What is E-commerce? 

Electronic commerce or e-commerce is a term for any type of business, or commercial transaction, that involves the transfer of information across the Internet. It covers a range of different types of businesses, from consumer based retail sites, through auction or music sites, to business exchanges trading goods and services between corporations. It is currently one of the most important aspects of the Internet to emerge.

Ecommerce allows consumers to electronically exchange goods and services with no barriers of time or distance. Electronic commerce has expanded rapidly over the past five years and is predicted to continue at this rate, or even accelerate. In the near future the boundaries between “conventional” and “electronic” commerce will become increasingly blurred as more and more businesses move sections of their operations onto the Internet.

Business to Business or B2B refers to electronic commerce between businesses rather than between a business and a consumer. B2B businesses often deal with hundreds or even thousands of other businesses, either as customers or suppliers. Carrying out these transactions electronically provides vast competitive advantages over traditional methods. When implemented properly, ecommerce is often faster, cheaper and more convenient than the traditional methods of bartering goods and services.

Electronic transactions have been around for quite some time in the form of Electronic Data Interchange or EDI. EDI requires each supplier and customer to set up a dedicated data link (between them), where ecommerce provides a cost-effective method for companies to set up multiple, ad-hoc links. Electronic commerce has also led to the development of electronic marketplaces where suppliers and potential customers are brought together to conduct mutually beneficial trade.

The road to creating a successful online store can be a difficult if unaware of ecommerce principles and what ecommerce is supposed to do for your online business. Researching and understanding the guidelines required to properly implement an e-business plan is a crucial part to becoming successful with online store building.

What do you need to have an online store and what exactly is a shopping cart?

Shopping cart software is an operating system used to allow consumers to purchase goods and or services, track customers, and tie together all aspects of ecommerce into one cohesive whole.

While there are many types of software that you can use, customizable, turnkey solutions are proven to be a cost effective method to build, edit and maintain an online store. How do online shopping carts differ from those found in a grocery store? The image is one of an invisible shopping cart. You enter an online store, see a product that fulfills your demand and you place it into your virtual shopping basket. When you are through browsing, you click checkout and complete the transaction by providing payment information.

To start an online business it is best to find a niche product that consumers have difficulty finding in malls or department stores. Also take shipping into consideration. Pets.com found out the hard way: dog food is expensive to ship FedEx! Then you need an ecommerce enabled website. This can either be a new site developed from scratch, or an existing site to which you can add ecommerce shopping cart capabilities.

The next step, you need a means of accepting online payments. This usually entails obtaining a merchant account and accepting credit cards through an online payment gateway (some smaller sites stick with simpler methods of accepting payments such as PayPal).

Lastly, you need a marketing strategy for driving targeted traffic to your site and a means of enticing repeat customers. If you are new to ecommerce keep things simple- know your limitations.

Ecommerce can be a very rewarding venture, but you cannot make money overnight. It is important to do a lot of research, ask questions, work hard and make on business decisions on facts learned from researching ecommerce.

Government regulations for e-commerce

In the United States, the Federal Trade Commission (FTC) and the Payment Card Industry (PCI) Security Standards Council are among the primary agencies that regulate e-commerce activities. The FTC monitors activities such as online advertising, content marketing and customer privacy, while the PCI Council develops standards and rules including PCI-DSS compliance that outlines procedures for proper handling and storage of consumers’ financial data.


E-commerce is a transaction of buying or selling online. Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web for at least one part of the transaction’s life cycle although it may also use other technologies such as e-mail.

E-commerce businesses may employ some or all of the following:

  • Online shopping web sites for retail sales direct to consumers
  • Providing or participating in online marketplaces, which process third-party business-to-consumer or consumer-to-consumer sales
  • Business-to-business buying and selling
  • Gathering and using demographic data through web contacts and social media
  • Business-to-business (B2B) electronic data interchange
  • Marketing to prospective and established customers by e-mail or fax (for example, with newsletters)
  • Engaging in pretail for launching new products and services
  • Online financial exchanges for currency exchanges or trading purposes

E-commerce Tips

One of the exciting aspects of being in the website development field is that you can often improve sales exponentially by making some minor site adjustments and avoiding some common website blunders. Online ecommerce merchants are all too familiar with the concept of optimizing their site for Google and the three other major search engines to get more organic traffic. To maximize their revenue potential, however, they also need to take a hard look at optimizing their site for humans. Getting the prospects to arrive at their site is only the first of several hurdles in guiding customers from an entry point on their site to the payment processing pages.

Recently, my firm made a series of revisions to a client’s web site to improve their conversion rate. This particular merchant was averaging roughly 940 visitors a day and was closing only about 3-5 sales a week – an abysmal conversion rate! In the 10-days that followed the release of the new, improved website, this client’s sales increased more than 300% compared to the previous ten days. Even though this client’s revenues were relatively modest, a 300% growth spurt has the potential to have a major impact on a business – especially in conjunction with content development, search engine optimization, and other design improvements.

There is no denying that sites need a substantial amount of traffic for economic survival and growth, and SEO can play a central role in achieving that.

However, if you’re going to work that hard to get traffic, it would make sense to maximize your site’s potential for sales conversion, as well as website traffic. Both those factors are vitally important to the success of an online retail business.

Here’s a list of checkpoints and simple adjustments you can make, which can have a surprising impact on your website’s conversion rate. Try these simple measures and let me know how they work out!

Getting the Masthead Right

The masthead is the horizontal graphic at the top of a web site, which plays a role in the overall “look and feel” of the site. The masthead should be clean and incorporate the following elements:

  • The masthead should be 120 pixels high and 1000 pixels wide
  • It should contain a small logo and a distinctive slogan
  • The company’s 1-800 number and/or local phone number are displayed here.
  • A site search box improves the navigability and overall functionality of the site
  • Utility links can also be a useful element to add to the masthead

Positioning and size can make a big difference. The masthead should be “high and tight” – 100 pixels is the ideal size, but it should be no more than 120 pixels high. This will allow more products to be seen “above the fold” in a shopper’s browser. Typically, online shoppers mentally block out the information in the masthead, and only look there when they need specific types of information. Examples include a phone number or a link to the shopping basket or policies page. This is definitely not the place to stroke your ego with a big logo and bloated graphics. It should be oriented to the expectations and needs of the customer.

Think of the site design, masthead, navigation and footer as a shopping interface. It’s all about ergonomics and usability. Don’t make the all-too-common mistake of having the graphics from your interface competing with messaging and product images. A subtler interface will make your product images and messaging practically jump off the page, instead of obscuring those vital elements with avoidable distractions.

This is not my opinion; it represents the latest phase in the evolution of the ecommerce interface. Perfect illustrations of my point can be seen on some of the leading ecommerce sites on the Internet, such as Macys.com, Target.com, and Homedepot.com. The mastheads are all “high and tight”, have a small logo, do not contain bloated graphics, and do contain the other items in the bulleted list, above.

Your toll-free number should be prominently placed in the masthead and include some verbiage such as “For Customer Services call 1-800 555-1212.” This information gives shoppers confidence that you can be contacted if they have a problem with a purchase.

Many ecommerce websites have what I call a “utility navigation”, which includes links to ecommerce functions, such as “My Account”, “View Cart”, and “Check Out”. This is also an ideal place to include a link to you policies, wish list, gift certificates, and “contact us” links. It’s advisable to keep the font small — 10 point verdana works nice. Some website designers use icons for these links, which can add to the site’s visual appeal. Personally, I like text links. They load faster and are unambiguous.

Integrating a site search field into the masthead is a common practice; and shoppers expect it to be there throughout the site. It’s a good idea to include this feature even if you don’t have a big product catalog. This, along with the other elements mentioned above, will give your site a professional appearance and help build a feeling of confidence in your shoppers.

Homepage Ad and Messaging

Since many Web surfers have a short attention span, it’s critical to let your visitors know at a glance what your site is all about. It helps accomplish this objective if the center of your homepage contains a distilled general message, consisting of 6 to 8 words. This message will probably take some brainstorming and time to get it right, but it’s worth the effort. Write down some ideas and share them with your staff or friends. Then, sleep on it, refine it some more, and take as much time as you need to get it right. Find the right supporting image from a site, such as www.istock.com, and be sure to purchase the appropriate license. Stock photography sites don’t take their intellectual property lightly, and have been on a rampage lately — suing site owners who use unlicensed images.

This is the part of the process where you need to get creative; it may be necessary to enlist the help of an experienced graphic designer to make sure your ad looks professional. Aim for a maximum ad size of 250 pixels high by the full width of the site. It’s highly desirable to conserve vertical space so you can fit a row of products below the homepage ad and above the fold. Your conversion rate will be favorably affected by having that row of products visible without having to scroll down.

Finding the Right Balance for Your Navigation

The navigation system is a critical part of a web site’s architecture, and should be avoid unnecessary graphics, buttons, and roll-overs. While it might seem like a “good idea at the time”, they will only get in the way of search engines and customers. Search engines regard the navigation system as the web site’s foundation. The navigation is literally an information hierarchy and has a major impact on the site’s search engine visibility. Give careful thought to your navigation system to include the keyword phrase that you’re targeting in your search engine optimization strategy.

It’s important to strike the right balance in the creation of top-level categories in your site’s navigation. Too many top-level categories are sure to backfire on you: Shoppers will feel overwhelmed and it may potentially lead to product list pages that have too few products in them. A good “rule of thumb” is to limit your top-level categories to between 12 and15 categories.

Fewer categories will allow room for other key elements that Internet shoppers expect to see under the navigation. Items to place under your navigation include an SSL Logo, graphics of credit cards, your offer of free shipping, a logo from your payment gateway, and you PCI scanning services. These trust-building images and logos add legitimacy to your site and make shoppers feel secure – a necessary ingredient in the sales conversion process.

SEO Footer

SEO footers are appearing on more and more sites, and with good reason: They provide an effective way of separating information pages from your product catalog. To make the most of your site’s sales conversion capabilities, your main navigation should only contain links to product pages. Avoid the mistake of distracting your shoppers with pages like “about us” in your primary navigational area. The SEO footer provides opportunities for internal linking, helps increase keyword relevancy, and offers access to internal informational pages. For an example of a good SEO footer, visit CremationSolutions.com.

Free Shipping Offers

Studies demonstrate that free shipping offers on web sites have a major impact on Internet shoppers and help to bring about more sales conversions. If you extend a free shipping incentive to your customers, make sure it’s highly visible in three places: the masthead, under the navigation, and on the product detail page next to the “add-to-basket” button. Recently, I was able to improve the visibility of a merchant’s free shipping offer (on orders over $75.00) by placing it under the navigation and on the product detail page near the “buy” button. The number of orders grew by 15% the following week.

“Now We’re Shopping”

When web visitors browse your ecommerce site they want to see product – and lots of it! Make sure your product list views contain three to five columns per product row. If possible, show 30 to 40 product thumbnail images per page. This will allow the shopper to easily browse through your selection and have a more satisfying shopping experience.


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