Ecommerce

Ecommerce covers more than online shops selling physical products. Booking a hotel, buying a digital course, paying for a software subscription and ordering wholesale stock through a supplier portal are all ecommerce. The common thread is that the transaction happens online.

The main models are business-to-consumer (B2C), business-to-business (B2B, often with account pricing and invoices) and consumer-to-consumer through marketplaces. Selling on your own site and selling on a marketplace are very different businesses: one gives you the customer relationship, the other gives you traffic but keeps the customer.

How it works

An ecommerce site has a catalogue of products with prices, stock levels and variants such as size or colour. The customer adds items to a cart, enters delivery details and pays through a payment gateway, which checks the payment with the card network and the customer's bank. The order is then recorded, stock is reduced and confirmation emails go to the customer and the shop.

Behind the shop sit the operational parts: fulfilment (picking, packing and shipping, or delivering a digital file), returns, tax rules for each country you sell to and customer service. Many shops connect their store to accounting, inventory and shipping software so orders flow through without retyping.

The store itself is built either on a hosted platform, where the provider runs the software for a monthly fee, or on self-hosted software such as WooCommerce on WordPress, where you run and maintain it on your own hosting. Hosted platforms are quicker to start and easier to maintain; self-hosted stores offer more control but need regular updates and security care. Either way, the store needs a privacy policy, clear terms of sale and HTTPS on every page.

Example

A family olive oil producer starts selling online with 12 products. It chooses a hosted platform, connects a card payment provider, sets flat-rate shipping for its own country and writes clear pages on delivery times and returns. Orders arrive by email and are packed twice a week.

After a year the owner checks the store's analytics and sees many visitors adding items to the cart and leaving at the shipping step. The flat rate looked high for single bottles. Offering free delivery above a set order value raises the average order and improves the conversion rate, measured over the following months against the earlier figures.

Why it matters for your business

Ecommerce lets you sell beyond your opening hours and your town, but it is a business in its own right, not a website feature. Product photos, descriptions, delivery, returns, tax and support all take ongoing time, and the store needs traffic, which costs money or effort to build. For some businesses, such as a restaurant or a custom joiner, a simple enquiry or booking form brings in more revenue than a full shop. Before building, estimate how many orders you need each month to cover platform fees, payment fees and your time, and check that demand exists by testing a few products first.

Common mistakes

• Hiding delivery costs until the last step of checkout, which is a common reason customers abandon their carts.
• Using supplier photos and descriptions copied word for word, which gives search engines and customers no reason to choose your store.
• Forcing customers to create an account before they can buy.
• Launching without clear returns, delivery and contact pages, which makes a new store look untrustworthy.

Questions people ask

How much does it cost to start an ecommerce store?

It varies widely. Hosted platforms charge a monthly subscription plus payment fees, and a custom design adds a one-off cost. Self-hosted stores trade lower software fees for hosting and maintenance. Budget also for photography, product content, shipping supplies and marketing, which often cost more than the store itself.

Should I sell on my own website or on a marketplace?

Marketplaces bring ready-made traffic but take commission, control the customer relationship and set the rules. Your own site costs more effort to attract visitors but keeps margin, data and repeat customers. Many small sellers start on a marketplace to test demand and add their own store later.

Do I need a business licence to sell online?

Usually you need the same registrations as any business in your country, plus tax registration once you pass local thresholds, and consumer-protection rules for online sales apply. Requirements differ by country, so check with your local tax office or an accountant. This is general information, not legal advice.