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What is E-commerce?

Are you interested in running an online business or giving your brick and mortar business an online sales presence? If so, you’re about to enter the world of e-commerce. Let’s take an introductory look at e-commerce and what it is so you can better decide if it’s the right move for your company.

E-commerce Defined

E-commerce is the act of buying and selling goods or services over an electronic system. In many cases this means the World Wide Web, or Internet, but it can also be on smaller computer networks.

In many people’s minds, when they think about e-commerce they think of the sales end of the business, but behind the scenes there are a lot of parts that make it up.  There is the shopping cart, electronic payment collection, inventory management, and online marketing.

As a historical note, e-commerce was first invented in 1979 by Michael Aldrich.  It wasn’t called e-commerce until the 90s, but it was still the buying and selling of goods over an electronic network.

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Shopping Carts

Shopping Carts are used to collect orders from customers, generally through a website’s front end, although other possibilities are through mobile devices like smartphones, or social networks like Facebook.  Simple e-commerce businesses will use these to manage their orders.

Shopping Carts typically integrate with another aspect of e-commerce — collecting the payment. That is taken care of by a payment gateway which has had the credit card numbers electronically passed to it securely.

Marketing and Market Research

Another aspect of e-commerce is marketing and market research.  They are the use of electronic devices to gather data about one’s customers and to present your product to those customers.

One way to do this is to use surveys online or through email.  There are also companies that assist with email marketing campaigns, some of whose analysis of a business’ order and client data is very deep to more effectively target customers who are more likely to buy a product.

You can see that e-commerce is simple, yet complex in all that it entails.  How has e-commerce changed the way you shop or do business? What elements of e-commerce are most important to your business? Tell us in the comments.

This article was originally featured on January 9, 2013.

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