E-commerce: Digital as a Sales Channel

What is E-Commerce?

E-commerce broadly refers to any business or commercial transactions that take place through the Internet. You should probably have come across or used a broad range of sites that engage in e-commerce from consumer-based retail sites (e.g. Amazon.com, asos.com) to auction sites (e.g. ebay.com) to music sites (e.g. iTunes.com). These companies have various types of revenue streams, such as online sales, subscriptions, advertisements, or a combination of the above.

Why E-Commerce?

Increasing Accessibility of Purchase

If you own a small or medium enterprise, e-commerce is an unprecedented way for you to gain access to global and regional markets. You can expand your reach and volume sales without first needing to commit the sunk costs typically required to establish a foothold in foreign markets.


Operating costs are significantly leaner when you sell online – there are lesser logistical overheads to care about. Going online also means you are able to find your niche market easier and focus on targeted advertising, which further streamlines your spending.

Learning and Optimizing through Customer Data

For any business, customer data is gold, and e-commerce provides the perfect opportunity for detailed data capture. Precious insights can be gleaned from studying your customers’ online purchase history, browsing behavior, site activity and links clicked. For this reason, businesses that employ e-commerce should run a dynamic operation and make necessary adjustments and improvements as informed by the captured data.

Similar to social media, going into e-commerce requires new resources and efforts to make it a success. Beyond putting up your products on sale on a website, you will need to consider if you are able to handle these areas:

  • Stocks & Warehousing: Allocate sufficient stocks for online sales and decide where you will be housing your stocks.
  • Delivery: Consider how you will fulfill your delivery promise. Will the delivery be carried out by existing staff or by working with a courier partner like SingPost for domestic deliveries, and the likes of UPS, DHL and FedEx for international deliveries?
  • Customer Service: Have the ability to handle online and phone enquiries with little delay 7 days a week.
  • Returns & Exchange: Have a process and policy in place to handle returns and exchanges.

10 Things You Need To Plan For Before Selling Online  

1. What is your marketing strategy?

An important step in starting an e-commerce business is to develop a sound marketing strategy. Decide what sets you apart from competitors. Will you compete based on product differentiation, or price discrimination? Who are your target audience segments? Which brings us to the next point…

2. Who is going to buy from you?

Selecting a target audience can make or break your business. Conduct careful market research before deciding, taking into account demographic and socio-economic factors. You should tailor the design, navigation and communications of your site to suit your target audience so that they will feel connected to your brand.

3. What are your competitors doing?

It is always helpful to look at what other companies in the industry are doing to give you a rough idea of what needs to be done. Consider their product selections, pricing structures, promotional offers, and the design of their sites. Pick up on their weaknesses and strengths to help you with your own design. It is also useful to know how your competitors’ businesses and websites work in order to create a differentiated offering.

4. What do you want your site to do?

Decide on the functionality of your site, and the way the interface and navigation works. Think of your website as a virtual shelf – where should you place the products you are really trying to push? Where should you place promotional banners driving purchases? A useful tip on online purchases is the ‘three-click rule’: if the customer does not get to what he/she wants in three clicks or less, they will probably give up. Also consider any special features that your site may need, such as the option to use vouchers and coupon codes.

5. What types of resources will the business need?

Make sure you have all the necessary tools or programs you need to create your website, such as Fireworks, Dreamweaver and Photoshop. You may want to consider hiring a web developer or manager whose task solely involves managing the technicalities of your website – to ensure that everything runs smoothly 24/7. Another option would be to outsource the development, design and hosting of the website so that you can concentrate on your core capabilities.

6. Which e-commerce platform are you going to use?

Invest some time in finding one that fits your needs best since it will be hard to switch once you have started building your e-commerce website. If you are more technically knowledgeable, go with an open source cart. It usually offers a lot more customizations and a cheaper solution. But if coding isn’t quite your forte, consider hosted carts for your online shop instead. That additional few dollars spent is well worth to avoid hair-pulling moments. You should also consider checking out Shopify (http://www.shopify.com/), which is an e-commerce website solution tool that works in a similar way to the website builder tools introduced in Section 3.

7. How far will the business cast its net?

Operating online technically means having no geographical limits on selling. As such, you’ll have to clearly delineate the boundaries of your business operations on your website. Are you selling locally, regionally or worldwide? This will bring in other considerations such as currency, language and shipping. Shipping charges are a particularly major consideration as it is one of the main deterrents to online shopping. Finding a cheap and efficient shipping method can give you a great competitive advantage in the online marketplace.

8. What is your customer service policy?

Plan how the management should respond to questions, special requests or problems related to purchasing. Your website has to display an email address, phone number or automated form for customers to contact you. Good customer service functions as a feedback mechanism and is a great way to build customer loyalty.

9. How are you going to attract new customers online?

Make use of innovative ideas to spread brand awareness. You could consider the several methods discussed previously – email marketing, search engine optimisation, and social media. Recently, many online design and fashion brands have taken to Instagram to share pictures of their products and have successfully expanded their brand following.

10. How can you convert browsers into buyers?

Gaining the trust of shoppers is important, as some are still new to online shopping. Jupiter Research found that 54 percent of Internet shoppers have stopped buying from certain online stores in the middle of a transaction because they have concerns about service, delivery, shipping or handling. Go the extra mile to ease any reservations shoppers might have about purchasing online - such as ensuring the reliability of your website and the security of your shopping cart function. Make the purchase process short and sweet, and your shoppers will be thrilled with the convenience and ease that e-commerce offers.

The website of local online grocer, RedMart (redmart.com), is an example of how a smooth and functional user experience can be like. They have combined an easy to browse web catalog with secure transactions and reliable delivery service for a success formula. You can also gain more inspiration from FarEastFlora (fareastflora.com).