What's an e-commerce?

The electronic commerce or e-commerce, consists of the purchase and sale of products or services, through electronic means, like Internet or other computer networks. This presents a series of benefits for both the consumer and the company:

For the consumer: Democratization of products and prices. Access to more product information. Immediateness. Customization of the offer. Comparison of more efficient prices. Consumer participation throughout the purchase process: inspiration, search, research, comparison and purchase.

For the company: Borders open beyond geography. Transactional and communication costs are reduced. 24x7 availability. Customization of the offers/clusters. Development of market niches. It allows a greater analysis of the business, and measurement of actions in shorter time periods.

The different models of e-commerce are the following:

Marketplace:

Business Model: B2B / B2C / C2C

Income generation model: Fixed sale percentage. Fixed value for each publication. Ad revenue.

Inventory: Third party inventory. Rapid stock. Category growth.

Logistics: Owner is in charge of the inventory and of external providers.

Main Player Worldwide: Ebay, Alibaba.

Hybrides:

Business Model: B2B / B2C / C2C

Income generation model: Fixed sale percentage. Fixed value for publication. Sales margin. Ad revenue.

Inventory: Third party inventory. Own stock and storage.

Logistics: Owner is in charge of the inventory and of external providers.

Main Player Worldwide: Amazon, Zappos.

E-Retail:

Business Model: B2B / B2C

Income generation model: Sales product margins.

Inventory: Own stock and storage.

Logistics: Own logistics. External supplier.

Main Player Worldwide: Netshoes, Dafiti.

Main E-commerce KPIs are:

• SALE = Total value sold It is obtained by multiplying the quantity sold (Q) by the price (P).

• MEDIUM TICKET = Average sale value It is obtained from the quotient: Total Sale / # Transactions.

• NET MARGIN = Sales result after subtracting the costs generated by the sale (CV) and operating expenses. You get (Sale-CV-Operating Expenses).

• CPA = Cost of user acquisition You get: Marketing Investment / #Transactions.

• ROI = Return on investment You get: [(Net Margin - Investment Marketing) / Investment Marketing] * 100

• CONVERSION RATE = Reflects the achievement of the objective You get: (Transactions / Sessions Generated by the Marketing campaign) Another way to see it is (Sales / Number of visits)