What Exactly Is Ecommerce?

This idea may come naturally to some but there are many people out there that do not understand what eCommerce is and what it can offer. eCommerce (abbreviated for electronic commerce) is the exchanging of products and/or services over an electronic medium, most commonly the internet.

eCommerce got its start in the early 90's, companies such as Amazon and Ebay caught on early and offered services that allowed customers to purchase goods online. From the early 90's eCommerce flourished like no other market in this era, eCommerce simply exploded onto the scene until its bust in 2000, with any great rise in the economy it can be expected that the fall will seem just as dramatic.

This bust was only a road block in what is still considered a bustling market. Here are some quick facts about eCommerce directly from the Census Bureau:

• In 2005, e-commerce grew faster than total economic activity in three of the four major economic sectors covered by the E-Stats report. However, change over time in the e-commerce share of each sector’s overall shipments, sales, or revenues continue to be gradual.

• Merchant Wholesalers, including Manufacturing Sales Branches and Offices (MSBOs), ranked second, with e-commerce accounting for 18.3 percent ($945 billion) of total sales. In contrast to other sectors, e-commerce sales of Merchant Wholesalers grew more slowly than total sales.

• In 2005, as in prior years, Manufacturers and Merchant Wholesalers relied far more heavily on e-commerce than Retailers or Selected Service businesses. Manufacturers also increased their use of e-commerce at a faster pace.

• Retailers’ e-commerce sales increased by 22.2 percent. As a share of total retail sales, however, e-commerce sales remained modest—2.5 percent ($93 billion), up from 2.2 percent ($76 billion) in 2004.

The Yankee Group in Boston estimates consumers spent $730 million in 1996; by the year 2000, consumers will account for $10 billion in e-commerce sales. Business-to business e-commerce accounted for $12 million in 1996, but is expected to skyrocket to $134 billion in the next three years.

Forrester Research estimates that the overall Internet economy will approach $200 billion in 2000, up from $15 billion today. The report detailed five other major industry segments poised to reap financial gains from the Internet: infrastructure, access, content, financial services, and consumer retail.

Forrester predicts that durable goods manufacturers will lead the rush to Net-based e-commerce, reaching $99 billion in sales by 2002. Makers of paper, plastics, apparel and other non-durables will sell $17 billion online.

Today improvements in web site design and functionality combined with high speed broadband Internet connections greatly improve the online shopping experience, while improvements in Internet security and increasing public awareness has helped to boost consumer confidence. And a better understanding of Internet marketing and SEO allows savvy small business owners to successfully market their e-commerce business within the rapidly growing e-commerce industry.

The Internet is now a functional medium for consumers, information seekers, business owners and entrepreneurs. According to the online news source Internetnews.com, online shopping experienced a substantial increase during the 2004 holiday season with a 25% increase in online spending. According to research done by Goldman Sachs, Harris Interactive and Nielson/Netratings, during 2004 e-commerce sales were up to 23.4 billion dollars. That is a gain of 4.7 billion dollars from 2003. What drove this increase? With rapid improvements in Internet technologies and increased public awareness more shoppers are realizing the benefits of shopping online.

eCommerce has been an amazing asset to the United States economy and those individuals who aspire to become entrepreneurs. Expect more articles like this one on eCommerce, Entrepreneurship and so much more.