how electronic retailing e tailing works
electronic retailing includes a broad range of companies and industries however there are similarities between most e tailing companies that include an engaging website online marketing strategy efficient distribution of products or services and customer data analytics successful e tailing requires strong branding websites must be engaging easily navigable and regularly updated to meet consumers changing demands products and services need to stand out from competitors offerings and add value to consumers lives also a company s offerings must be competitively priced so that consumers do not favor one business over another just for price reasons e tailers need distribution networks that are prompt and efficient consumers cannot wait for long periods for the delivery of products or services transparency in business practices is also important so consumers trust and stay loyal to a company there are many ways companies can earn revenue online of course the first income source is through the sales of their product to consumers or businesses both b2c and b2b companies can earn revenue by selling their services through a subscription based model such as netflix nflx which charges a monthly fee for access to media content revenue can also be earned through online advertising for example meta meta formerly facebook inc earns money mainly from ads placed on its facebook website by companies looking to sell to the millions who are on facebook regularly checking their pages types of electronic retailing e tailing business to consumer retailing is the most common of all e commerce companies and the most familiar to most internet users this group of retailers includes companies selling finished goods or products to consumers online directly through their websites the products could be shipped and delivered from the company s warehouse or directly from the manufacturer one of the primary requirements of a successful b2c retailer is maintaining good customer relations business to business retailing involves companies that sell to other companies such retailers include consultants software developers freelancers and wholesalers wholesalers sell their products in bulk from their manufacturing plants to businesses these businesses in turn sell those products to consumers in other words a b2b company such as a wholesaler might sell products to a b2c company advantages and disadvantages of electronic retailing e tailing e tailing includes more than just e commerce only companies more and more traditional brick and mortar stores are investing in e tailing infrastructure costs are lower with electronic retailing versus operating brick and mortar stores companies can move products faster and reach a larger customer base online than with traditional physical locations e tailing also allows companies to close unprofitable stores and maintain the profitable ones automated sales and checkout cut down on the need for staff and sales personnel also websites cost less than physical stores to open staff and maintain e tailing reduces advertising and marketing expenses as customers can find the stores through search engines or social media data analytics is like gold for e tailers consumer shopping behavior can be tracked to determine spending habits page views and length of engagement with a product service or website page effective data analytics can decrease lost sales and boost client engagement which can lead to increased revenue there are disadvantages to running an e tailing operation though creating and maintaining an e tailing website while less expensive than a traditional retail location can be expensive infrastructure costs can be substantial if warehouses and distribution centers need to be built to store and ship the products also adequate resources are necessary to handle online returns and customer disputes also e tailing does not provide the immersive emotional experience that physical stores can offer e tailing does not give the consumer a chance to smell feel or try on products before purchasing them sensory experiences that often result in a decision to buy browsing is also more pleasurable in person and lends to increased spending personalized customer service and interaction can also be an advantage to brick and mortar stores real world examples of e tailingamazon com amzn is the world s largest online retailer providing consumer products and subscriptions through its website amazon s website shows the company generated more than 280 billion in revenue in 2019 while posting more than 11 6 billion in profit or net income 1 other e tailers that operate exclusively online and compete with amazon include overstock com and jd com alibaba group baba is china s largest e tailer which operates an online commerce business throughout china and internationally alibaba has adopted a business model that not only includes both b2c and b2b commerce but it also connects chinese exporters to companies around the world looking to buy their products the company s rural taobao program helps rural consumers and companies in china sell agricultural products to those living in urban areas for the fiscal year 2020 alibaba generated nearly 72 billion in annual revenue while posting just under 19 8 billion in profit 2