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What Is An eCommerce Business And How Does It Work?

Puneet Bhalla

Associate Director - Marketing @ Shiprocket

February 7, 2018

5 min read

Did you know the eCommerce market is expected to reach USD 16,215.6 billion by 2027, at a CAGR of 22.9% during the forecast period of 2020 to 2027? India is a hotspot for eCommerce bloom, thus it is a good time to learn about the nitty-gritty of eCommerce and get going with it. Even if you don’t specifically know what eCommerce is, there’s no chance you could have gone without hearing about it. For starters, the world’s going gaga over eCommerce! 

Right from small-scale companies to market giants, everyone is capitalizing on the eCommerce industry, and there’s no going back from here. If it doesn’t make any sense to you, I’m sure this will- Are you interested in selling your products on the Internet and earn a hefty sum of money in return? Well! You’re in the right place. Welcome to the world of eCommerce!

What Is eCommerce?

eCommerce (also known as electronic commerce) is the process of buying and selling products or services, making money transfers, and transferring data over an electronic medium (Internet). This network allows people to do business without the constraint of distance and time.

Types Of eCommerce Businesses

There are various types of eCommerce business options that you can choose from based on your preferences, capital, and online business model. For different businesses, you have to implement various techniques and strategies. Some of the favorite online companies include:

  • B2B businesses
  • B2C businesses
  • Affiliate marketing business
  • Google Adwords marketing
  • Online auction selling
  • Web marketing

How Does eCommerce Businesses Function?

Online business works pretty much on the same principles as an offline/retail store does. On a broader scale, the whole eCommerce process can be broken down into three main components or work processes:

Receiving Orders

This is the first step where customers place the order through the eCommerce platform (website or an online portal), and the seller makes a note of it.

Processing Order Information

The second step where all the details of the order being processed and completed. It is now ready for delivery.


The last step wherein the delivery process is carried out. All the logistics components play a significant role in this step to ensure timely delivery to the customer.

If you get the basics right and conduct your eCommerce business in the right way, you will surely enjoy good profits. Always remember that proper business planning and implementation are the keys to a successful online store.

Create A Website To Start An eCommerce Business

One of the basic things that you need to do while starting an internet or eCommerce business is to create a site. It can be an excellent platform for promoting your goods and services and make them popular with the target audience. To attract customers and buyers through search engines (like Google) your website should be adequately SEO (Search Engine Optimization) optimized.

Ideally, your website should have a list of the products or the services that you wish to promote. The sections should be interactive and user-friendly for the convenience of the website visitors. All the essential and useful details about the business should be adequately mentioned on your online portal. Have a clean and straightforward checkout section, so people don’t drop out at the last moment.

Advantages of eCommerce Business

The main advantage of an eCommerce business is that it allows you to conduct your business flexibly and at the same time is very useful in reaching a full range of target audiences within seconds. Nowadays, internet home business has also become a prevalent means of earning money in the form of eCommerce. You need to have a computer and internet connection, and you can easily carry on with the marketing and business with just a click of the mouse.

Another significant benefit of an eCommerce business is that it helps you to identify the target audience very quickly and reach them easily too. For example, if you are trying to sell some goods or products, you can easily make market research from the internet and identify your niche market.

Accordingly, you can send emails or promotional brochures to prospective customers who will be interested in your product or service. Compared to conventional promotional methods, this is pretty cost-effective as you do not have to approach the customers on an individual basis.

FAQs (Frequently Asked Questions) 

Where can I create my website?

To start your eCommerce business, you can easily create your website on Shopify, Woocommerce, Opencart, etc. 

How to start shipping?

You can signup with courier aggregators like Shiprocket and get a wide pin code coverage to 29000+ pin codes and ship with multiple courier partners. 

Can I have an online and offline business?

Yes. Most businesses follow a hybrid model today. You can have an offline store and sell online also. This way you can sell to more people in different parts of the world. 

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10 thoughts on “What Is An eCommerce Business And How Does It Work?

  1. Hi this is kaviyarasu

    we have an e-commerce application and we are seeing for a delivery partner with excellent functioning

  2. Thanks for this knowledge. It’s explicit. I have a question; What can be the minimum required capital for a starter in e-commerce business

  3. Thank you for providing such information. This is very generous of you providing such vital information which is very informative.

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