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What is eCommerce?



What is Ecommerce?

Ecommerce may not be a term everyone is very familiar with, but ecommerce as a practice has dramatically reshaped the way many consumers shop and browse products online. 

Ecommerce, also known as electronic commerce, essentially refers to the sale and purchase of goods or services online and the electronic transfer of money over the internet to complete these sales. Ecommerce is not just limited to websites, it can also be available through shopping apps or even social media.   

Over the past few years, ecommerce and online retail sales have become increasingly popular, hitting a total value of £3.9 trillion in 2020. 

Types of Ecommerce Models

E Commerce is an encompassing term for different types and channels of electronic retail and service sales. The main types of ecommerce models can be generally categorized into the following business models:

  • B2B

​​​Business to business ecommerce involves one business selling products or services to another business. Typically this business model involves selling raw materials, software, or business training.

  • B2C

Business to consumer selling is the ecommerce model most people are familiar with. Common examples of this model include clothing, shoes or homeware online stores.

  • C2C

Consumer to consumer selling has become a popular type of ecommerce model, and has made it easier for consumers to sell old or unwanted items. Selling platforms such as eBay, Shpock or gumtree are examples of C2C ecommerce websites.

  • C2B

Consumer to business selling is when a consumer sells a service to a business often to generate exposure for the business’ brand. Examples of C2B include photographers, freelancers and social media influencers.

  • Wholesale

Wholesale retail and ecommerce can be either B2C or B2B. Wholesale is the sale of products in bulk quantities making them an ideal choice for many businesses as well as consumers. Examples of wholesale ecommerce business include Costco or Brakes.

  • Dropshipping

This type of ecommerce business model can be adopted by B2B, or B2C businesses. With dropshipping, the handling and dispatch of the products sold is not handled by the retailer themselves, but a third party who will package and send the product directly to the buyer.

Where Ecommerce Takes Place


It has been estimated that 79% of smartphone users have made online purchases using their phone in the last 6 months, and mobile ecommerce sales alone are projected to reach £100 billion by 2024. With consumers gravitating to other devices for their online shopping it is vital to ensure that you choose an ecommerce platform that allows you to optimise for different devices and reach customers where they are. 

Mobile-friendly websites, whether ecommerce or other, are also now considered to be better optimised for users by Google. This can affect how visibile your website is in search engines too, making mobile and smart device optimisation even more crucial for online retailers and service providers.

There are many different ecommerce hosting platforms out there for businesses to use to build their website. Popular ecommerce technology providers include; WooCommerce, Magento and Shopify. Alternatively, businesses can also create a ‘shop’ on online marketplaces such as Amazon, eBay, Fiverr or Etsy, removing the need to build your own platform from scratch. 

How to Start an Ecommerce Business

Any retailer or service provider can take their business from store-front to digital! With ecommerce purchases growing every year, now is as good a time as any to make the switch to digital selling. Here are some simple steps and key considerations to make on the way to taking your business digital. 

Step 1: Products & product photography

If you already have a brick-and-mortar storefront, chances are there will be little for you to do when it comes to deciding on products to sell. It is important to consider how many more products you may need to have in stock in order to meet your in-store and online demand. Shop around for the best deals from suppliers as often bulk orders can lead to better deals. 

Product photography is also an important consideration at this stage. It is best to invest in the right equipment, or hire a professional photographer, in order to show off your products. Product photography is essential for ecommerce, where customers cannot physically see or hold the item. 

Step 2: Building your online storefront

With your product supply and images secured, you can now consider building your ecommerce website. At this stage it is important to consider whether you would like to create your own website from scratch or use an online marketplace such as eBay or Amazon.

When building your ecommerce website it is important to shop around ecommerce hosting providers to find one that meets the needs of your store. For example, businesses who have built their website using Wordpress will find WooCommerce the best choice for them as it is designed specifically for easy integration with Wordpress websites. Whereas larger businesses may opt for Magento as it offers greater customisation. 

Step 3: Finding and integrating an online payment gateway

With your website built and your products listed, you’ll need to find an online payment gateway to allow you to accept credit and debit card payments from customers. With eCommerce card payments are almost essential to completing sales and they offer greater convenience for many customers. It is crucial to choose your payment gateway carefully and to ensure customers feel that their data is being handled securely through your payment portal. Payment gateway providers will also charge a fee to get started and offer a variety of different services, so it is important to shop around to find the right provider for your store.

Step 4: Optimisation 

With your store now up and running and ready to start taking payments, you’ll need to be able to reach your customers. With more and more customers opting for tablets or smartphones when online shopping it is important to make sure that your website is as easy to navigate on a desktop as it is on a mobile device. Additionally, you will need to consider how best to optimise your website for speed. Consumers expect websites to respond faster on a mobile device compared to a desktop, so optimising for speed efficiency is crucial for mobile ecommerce sites.

Ecommerce Platform Costs

Shopping around for an ecommerce payment gateway is one of the most important considerations of setting up your online store. Different gateway providers will offer slightly different services and features, and therefore charge different prices. For example, some payment providers may offer built-in high grade security options, while others offer greater checkout customisation features. 

Most payment gateway providers will offer a monthly fee or a pay-as-you-go cost per transaction. Providers that charge their clients on a monthly basis can cost upwards of £20 per month and can vary depending on the volume of transactions made each period. Pay-as-you-go options can start from 2.2% per transaction plus an additional small fee which is often around £0.20. 

Social Media and Ecommerce

Social media is an invaluable tool for any eCommerce business, offering a free and accessible way to expand the reach of any brand and encourage increased sales. It has been estimated that in 2020 more than half of all global social media users between the ages of 16 and 24 used social media to research a brand. 

Many social media platforms now also enable consumers to shop directly from retailer’s social media pages, such as Instagram’s checkout options and shoppable stories offering a more accessible way to shop online.

While social media can integrate online shopping, it is best used as a facilitator, driving traffic to your main website. 

Benefits of Ecommerce

Ecommerce can have a host of benefits and create opportunities for all types of brands and businesses, regardless of size or industry. Some of the key benefits of making the switch to eCommerce include;

  • 24/7 accessibility

With no physical storefront to manage or open, ecommerce stores are open for business 24/7. This offers greater convenience to customers who may work or have other commitments during regular store opening hours, and the potential for increased sales for merchants.

  • Reaching more customers

Employing effective search engine optimisation (SEO) strategies can also allow your store to reach more potential customers with greater ease. Physical stores can limit your customer base by location, whereas online stores are accessible to any customer with an internet connection. By effectively optimising your website for search engines, new customers can reach your store just by searching for a type of product. 

Impulse sales

Impulse buying is common instore as well as online, however online stores offer greater opportunities to optimise product display towards impulse purchases. Including features such as “buy now” buttons that fast track customers through checkouts, or including notifications that indicate how many of a particular product are left in stock can contribute to more impulse purchases. 

  • Lower costs

The costs of opening and operating an online store are quite minimal compared to physical storefronts. From saving on storefront rent to reduced marketing costs through  using social media, pay per click and SEO, ecommerce offers a range of ways to operate a retail business with fewer costs. Additionally, with no physical store to manage, ecommerce business owners can also save on the costs associated with hiring employees.

  • Create more personalised shopping experience

When customers shop online, they leave a data trail which can be used to create a more personalised online shopping experience. If your customers choose to create an account on your website, this can be made even easier. Offering personalised product suggestions based off of previous purchases or aligning deals on their favourite products around birthdays or other seasons can lead to greater customer satisfaction and increased sales. While some level of personalisation can be replicated in-store, it can be much easier to create an entirely personalised experience online.

Drawbacks of Ecommerce

There are however, some drawbacks and limitations to ecommerce that business owners need to be aware of before launching their online store. 

  • Limited customer service capabilities

With a physical store, customers with questions can directly ask one of your employees and receive an answer immediately. Online, this process becomes much longer. Integrating chatbots or fast-response messaging with a customer service agent can help your store to offer greater customer service. However, with your store being online 24/7 your customers may also expect answers to their queries 24/7. Using an automated chatbot service can help you to field these questions day and night. 

  • Technical costs

While establishing an online store is cheaper than operating out of a physical storefront, there are several unavoidable costs when it comes to the technical aspects of your business. Hosting your website and managing your payments both need to be outsourced to professional organisations with the capabilities to handle demand. If something is to go wrong however or a server was to crash, the potential costs not only in lost sales but in the recovery of the site, can add up. 

  • Technical limitations

Much like the capacity of a physical storefront, your online store can also reach its capacity, but with a potentially more detrimental impact. If your online store becomes overloaded with visitors or orders, there is a potential that the website could crash. If this happens no customers will be able to shop or use your online store until the problem is fixed. 

  • High levels of competition

As it is so easy for businesses to set up an ecommerce store, it is no surprise that thousands of businesses have chosen to migrate to the digital space, creating higher levels of competition. While traditional brick-and-mortar stores often limit their competition through geography, the internet is accessible globally 24/7. Due to this, ecommerce business owners may have to spend more time and money establishing a greater competitive edge and presence to be visible online.

  • Length delivery times

Physical stores offer the convenience of purchasing a product and taking it home right away. Ecommerce businesses however, require customers to wait for several days for orders to be accepted, processed and dispatched to their home. Delivery times are also a point of great competition, as larger online retailers such as Amazon are able to offer next-day delivery due to the sheer volume of sales they make each day. Being transparent with your customers is the best way to avoid impatience over delivery times.

Successful Ecommerce Websites

To help you learn from the best, here are some of the most successful online businesses models and what they did right to achieve success in the online space. 


Amazon is the largest online retailer in the world, and has been a true pioneer in the face of ecommerce since launching its online store in 1994. Amazon’s success can largely be accredited to it’s highly customer centric business model, placing personalisation and usability at the forefront of its business design and continuously finding new ways to offer greater convenience to consumers. Data collection and analysis is also at the heart of their business structure, helping them to find the most efficient ways to deliver products and services in the shortest possible lead times.


Wayfair is one of the internet’s leading furniture stores, utilising dropshipping to reduce costs in handling stock that are passed directly onto the customers. Wayfair also incorporates personalisation into their business model, creating a more personal shopping experience with additional innovative features such as AR to show customers how their products would fit in their home. 


Birchbox is another business that has found great success in the online space with now well over a million subscribers. Data again plays a prominent role in the success of Birchbox. Asking subscribers to review each item that they are sent as part of their monthly subscription and uses that information to match products to each of their consumers. 

Birchbox’s success can also be attributed to their two-pronged business model. Offering both a beauty sample subscription service as well as an online beauty store offering full-size products. 


The world of ecommerce offers a whole host of opportunities for businesses of all sizes. With greater flexibility for both customers and merchants, it could soon replace many physical storefronts as the future of retail. 

Getting started creating your online store can be a daunting process, and finding the right payment provider is a very important decision to make. At Opayo we specialise in offering highly secure online payment options, to protect both merchants and customers from fraud. For more information on integrating Opayo’s online payment gateway into your ecommerce store, or for more information on our payment products and services, get in touch with our UK based support team today.