Over the last century the world has made huge technological advancements such as the invention of mobile phones, computers, and the internet. This has led to a dramatic change in the way that we communicate and do business with others. In today’s society, most people expect that everyone around them possesses the most up to date technology, and that has put pressure on businesses to keep up, or risk losing out. This has been amplified by the spread of Covid-19 as the lockdown has forced many businesses to work remotely and rely on the internet and e-commerce to stay afloat. Currently online sales are expected to increase by 385% this decade.
Have you been feeling left behind in the move online? Maybe you are being outperformed by your neighbour and need to get back on top? Or perhaps you are just unsure how to conduct business online or if it is right for you? If so, then look no further as in this article we will cover all of this and more by answering the following questions:
What is E-commerce?
Why Ecommerce is right for your business?
What do you need to succeed?
1. What is E-commerce?
E-commerce stands for electronic commerce and is the process of buying or selling goods and services online. Because of this is it can also be referred to as internet commerce and increasingly mobile commerce due to the number of individuals who conduct business on their mobile phones. There are currently four main e-commerce business models:
Business to Consumer (B2C)
These are transactions between your business and the end consumer. This means that the person purchasing your product or service will be the one ultimately using it. This is the most common e-commerce business model used by businesses.
Business to Business (B2B)
These are transactions between your business and another business. This business is not the end consumer, but an intermediary who will sell your product on to either another business or the end consumer.
Consumer to Business (C2B)
These are transactions where your business is purchasing goods or services from a consumer and not another business. The consumer creates a product or service that a business can then use to either gain a competitive advantage or to complete a process. It also encompasses consumers demanding a service for a price and influencing the performance of a business through customer reviews or ideas for product development. Whilst not a business model most would think of, it is growing in popularity. Google AdSense, monetization strategies and affiliate marketing are included within this business strategy.
Consumer to Consumer (C2C)
These are transactions between consumers, there are no businesses involved, and often involve commission being paid to the site in exchange for the use of their service. This business model is inherently unsustainable, with the vast majority of sites being shut down within the first couple of years.
There are other models out there, however they are largely used by governments or public administrations and therefore fall outside the scope of this article.
2. Why Ecommerce is right for your business?
There are a number of reasons why e-commerce is right for your business ranging from cost to customer satisfaction.
Cost
The cost of creating and maintaining a website is significantly cheaper than buying or leasing a commercial property and is not subject to charges from mortgage lenders. This leaves your business with fewer overheads and a higher profit margin.
Practicality
The scope and reach of the internet is far beyond that of a single individual. Advertisements and customer reviews on Google will attract more business than traditional methods such as word of mouth or flyers.
Flexibility
The internet is available 24 hours 7 days a week. If your business has a virtual presence then you can be trading all day every day, and not just within the confines of Monday to Friday 9-5. More trade means more profit for your business.
Customer Satisfaction
Apart from allowing customers to place orders at all hours, e-commerce also allows customers to shop faster and gives them a greater variety of products to browse. This removes the obvious obstacle of limited availability that physical premises have and means they are more likely to find what they need. This in turn encourages them to return.
3. What do you need to succeed?
This is a question every business faces every day. You may think of the obvious such as market research- is there a market for my product and who is it aimed at? Or financial/economic security- do I have enough money and can I survive a flop in the market? These are all necessary considerations, but e-commerce has some additional requirements of its own.
Website requirements
Do you know that your website needs constant up to date terms and conditions that all visitors must be able to access? That you need consent for all tracking cookies you use? Or that it must meet certain accessibility criteria?
Copyright
Your website is part of your business’ intellectual property. This means that you need an up-to-date copyright on it to prevent your competitors from stealing your ideas.
Consumer protection
The goods or services you sell online must be marketed in a certain way with certain information readily available. This includes warranties and returns policies.
Data protection and privacy
All businesses much comply with the Data Protection Act 2018 which regulates the information your company holds on individuals and how it will be used. This includes the data from customers browsing as well as purchasing goods or services on your site.
There are also requirements to display certain information about your company and the service provider, as well as anti-spam laws and necessary protections around online payments.
How can Pure Business Law help?
We are specialist business Solicitors based in Bedford and operating nationally. We draft terms and conditions and all types of contracts. We are competent to deal with all aspects of e-commerce from start to finish.
If you would like to discuss moving your business online, any issues or disputes concerning e-commerce or anything raised in this article please contact us and speak with one of our solicitors. Pure Business Law is regulated by the Solicitors Regulation Authority and is a licensed member of the Law Society of England & Wales.