El ABC of e-commerce

Learn what e-commerce is and how you can make the most of it for your business.
El ABC of e-commerce
Image credit: Shutterstock

Grow Your Business, Not Your Inbox

Stay informed and join our daily newsletter now!
This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.
Opinions expressed by Entrepreneur contributors are their own.

To define it in simple terms, we can say that electronic commerce (e-commerce) is the process by which two or more parties carry out a business transaction through a computer and an access network.

The stores of the future

Worldwide, the figures already reflect the enormous potential of doing business through the internet. According to the Live Stats website , on average 40 percent of the world's population has an internet connection. According to a report by the Mexican Internet Association (Amipci), in Mexico, 51.2 million people are frequent Internet users, and the market for online sales of products and services has an estimated value of 121 billion pesos.

But what does all this mean for your business? In a simple way, we could say that having a web page to promote your product or service will turn your business into a virtual store, available and open 365 days a year, 24 hours a day. In addition, it will allow you to build a portfolio of clients that could even be on the other side of the planet.

In the United States, companies such as Amazon.com (the world's largest online bookstore) or Dell Computers have made e-commerce a reality: in 2013, the former reported revenues of more than 74 billion dollars and, according to Forbes, in 2014 the second reported revenues of more than 57 billion dollars.

In Mexico, e-commerce still has a long way to go; Although there are no resounding cases like Amazon.com or Dell Computers, there are more and more companies of all types and sizes that are making use of the Internet to promote their products or services around the world.

Where to start?

"Doing" e-commerce is not as easy as it might sound. It requires carrying out a process that goes from determining the products and services to be promoted online to redefining the sales, distribution, collection, marketing and customer service processes. The following are the steps that you should not lose sight of before entering the world of electronic commerce.

1. Define what type of product you are going to sell

The process of implementing and placing a website to sell products or services online starts from defining the type of product to be sold, since not all products or services are capable of being sold online.

Before founding Amazon.com, Jeff Bezos made a huge list of possible products and opted for books after realizing that they offered a high percentage of profits, had few manufacturing errors, had an established presence in the market, were easy to store and susceptible to all kinds of offers and promotions.

Also, the demographic aspect is essential: if you plan to sell a product or service to people over 60, for example, this may not be the best option, at least now that most online users are in the range of 20 to 40 years of age.

2. Find a specialized provider

In addition to multinational companies such as IBM, Microsoft or Hewlett Packard, there are several firms in Mexico specialized in offering complete solutions to companies interested in doing electronic commerce, including MercadoShops and Kichink . The support they offer ranges from the design of a website to the installation and operation of the software that is required to carry out online transactions.

So that you can generate e-commerce, make sure that the hosting provider (who will put your page on the server) guarantees you secure transactions, so that the confidential information of your clients remains encrypted during and after its transmission.

A provider of this type will also be responsible for registering your domain name -for example: www.su-company.com.mx- and will assist you throughout the implementation stage of your virtual store.

3. Take care of the design

Although it is not essential, the design of your website is important. This must be distinguished from the millions of existing pages, but above all, it must contain attractive spaces for offers or updates that can be updated and define the way in which your site can be navigated.

We also recommend having good headings on your main pages, offering links to other sites of interest and always having a space for your customers' suggestions.

4. Secure your production

Try to use photos or images of the products or services you offer, but make sure they are items with inventory availability. It is better to offer what you already have (even if it is little) and not look bad with an advertised product that you might not have in stock.

5. Plan the logistics

Lean on courier or parcel companies for packaging, tracking and delivery of merchandise. Preferably, it seeks that said company has worldwide coverage and has effective electronic tracking services of its shipments, in case of problems.

6. Establish a collection plan

In Mexico there are currently three ways to ensure the secure payment of an electronic sale: the first is to receive deposits in a checking account prior to closing the sale and, although many virtual stores do so, it is not a useful method if you want to sell abroad. In this case, sending a money order could be the alternative, although online consumers prefer more direct and faster mechanisms.

The other form of payment involves the use of a credit card (an option widely used by electronic commerce majors), but which still presents some problems due to the lack of secure systems and encryption of credit information. This, however, is already changing and some banks and telecommunications companies have already teamed up to offer secure transactions through credit card payment.

7. Don't lose sight of your customers

Having a virtual store does not mean that you should forget about your customers; On the contrary, a good website will help you to have detailed and up-to-date information online about your current and potential customers so that you can offer them service during and after the sale. We recommend that you follow up on all e-mails, messages on social networks or consultation calls generated by your page.

Get consumers to record their names along with other information (hobbies, lifestyle, profession, etc.) and, in return, compensate for it with something meaningful like personalized news, entertainment, promotional items, or memberships.

How to promote your digital business?

Even if you comply with all of the above, the lack of promotion of your virtual store is almost like installing a physical store in an interior department on a fifth floor, of a building without an exterior advertisement: customers would not have a way to find it.

Fortunately, promoting and advertising in the virtual world is much easier and cheaper than many people think. The first thing you should do is register with the main search engines and internet directories, such as Google and Yahoo!

Social networks play a fundamental role in promoting your business. To form a group of followers who are loyal to your brand, you must follow a social media strategy that allows you to interact with them on a day-to-day basis. In this sense, Facebook and other networks such as Twitter, Pinterest and Instagram play a fundamental role.

On the other hand, Google Adwords is a platform that allows you to advertise your business on Google, which significantly increases online sales. This service is only charged when users click on your ad to visit your website.

If what you are looking for is direct advertising and promotion, you can use banners (banners that appear at the top or side of a web page) whose price varies depending on the size or characteristics of the ad. A banner allows a user to click on it to go directly to your business. There are also banner exchange programs, in which you do not have to pay anything, but simply offer the possibility of including other companies on your site.

More from Entrepreneur
Entrepreneur Select: A Fund For Entrepreneurs, By Entrepreneurs

Entrepreneurs require more than just money, which is why we aim to empower you, as well as act as a catalyst for value creation.

Make sure you’re covered if an employee gets injured at work by
  • Providing us with basic information about your business
  • Verifying details about your business with one of our specialists
  • Speaking with an agent who is specifically suited to insure your business
Whether you want to learn something new, be more productive, or make more money, the Entrepreneur Store has something for everyone:
  • Software
  • Gadgets
  • Online Courses
  • Travel Essentials
  • Housewares
  • Fitness & Health Devices
  • And More

Latest on Entrepreneur