Running an e-commerce business is not just about creating a website and selling products, there are a lot of logistical and technical solutions behind it. In this article we have gathered everything you need to know about e-commerce to start, run and develop your own online shop.
What is e-commerce?
E-commerce is an abbreviation of electronic commerce, i.e. when a transaction takes place via the internet or an application and not in a physical store. For example, the goods sold in an online shop can be physical products, services or information. E-commerce creates opportunities for customers and businesses alike – businesses reach a new customer base and customers gain access to products that might otherwise have been difficult to find.
Most people involved in online commerce use one of the three most common business models – B2B, B2C and C2C.
- Business to Consumer (B2C): Businesses that sell products or services directly to the consumer.
- Business to business (B2B): Companies that sell products or services to businesses and organisations.
- Consumer to Consumer (C2C): Private individuals selling to other private individuals, for example via an advertising forum or an online auction.
Although these business models are clearly distinct, all three can co-exist in an e-commerce business. One does not exclude the other.
B2B e-commerce - a market on the rise
So when you start your business, your customers don’t have to be private individuals, they can be businesses as well. When you sell your goods and services to other businesses online, it’s called B2B e-commerce, business-to-business e-commerce.
Thanks to the growth of e-commerce in the B2C market, the demand for B2B companies to offer e-commerce facilities has increased. This means that e-commerce in the B2B market is also on the rise.
What distinguishes B2B e-commerce from B2C e-commerce?
There are many differences and similarities between the different markets, especially in e-commerce. The most striking difference, of course, is that companies cater to different types of customers – businesses (B2B) and individuals (B2C). These customers in turn behave in different ways. The main differences are to be found, among other things, in what drives the need to buy a product and how purchasing decisions are made.
Individuals are often driven by their emotions, are price sensitive and make subjective decisions without involving other parties. In B2B, there are often several people involved in decision-making, which makes the sales process more complex and less emotional. B2B sales therefore involve several different contact points between sellers and buyers.
However, the desire to shop online is becoming as strong in B2B as in B2C. Today’s business customers are at least as digitally savvy as consumers in the B2C market. The change in behaviour is largely due to B2B customers bringing their personal e-commerce experiences into their professional roles. In addition, an increasing number of business customers are individuals who have grown up with the internet and therefore have different expectations of B2B companies’ online accessibility.
Starting your own e-commerce - from idea to finished webshop
If you are an entrepreneur looking to digitise your business or realise your dream of having your own webshop, there are many things to consider. In addition to having an idea that you believe in and feel is feasible, you will need to:
- Find suppliers
- Getting to know your customers
- Create a budget
- Choosing a suitable domain name
- Find an e-commerce platform
- Plan the operation of the online store
So you have to expect to spend some time on the technical side of e-commerce. It can be compared to building a physical store with the difference that the store’s appearance, cash register and customer communication are based on technological solutions. All these elements are of paramount importance to the success of your business. Your website needs to be designed in a way that makes it pleasant for the customer to visit and easy to shop – whether the customer wants to pay by card, split the payment or receive an invoice.
Here we have created a complete guide for those who want to start an e-commerce business.
Supplier partnerships - finding the right suppliers for your online store
Good partnerships are the key to successful e-commerce, and finding the right one can require proper research – not least when it comes tosuppliers. To find the right one, you need to look at any competitors and think about what you can do to make your brand stand out from the crowd. One tip is to visit various events and fairs that may be related to your business in one way or another. As well as gaining a better understanding of the market, you can also find valuable contacts who can help you achieve your goals.
Warehouse management - take care of your e-commerce inventory
The online store’s inventory is e-commerce’s biggest asset. This means that as an e-retailer, you need to ensure that warehouse management and the logistics around it are running smoothly.
To run an efficient warehousing operation, there are several things to keep in mind – from costs to metrics that help you measure efficiency and keep track of operations. Here are some examples of ratios you need to keep track of:
- Storage costs (storage space, storage furniture, means of transport, personnel, operating and capital costs)
- Average storage period
- Turnover rate
- Stock intensity
As there is a lot to keep track of, many e-retailers choose to outsource the warehouse to other companies, for example to us at PostNord. We offer warehousing through our third-party logistics service, which includes:
- Import and customs management
Smart e-commerce solutions streamline e-commerce operations
To run a successful e-commerce business efficiently, you need to find smart solutions that make your work easier. This can range from automated order links to e-commerce platforms with the right payment solutions. In fact, with the right e-commerce platform and integrations, you don’t need to create your own checkout function or order delivery yourself – it’s done automatically.
Skicka Direkt Business - easy freight ordering via PostNord
Skicka Direkt Business is a free service suitable for all types of business, including start-ups. In addition to connecting our shipping solutions to your webshop via plugins and integrations so that your customer can decide on the delivery, you can make sure that the shipping information is automatically sent to us the moment the customer clicks buy.
Portal Business - manage all your deliveries in one place
Our portal for entrepreneurs gives you a good overview of all deliveries, and lets you know if things are not running smoothly. This allows you to act quickly and counteract problems so that your customer does not suffer. The portal also makes it easy to manage complaints, view statistics about your business and create personalised alerts that are sent out automatically.
Payment solutions - let the customer choose
As you start planning which e-commerce solutions you want to use, you need to think about which payment solutions you want to offer. How do your customers want to pay? Which solutions suit your market?
If you want your customers to complete their purchases, it’s a good idea to offer a variety of payment methods. In fact, 11% cancel their purchases because their preferred payment method was not available (Nets). Although it can be profitable to offer several different payment methods, this does not mean that you should choose different providers for each payment method. Your life as an e-merchant will be easier if you choose a provider that provides your online store with all payment methods.
Here you can read more about how to choose the right payment solution for your e-commerce.
Delivery - a big part of the customer experience
Something to consider when running an e-commerce business is that the delivery of the product is a big part of the customer experience. Slow delivery is one such thing that may result in the customer turning to a competitor in the future, even though the customer is satisfied with the product.
Most customers also want to be able to influence the delivery themselves. For some, it’s better to have the goods delivered to a retailer, while others prefer them delivered directly to their door. Giving customers more choices at the point of payment is therefore an easy way to meet their needs without adding to your workload.
You can also improve your customers’ shopping experience by telling them about our app. In the PostNord app your customers can find the information they need about their parcels. For example, they can track their parcels, receive digital receipts and manage their returns directly on their mobile.
You can read more about PostNord’s delivery options here.
Societal changes that have affected e-commerce
The history of e-commerce - from 1992 to today
The foundations of the internet commerce we are used to today were laid with the launch of the World Wide Web in 1992, which allowed individuals to communicate with each other online. Soon, more and more people will want to try selling goods online. A well-known example is the e-commerce giant Amazon, founded in 1994. However, it would take a few years for e-commerce to become as widespread as it is today. Although Internet subscriptions were the Christmas present of the year in 1996, personal computers were relatively new to the market and not yet present in all households.
The 00s saw the launch of smartphones, social media, blogs and Spotify – the internet quickly became a natural part of our lives. At the same time, more companies would digitise their services, or start fully internet-based operations. Since then, e-commerce has grown, not least during the corona pandemic when all the world’s inhabitants were instructed to stay at home. In the first quarter of 2021, e-commerce in Sweden had grown by 51% year-on-year. Today, one in two people use e-commerce to carry out everyday tasks, and having their business online is often a prerequisite for businesses to succeed.
How Covid-19 has influenced online trading
The impact of the Covid-19 crisis on e-commerce has been enormous, for better or worse. Among other things, it has caused supply and production problems, which in turn have led to shortages of goods both in Sweden and in other parts of the world. At the same time, the pandemic has accelerated digitalisation, and e-commerce has received a major boost as a result of increased home quarantine. If in the past it was a tool to help consumers obtain goods that were not available nearby, during the pandemic it became a necessity. Although the need for home delivery will not be as great with increased vaccination rates, many people have become accustomed to consuming online. E-commerce is unlikely to grow as much in the coming years as it did in 2020, but it is undoubtedly here to stay.