What is an eCommerce service and how to choose an eCommerce service provider?

If there is a popular trend in retail, it is about buying and selling online. Online trading is rising rapidly compared to physical stores. Thus, the umbrella term people use to describe buying and selling via the internet is known as ecommerce. However, ecommerce competitive strengths center around the experience of customers.

What is an ecommerce service, and how can you choose an ecommerce service provider? This article digs deeper into dissecting ecommerce and shows you critical factors to consider before you choose an ecommerce service provider.

According to the U.S. Census Bureau, online traders are responsible for nearly 9% of the wholesales. In other words, internet traders account for about half a trillion USD of the total trade. In contrast to the rapid increase of online transactions (about 15%-17% annually), the growth in the whole retail sector is about 5% per year. Most importantly, the trend is even more vital. In 2017, about 1.66 billion online traders spent up to 2.3 trillion dollars on shopping. Therefore, the possibility of the sales volume increasing in 2021 compared to 2017 is doubled.

Furthermore, it is no surprise that a few of the world's biggest internet companies are ecommerce companies. Subsequently, several brick-and-mortar stores are getting involved with online retail to benefit from the trend and keep their business safe. This leads us to the question: what is an ecommerce service?

What is an ecommerce service?

Ecommerce, similarly known as electronic commerce, involves all the processes that go into the selling and buying of goods, from the manufacturer to the final consumer via the internet or online. E-commerce draws on innovations such as:¹

• Supply chain management;
• Automated data collection system;
• Mobile commerce;
• Electronic data interchange (EDI);
• Internet marketing;
• Inventory management systems;
• Online transaction processing; and
• Electronic funds transfer.

In other words, e-commerce is the most crucial sector of the industry. Also, it’s equally influenced by the technological development of the semiconductor industry.

Ecommerce typically utilizes the internet for a section of the trading cycle, though it may use technologies like email. Moreover, ecommerce trading includes purchasing services (like digital distributions such as iTunes Store) and goods (like clothes from Alibaba). Similarly, there are three sections of e-commerce:

• Online Auctions
• Online Retailing
• Electronic markets

Consequently, ecommerce is supported by electronic businesses. These online transactions occur either as customer-to-business (C2B), business-to-customer (B2C), business-to-business (B2B), and customer-to-customer (C2C)².

Furthermore, the words e-business and e-commerce are usually used interchangeably. At other times, the word retail is used to refer to the process of online retail shopping.

However, e-commerce businesses may make use of all or some of the following:

• Business-to-Business (B2B) trading;
• Involving in retail for introducing the latest goods and services;
• Direct online trading for retail sales to consumers through mobile apps and websites, and conversational commerce through voice assistants, live chat, and chatbots;
• Internet financial exchanges for trading or currency exchanges;
• Business-to-business electronic data interchange;
• Involving in online marketplaces, which process other consumer-to-consumer (C2C) or business-to-consumer (B2C) trades;
• Marketing to established and possible clients by fax or email;
• Using and collecting demographic data via social media and web contacts.

Lastly, in the previous years, the use of ecommerce marketplaces such as Aliexpress and Alibaba have brought about the considerable development of online retail shopping.

How does an ecommerce service work?

Ecommerce operates via the internet. Customers can access an online store to browse through and place orders for services or products through any of their devices. In this part, there is a brief explanation of how an ecommerce service provider works.

After placing the order, the client's web browser will send messages to and fro with the server hosting the online marketplace. Also, the information relating to the order will be sent to a central computer called the order manager.

This is followed by transferring the information to the databases that handle the inventory levels. These include the bank computer and the merchant system that controls the payment procedure, before redirecting back to the order manager. In short, this ensures that there are enough funds from the customer to process the order and there is enough store inventory to satisfy the demand.

In addition, after the order's validation, the order manager will send a notification to the shop's web server. Subsequently, it generates a message informing the client that their order was successful. Then, the order manager will transfer the order information to the fulfillment department or warehouse for the services or goods to be delivered to the customer. At this stage, access to a service may be given, or digital or physical goods may be shipped to the client.

In conclusion, providers that host ecommerce services may include²:

• Online marketplaces that only require sellers to register for, like Alibaba.com;
• Open-source tools for companies to use in-house development to handle; or
• Software as a service (SaaS) implies that it permits clients to rent online store facilities.

Examples of ecommerce services

By making use of ecommerce services and shopping carts, suppliers or wholesalers create online stores where they display their services and products. Possessing an online shopfront is among the most straightforward strategies of conducting ecommerce. Also, there are numerous ecommerce service providers available. Picking the perfect ecommerce service for your products or services depends on your preferences, company requirements, and financial position. Below, we explained one of the best ecommerce service providers present in the marketplace.

Alibaba.com

Alibaba.com, part of Alibaba Group, is a well-known multinational b2b ecommerce service provider. Jack Ma founded it on April 4, 1999. This b2b platform includes services for both suppliers and buyers, such as online B2B trading, trade assurance, data analytics, digital media and so on.

With Alibaba.com introducing a small platform for exporters and manufacturers for international selling, it has gradually become a leading mobile commerce and e-commerce marketplace globally.

Alibaba.com is often listed as an excellent example of a b2b e-commerce business, as it encountered several challenges before becoming a typical example of a b2b business. 

Currently, Alibaba.com is one of the largest online marketplaces globally. For global buyers, the ecommerce platform is exceptionally efficient for sourcing goods in large amounts and for contacting big suppliers³. For manufactors, wholesalers and traders who wish to export their products to the world, they may reach over 26 million active buyers from more than 200 countries.

Other examples of ecommerce service providers include:

• Magneto
• eBay
• Wayfair
• Shopify
• Etsy
• Rakuten
• Walmart marketplace
• Newegg
• Bigcommerce
• WooCommerce

7 tips for choosing a right ecommerce service provider

Since many of the brick and mortar stores have decided to switch to ecommerce service providers, they need to make some plans for the project. This is the period to choose a service provider. However, how do you pick the right ecommerce service provider for your business?

Of course, starting an online business begins with selecting the right ecommerce service provider. But this is just the beginning, as several factors are taken into consideration when comparing different ecommerce solution providers⁴. Therefore, here are some tips you can follow:

1: Gathering a strategic team

The vital aspect of a business is the ecommerce service team. Thus, ensure you organize a team of people with good knowledge of both the management and workings of your company⁵. These include marketing, ecommerce product entry service, retail store management, ecommerce product manager, customer support, and many more. Moreover, you save time by having the necessary personnel at the beginning of the project. Also, you will eliminate avoidable errors. Likewise, there will be lesser resistance to some changes based on decisions made during the process.

2: Pricing and payment

You need to consider the price and payment method of an ecommerce service provider. Whether you are already an established brick and mortar store moving online or you’re just getting started, you need to be aware of prices. Nearly every provider offers a monthly payment option. The price may differ depending on the platform you want, whether joint-hosted or self-hosted. Also, you need to consider the processing fees of the platform. Most importantly, try to consider the benefits and disadvantages of each platform to determine the right one for your budget.

Likewise, you should consider the method of payment. A few platforms do not provide a third-party form of payment, like PayPal. This could cause some inconvenience to your customers, resulting in the abandonment of the shopping cart.

Don't ignore the forms of charge before choosing an ecommerce service provider.

3: Scalability

The simplest method to comprehend scalability is the desire not to maintain the same status when establishing a company. If you possess ambitious development plans, then ask yourself. Does the service provider possess the experience and skills to help your business’ growth? What feedback do you get from other customers? Are they reputable leaders in the industry?

The company website is the best place to begin your research. Visit the blog/news section, go through the case studies, and review their reports or customer service to assess their strategic partner. And lastly, check the benefits of the partnership.

4: Integration

Another factor to consider when searching for the right ecommerce service provider is their plugins and integrations. Some of the best ecommerce platforms, like Alibaba, have several tools for you to operate your online store. The requirements of your store will determine the perfect type of plugins for you.

Here are a few of the common types of plugins you need to focus on:

• An ecommerce plugging that assists in rewarding your clients for the use of your goods
• Accounting plugins to aid in taxes, profits, sales, and revenues
• Plugins that help in dropshipping
• Email marketing tools for good customer service

5: Ease of use and test store functionality

Talking about ease of use, you want to have the ability to carry out your task without the need to have a deeper understanding of coding and technological terms. In other words, the ecommerce site is expected to be set up perfectly, use over time, and accessible to operate⁶.

Above all, here are a few things you should look out for:

• Stock keeping units (SKU), SKU management, and product

  After setting up the basics, uploading multiple products from comma-separated values and CSV files simultaneously is a much quicker means of adding the latest products to your catalog. At the same time, ensure the ecommerce platform permits this, specifically if you have a developing or colossal catalog.

• Centralized channel management

  The present condition of ecommerce trends on omnichannel strategies. Based on whether you are aware or not, customers are shopping anywhere and everywhere. Be it Alibaba, Instagram, or Facebook. It’s imperative to expose your products to people across different channels.

  After launching and making sales, you will most likely wish to extend to other channels. With several e-commerce businesses, you will need to handle both the platform of the extra channel and that of your ecommerce site. Meanwhile, this might get complicated. You may even get sanctions from specific online marketplaces for accidentally going against the rules.

  Therefore, it is best to search for a centralized channel management site to handle product descriptions and price points. Also, you need to push your products to other channels directly.

• Setup flow

  Does the ecommerce solution provide a simple setup flow, describing what you are required to do before launching? These include setting up taxes, payment processing, loading in goods, domain name registration, and others.

• One-click app marketplace

  You need built-in plugins to assist you in developing your store without the need to hire developers. Use the ecommerce site app to search for essential tools. In short, stay updated and connected in real-time.

6: SEO friendliness

Ecommerce businesses, like every other business, require a well-optimized platform. In other words, it can be of enormous benefit if your online store ranks high in search results. Clients should find you easily when looking for products similar to yours.

7: Customer service

An essential aspect of every business is customer service. Since a brick and mortar store depends on physical location, the customer experience is in employees, especially the customer care hands⁷. However, the case is different with ecommerce.

Remember, server downtimes and software outages are not in your control. A downtime can prevent your customers from assessing your products and services. Thus, it’s critical to use an ecommerce service provider with a responsive customer care team. Take a glance at each service provider's customer service to see:

• If they are available 24/7?
• The number of levels of support offered and the cost of each.
• How to reach them?

Sell on Alibaba.com

Alibaba.com is one of the best ecommerce platforms for both suppliers and retailers looking for ways to distribute their products and services to several people across the globe. This b2b ecommerce platform strives to satisfy the requirements of the sellers and buyers by offering many tools needed for their stores. As a seller on Alibaba.com, you are obtaining more than just a storefront in the world marketplace. You will also benefit from all the factors we covered when you choose Alibaba.com as your ecommerce service provider. Besides, you will get full support for your store development and all related functions to communicate with your customers and get orders.

Start selling on Alibaba.com by registering here.