What is an Online Store?

An online store is a form of online business that can be defined as an internet-based marketplace. An online store can be in the form of a website or an application through which people can find and purchase products and services.

​Online stores allow customers to buy products or services in the comforts of their home. Customers can type the products they are looking for in a shopping search engine which will immediately display different online shops that can provide him the product.

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If the customer already has a website of his preference he will directly visit the website and make his purchase. To benefit from online shopping, the customers must have access to the internet (Computers, Smartphone, tablets) and a valid method of payment. The payment can be made by credit cards or online payment services such as PayPal.

How does it work?

​The world of E-commerce is seeing tremendous change with the new technologies bringing consumers and sellers super-easy accessibility to the internet and a better security system.

​People from everywhere around the globe now have access to the internet and can shop online whether at home, at their working places, while traveling or even while taking a walk on the street.

​With that being said, E-retailers are working very hard to meet the needs of their various customers and attract more traffic to their online shops.

Online stores are run using these three basic processes:

1. Online storefront

​Online storefronts are landing pages of any online store. They provide the customers with the company's description, the products or services available, store policies and the shopping cart. A shopping cart allows the customers to select the product they want to purchase or store the product temporarily if they haven't decided to buy yet.

​Once a customer decides on a purchase and enters his physical address, the storefront then makes tax and shipping calculations and provides the final price. Online storefronts can also provide live chats option where a customer can get assistance from the retailer.

2. Payment processing

​The online payment system allows customers to choose a payment method. The moment the online store's database confirms the availability of a required product and provides the customer with the final price, the customer then select a payment method.

​Most online business owners demand payment by a credit card or a PayPal account. However, other owners are more flexible on the matter and accept other forms of payment such as Cash on delivery, Electronic money, checks, crypto-currencies (Bitcoin, Litecoin, Ethereum,...).

​If the customer chooses a credit or debit card as a method of payment, the online store process the payment with a merchant system that is linked to a bank, once the buyer inputs his credit cards information, this system will automatically check with his bank whether he has enough funds and finally process the transactions. The customer receive a notification once the payment goes through.

3. Fulfillment

​Fulfillment, which is the final process, consists in tracking and delivering purchased goods from the online store's physical warehouse to the customer's address.

After receiving the payments, the business owner proceeds to deliver the products to the customers. In a case of physical products, the owner will ship the product himself or hire a courier such as UPS, DHL, FedEx, and so on.

The online business owner will then notify the customers that his package is on the way to his address and both the seller and the customer can track the package until it is delivered.

In a case of digital items or services, the delivery can be done just by the owner sending the customer a link (eBooks, Audio-books, software).

Types of Online stores

​There are several types of online stores based on the customer's preferences, age, shopping behavior or income.

1. General marketplace:

​This type of online store refers to big E-commerce companies like Amazon, Alibaba. The benefits of starting your online store with these platforms are that they offer e-retailers an already built-in large audience and they will not need to build up customers' trust from scratch.

​If a retailer plans to sell products of general interest online (electronics, books, clothing items), marketplaces are a great place to start.
The disadvantage of global marketplaces is that there is no real relationship between the seller and the buyer because for the customer it feels like he is dealing with Amazon, Jet.com, and so on.

2. Auction marketplace:

​Auction marketplace usually profits who want to sell rare or vintage products. The most well-known auction marketplaces are eBay, AuctionZip, eBid, and uBid.

3. Social media:

​Social media are a great way to increase your sales and get publicity, especially if you have many followers. Facebook, Instagram, Pinterest, and YouTube channels are among the best application with shopping functionalities.

4. Classified Listing websites:

​For people considering a re-selling business model or individuals selling items they no longer use, these websites are the best choices. Craigslist is the more commonly used for this type of transactions, but there are other sites like GumTree, Locanto, Oodle. The downside of these websites is that they get scammed easily, therefore offer little protection to their users.

5. Comparison shopping stores:

​This type attracts customers who are looking for lower prices, consequently, if a retailer thinks that he offers competitive prices he can list his business on Google Shopping, Shopzilla, Nextag and compete with other sellers with similar products.

6. Daily deals stores:

​These stores will offer the retailer to promote their products, and in return, the retailers will grant the store's subscribers discount on items. The benefit of this type of online store is that the retailers gain publicity and traffic as the stores often have huge E-mail lists. Groupon, LivingSocial, Woot are the most well-known sites in daily deals business type.

Online Store Best Practices

If a new online store entrepreneur want to profit fully from his business, he has:

  1. To take time and determine which type of online store fits his business model bette. 
  2. To have a perfect description of his products; he can use images, texts or videos on his website.
  3. To equip his storefront with an easy-to-use shopping cart mechanism.
  4. ​To regularly check the costumers' reviews to improve his business but also keep contact and build trust with the customers.

​I hope you now have a clear definition of what is an online store, please leave a comment below if this article helped you, and feel free to ask any question as well.


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