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What Is Ecommerce?
- SellToStrangers™
- 6 hours ago
- 4 min read
Ecommerce means buying and selling products or services online.
If you visit a website, choose a product, make a payment and receive your order, you have taken part in ecommerce.
It can be as simple as buying a T-shirt online or as complex as running an international online store with thousands of products.
The basic idea is:
Customer finds your business
↓
Visits your online store
↓
Chooses a product
↓
Pays online
↓
Receives the order
That is ecommerce in its simplest form.
What Does Ecommerce Mean?
The word ecommerce is short for electronic commerce.
It refers to commercial transactions that happen digitally rather than entirely through a physical shop.
Ecommerce can include:
Physical products
Digital products
Online subscriptions
Services
Courses
Software
Dropshipping
Print-on-demand
You do not necessarily need a physical retail store to run an ecommerce business.
Your website becomes the place where customers browse, learn about your products and make a purchase.
How Does Ecommerce Work?
Most ecommerce businesses follow a similar process.
A potential customer first discovers the business through:
Social media
Facebook Ads
TikTok
YouTube
Influencers
Word of mouth
They then visit the store and decide whether they want to buy.
If they do, they complete checkout, payment is processed and the business fulfils the order.
If you want a more detailed breakdown, read How Does Ecommerce Work?.
Different Types of Ecommerce Businesses
There is no single way to run an ecommerce business.
Here are a few common models.
Selling Your Own Products
You create or source products, hold inventory and ship orders to customers.
This gives you more control over your branding, packaging and customer experience.
Dropshipping
With dropshipping, a supplier holds and ships the product for you.
You focus more on building the store and finding customers.
If you're interested in this model, read How to Start Dropshipping in Malaysia.
Print-on-Demand
Products are manufactured only after someone orders them.
This is commonly used for items such as:
T-shirts.
Mugs.
Posters.
Phone cases.
Digital Products
You can also sell products that are delivered entirely online.
Examples include:
Courses.
Templates.
Ebooks.
Guides.
Presets.
Software.
Because there is no physical shipping involved, digital products can have very different cost structures from traditional ecommerce.
What Do You Need to Start Ecommerce?
You don't need hundreds of products or a huge warehouse.
For a basic ecommerce business, you mainly need:
Something to sell
A customer who wants it
An online store
A way to accept payment
A way to fulfil orders
A way to attract customers
That last part is often the most overlooked.
Building a store is only one side of ecommerce.
You still need people to visit it.
Our main Ecommerce for Beginners guide explains the full journey from choosing a product to getting your first customers.
How Do Ecommerce Businesses Make Money?
The basic model is:
Selling Price − Costs = Profit
For example:
Selling price: RM100
Product and shipping: RM40
Advertising: RM30
That leaves approximately:
RM30 before other expenses
Other costs might include:
Payment fees.
Software.
Refunds.
Packaging.
Taxes.
Customer service.
This is why revenue alone does not tell you whether an ecommerce business is successful.
You also need to understand how much it costs to generate each sale.
What Is ROAS in Ecommerce?
If you use paid advertising, one useful metric is ROAS, or Return on Ad Spend.
It tells you how much revenue you generate for every RM1 spent on advertising.
For example:
Spend RM1,000 on ads.
Generate RM4,000 in sales.
Your ROAS is:
4x
You can learn more in What Is ROAS in Facebook Ads? or use our Facebook Ads ROAS Calculator to calculate your own numbers.
Is Ecommerce Good for Beginners?
It can be.
You can start relatively small and improve the business over time.
A beginner ecommerce business might start with:
One product.
One simple website.
One traffic source.
One clear customer.
The mistake is trying to do everything at once.
You do not need:
50 products.
Five social media platforms.
Complicated automations.
A massive advertising budget.
Start simple.
Prove that someone wants what you're selling.
Then improve.
Ecommerce Is Really About Customers
It is easy to think ecommerce is mainly about websites.
It isn't.
Your website is simply the system that helps people buy.
The real business is understanding:
Who your customer is
What they want
Why they should buy from you
How they discover your business
What convinces them to purchase
That is why marketing plays such an important role in ecommerce.
A beautiful store with no visitors will still make zero sales.
Want to Start an Ecommerce Business?
If you're completely new, start with our main guide:
It covers product selection, building your store, understanding your numbers and getting your first customers.
And when you're ready to start bringing people to your store, the SellToStrangers™ Facebook Ads Mastery Coursewill teach you how to use Facebook and Instagram Ads to reach potential customers, build your funnel and track your results.
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