What is E-Commerce? Understanding the Essentials

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E-commerce is one of those catchall terms that covers a whole range of online activity. Essentially, we’re all at it in one way or another whether it’s selling unwanted gear on Gumtree, replacing it with new stuff from Amazon or sorting out our car insurance via the internet. These are all forms of e-commerce: the buying and selling of goods and services online.

Making money online isn’t just for the Mark Zuckerbergs of this world. For students and fresh graduates looking to put their ideas into play setting up a website can provide the ideal springboard. You don’t need a crash course in coding or an MBA to get up and running – but it helps to understand the jargon and know what you’re getting into before you ‘take the plunge’.

With this in mind here’s a quick tour of the e-commerce landscape to get you versed on the essentials before you start.

Making money through my own website: is it really doable?

Online is the channel of choice for students looking to sell their products and services and almost half do so from their own website. It helps that the UK is the e-commerce capital of the world: 65.5% of Brits now shop on the web and this figure is on the rise. We’re also ahead of everyone (including the U.S.) in terms of the amounts we spend online.

Here’s why it’s possible for students (and fresh grads!) to get involved:

  • Low start-up costs. Setting up shop in the old-fashioned bricks-and-mortar sense is out of reach for most of us. By contrast, in terms of time and money, a good website doesn’t come for free, but it’s certainly something that’s achievable.
  • Help in finding a market. You know there’s a market for your product it’s just not necessarily on your doorstep. A website allows you to break down geographical barriers and find out where demand for your product lies, all from behind your screen.
  • You can juggle your website with other things. A good e-commerce website will virtually run itself as it allows customers to go through the entire buying process without any real-time input from the owner. You should still be on hand to answer queries and of course, you need to ensure orders are sent out to customers. However, especially when you’re just starting out, it’s usually possible to run your business alongside your other commitments.
  • It’s a good way of learning on the job. You may have missed out on that internship, but, in terms of your CV, being able to say you run your own online business should more than make-up for this. Marketing your website, managing customer accounts, dealing with stock replenishment, predicting revenue and planning for growth – with your own site you have the chance to develop your skills in each of these areas.

What are we talking about? Some common e-commerce terms explained

Shopping cart/e-commerce platforms

For selling online you need to be able to manage your shop, i.e. add and arrange products and deal with customer orders. Just as importantly customers need to be able to place orders with ease and confidence. For this, you need a website with the right capabilities. These capabilities are called shopping carts or e-commerce platforms (same thing, different terms), and support the functions that allow people to buy from you and for you to manage your wares.

Check-out solutions

You don’t hand out your credit card details to strangers. So how do tiny shops persuade customers to buy anything? One answer is to let someone else, a payment gateway provider, to handle payment or checkout. Examples include WorldPay, PayPal and Amazon Checkout, which are recognised by customers as a secure way to pay for their goods online.


Your customers need to find your shop in the first place. Search engine optimisation (SEO) is concerned with sending the right messages to Google. This makes sure your site is featured as high as possible in Google search results when people type in search terms relating to your product. It’s quite a technical field, but is partly to do with the way you arrange your site (website architecture) and how easy it is for people to navigate through it. A big part of SEO also involves the information you provide to visitors and how valuable they found it in answering their queries (i.e., are your product pages clear enough?).

More broadly, SEO also involves building trust and authority. The more useful Google deems your site to be to the user, the higher up in rankings you’ll climb. However, SEO can quickly get complicated and finicky (there are many factors that contribute to how Google judges your site’s value), so once you’ve got started with online marketing, if your business looks set to grow, it’s well worth enlisting the help of an expert.


Those boxed ads you see at the top of search results pages don’t get there by accident. Increasing your website’s visibility ‘organically’ through SEO takes hard work, time and specialist knowledge. Pay-Per-Click (PPC) offers a further and often quicker way of boosting the number of visitors to your site. In a nutshell, you choose a search term (what people are likely to be typing into Google to search for your product) to target, set a budget and when a visitor clicks on your ad, you pay the current cost-per-click from your budget.

Read up thoroughly on Google AdWords before getting involved. Running a campaign without knowing what you’re doing can be a very quick way of losing money. Again, if you’re a complete beginner it’s worth getting help from an expert.

Website navigation / CRO

You’re likely to come across the term ‘conversion rate optimisation’ (CRO) as you do your research. In essence, it means making your website ‘better’ so visitors are persuaded to click that all-important ‘buy’ button. It covers matters as simple as choosing the right colour for your ‘add-to-cart’ button and in which order to display your product photos. It also includes how best to arrange your catalogue of products and other content on your site so that customers can navigate it with ease.

You should be aiming for a low ‘bounce’ rate (the number of people who take a look at your site and leave immediately) and a high ‘click-through’ rate (the number who take a look, like what they see and go on to take the next step in the ‘buyer journey’ – placing an order).

All this is just for starters. Want to find out about marketing for beginners and how to build an e-commerce store? Browse our help centre  for lots of hints and tips.

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