overheads to get into ecommerce, while the drawback is that you sacrifice control over the products sold by your business.

If dropshipping sounds like your dream entry into ecommerce then set aside 10 minutes of your time to watch this brilliant tips and tricks guide….

Ecommerce is one of the largest industries in the world and it offers you the opportunity to make some money in your spare time, or become your own boss full time.

While there is plenty more to it than just marketplace selling, selling your own products through your own online store, and dropshipping, knowing the different ways that you can get into the world of online selling is the first step that you need to take in understanding what ecommerce means for you.

So, now that you know what ecommerce means, decide which model works best for you and get selling!

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