E-commerce: Profitability and Business Incorporation Report

This report provides a comprehensive overview of e-commerce profitability and its impact on businesses. It explores how e-commerce has become essential for many companies, boosting profit margins and overcoming business challenges. The report analyzes the use of data analytics tools like Google Analytics to make informed decisions, and the importance of achieving a positive balance between revenue and expenses. It delves into strategies such as search engine optimization, social media marketing, and email marketing to increase website traffic and sales. Furthermore, the report discusses the significance of website design, high-quality images, and customer support in enhancing the customer experience and driving conversions. The report also covers different e-commerce models, including B2B, B2C, C2B, and C2C, and outlines the steps involved in starting an e-commerce business, from choosing a niche to designing a user-friendly website and attracting customers. The report emphasizes the importance of website design, high-quality images, and customer support in driving sales and building customer loyalty, providing valuable insights for businesses looking to thrive in the e-commerce landscape.

ELECTRONIC COMMERCE (E-COMMERCE)
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1. How is e-commerce profitable?
E-commerce has become totally inevitable to most businesses. Most business today that have adopted
e-commerce have made big profit margins. E-commerce has boosted the way most people perform the
business (e-commerce, 2013). Most of the challenges encountered in businesses can be overcome by
adopting the e-commerce technology. Most loopholes in businesses are avoided by use of e-commerce.
Using e-commerce brings along use of analysis tools. Much data is generated in the e-commerce
systems. This data can be used to make valid decisions by the business. The data is analyzed using e-
commerce data analytic tools such as Google Analytics.
For a business to achieve profitability then, the business must achieve a positive balance in revenue and
expenses. Every business aims at getting the highest profit margin. Every profit margin is expected to
be higher than the previous profit made. The internet is one major aspect that leads to huge profit
margins. Each business that incorporates e-commerce, is likely to use the internet in many ways to
ensure that the profit increases gradually.
With the use of e-commerce, businesses reach many customers in many different areas. When
businesses can access quite a number of potential customers, there are high chances of making more
sales, thus increasing the profit margin (Jelassi and Enders, 2015). E-commerce increases traffic to the
website by implementing: Search engine optimization, social media marketing and email marketing.
Search engine optimization, involves increasing visibility on most search engines such as Google,
Bing, Yahoo and many more. Social media marketing involves marketing the business through
channels such as; Facebook, Twitter, You Tube or Instagram (Liang and Turban, 2011). Email
marketing involves using email newsletters. The subscribers in the newsletters will keep the potential
customers with the update of the latest products in store.
When the website has traffic, then the business should work on enhancing the people visiting the site to
buy the products. The website should be designed in a more friendly way. A good website design is
achieved by, ensuring the navigation to different pages is efficient. The website should contain high
quality images. The high quality images will attract more users and all the users could end up buying
the products. The website should also display alternative products, in order for the customers to choose
the product they want. The site should be responsive to any device, the customer could be using to
access the website. On implementing the above factors, then the sales will increase and the conversion
rate will also improve. Business increase profit by increasing the sale and reducing the cost. The more
the customers the online business reach, the higher the chance of more sales. More sales leads to more

profit. On the other hand the cost of market will be reduced, less labor is required. The less the cost, the
greater the revenue. E-commerce is profitable to the businesses today.
2. A report of incorporating of e-commerce in a business
Introduction
E-commerce is one of the newest and most helpful technologies. Electronic commerce is the current
trend of most businesses. E-commerce is a business model that has been incorporated by most business;
due to the many advantages it brings to a businesses. E-commerce is applied in various market
segments. The market segments include: business to business, business to customer, customer to
business and customer to customer.
Business to business is also referred as B2B. The B2B e-commerce category involves online trading
between companies. B2B architecture involves: application service providers that include: hosting,
content management and data management, logistics and auction software solution software which
manages the content on the website and the delivery of purchased products to the customers. B2B
applications that are helpful in the industries. The benefits include: inventory management system,
payment management systems, distribution management system and channel management application.
Business to customer e-commerce architecture is also referred to as B2C. It involves companies and
customers. This type of architecture is widely used all over the world. Most business such as
Amazon.com, Noble, Drugstore, Beyond.com, ToysRus among others, have incorporated the
architecture in their businesses. Mainly B2C involves selling and purchasing goods and services
through the internet. The products involve both informational and physical goods. The informational
goods involve music, movies, software among others. The physical products include the electronics,
furniture, books, clothes, shoes, bags among many others. The services include food delivery, car
packing services, holiday vacations and many more.
Consumer to business is also referred to as C2B. The C2B e-commerce architecture involves consumer
initiated transactions such as airline tickets. The consumers determine the routes they need to follow to
reach their destinations. C2B involves the reverse auction by the customer.
Finally, Customer to customer which involves transaction between the individuals. The C2C e-
commerce is in different forms such as peer to peer systems, classified adverts and auction that require
bidding on the items being sold.
E-commerce involves transactions of various products and services such as books, clothes, music,
plane tickets, financial services and hotel accommodation services. Electronic commerce has enabled
establishment of a wide market globally. It has also enhanced efficient distribution of products and

services. Products can be delivered at the customers at their door step, which make is much convenient
to most people. Before deciding what you will sell you got to understand the business model. Below is
a business model of e-commerce.
Fig 1.1 E-commerce model.
Facts about e-commerce
E-commerce is a booming business today. E-commerce model is quite different from other typical
business models. The sales on the products depend on some factors. The factors include; the highest
profit margin, e-commerce starts with the persona, the distribution of the products, use of affiliate
marketing skills and the natural growth and projection. Building an e-commerce require more than
generating a great brand name (Pandey and Pandey, 2018). Also, a business can integrate the best ideas
but with no traffic to the website the business will flop. Customer traffic to the website is very
important. A business must understand the e-commerce niche, research on the e-commerce model,
understand the personas and the product selection, establish a brand, build an e-commerce website,
attract customers to the site and market the products online.
Choosing an e-commerce niche means narrowing down and be specific on a small sector. You should
identify the companies that are successful in the sector you are interested in. If the area is competitive,
then there good market for the products. If there is no competition, then, there is no much competition
in that sector and you should think of an alternative opinion.
You got to research and settle for a specific business model. Different business structures work
differently to various businesses. The business model that could attract many customers is a single
product category, which is supplemented with affiliate marketing. Also, the businesses need to identify

the personas and products that are appropriate for selling. After identifying the niche a business, it is
required to determine the targeted audience. After identifying the targeted customers then, you need to
come up with products ideas. This involves of how your products will be chosen over others. The brand
that you will come up, must be unique in the market and strive for the best brand. For a successful
business, the brand should connect with the persona. By identifying your persona then, it will be easy
in building an e-commerce brand.
Before setting up a store for the e-commerce business there are basic steps, that you must take. These
steps include: registering the business, have a store name, get the license for the business, get the
employer identification number, apply for the business permit and the business license, get the right
and most efficient vendors, create a logo for the brand and finally get a design to be used on the e-store.
The design involves the website colors, the photography to be used and other factors relating to visual
aspects.
When the basic steps are completed, then, the business can start the development of a well-designed
website. The design should be compatible with the e-commerce software. The factor that needs to be
considered in designing the website include loading speed, Search engine optimization, compatibility
with the payment gateways and the compatibility with the business structure.
After the hosting of the website, there has to be visitors to the website. There must be much effort in
attracting the customers. The more the number of visitors the greater the chances of making more sales.
To have more customers, the business should put more effort in marketing the brand and the products.
There are any ways of online making such as; use of social media platforms such as Instagram,
YouTube, Facebook and many more. Other ways of online marketing include use of coupons,
newsletters, and affiliate programs. The facts must be put into action before starting an e-commerce
business.
How to start an e-commerce business
There are several requirements to start an e-commerce business. The Four main requirements include;
great website design, high-quality images, top-notch customer support and find a unique selling
proposition. The website design contributes highly to the traffic in the website. A website with a great
design attracts more customers. The higher the number of customers the greater the profit margin.
Depending on the products that your business is trying to sell, try to act upon the customer needs. If the
customer needs are well represented in the website design, then, there is a high chance of making more
sales via the web system. The design customer needs should not be displayed in much details. This is

because there are high chances the customer does not have time to read all that information. The
content about products should be brief and precise.
The second factor to consider is use of high-quality images. The photography on the website really
makes and impact on the number of sales one can make. People are visual creatures. High-quality
images are usually linked automatically to professionalism and the level of trustworthy. If the way the
images are displayed on the website is beautiful and eye- catchy then, chances that the conversion rates
tremendously rise. One should not only limit the photograph to product images only. Basically people
tend to be imaginative (Kr. Luhach, K. Dwivedi and C. K, 2014). They try to see what they will
achieve after purchasing the products. Therefore, it is wise to add some brief context and showing
pictures or videos of how various products can help them in their day to day life activities. For
example, in this company, the sale of kitchen appliances can be boosted by adding pictures of how
some apparatus are helpful. And how the appliances tend to make work easier in the kitchen activities.
The third factor to consider is, ensuring there is top-notch customer support. Ideally, people expect
when customers buy products from an e-store they will come back and buy another product. This is
not the case. The customer may fail to buy another product due to failure of sufficient customer
support. Customer support effort is quite important as well (Pittalia, 2015). Customer support involves
rectifying the issue they are undergoing, helping them in the navigation through the website as some
customers are technology ignorant. Customer support is as important as the marketing effort. Efficient
customer support brings in benefits to the company. The benefits include; the customer will come back
to buy more products, it shows the company is reliable, the company will build brand awareness, it
improves the attitude between colleagues and customer need to communicate to the service and product
provider hence business-customer relationship is enhanced. Happy customers will always stick to the
businesses they acquire products and services from.
Data management
A lot of data is generated from the e-commerce sites, there are various tools such as Google Analytics
have been developed to manage the data. Google analytics is a power e-commerce analytic tool.
Google Analytic is free (Clifton, 2012). You only need to download the application and generate a
tracking code and inset it into the code on the website. The data analytic tools help the business to
make progress in the marketing effort (Enterprise 2.0: how technology, ecommerce, and Web 2.0 are
transforming business virtually: v.1: The strategic enterprise; v.2: The behavioral enterprise, 2010)
. There are many reports generated by Google Analytic tool such as the number of visitors in the site,
the transaction in the site, the revenue generated in the successful transactions and many more useful

report. To make valid decisions, the business must get deeper information from the analytic tool to
make better decisions for the company. Below is a screen shot of a Google analytic analyzed data.
Importance of e-commerce to a business
E-commerce brings quite a number of advantages to a business. The greatest benefit that has be
achieved, is the increase of sales by business online. Through the e-commerce businesses are able to
reach a wider market and globally (Expose Info Tech India Pvt Ltd, 2018). The wider the market the
higher the chances of making more sales. E-commerce is very convenient. The when people buy their
products the payment method is easier, since the payments are also done online via payment gateways.
The e-commerce sites attract customers with the search engine. The customer can get information for
various products online (Medium, 2018). The business can keep track of customer’s habit in the site.
E-commerce also allows the happy clients to market the product. Online market operated 24 hours in a
week. The e-commerce will also boost the awareness of the products.
The e-commerce helps in decreasing the costs of inventory management (M. Deulkar, 2017). E-
commerce also offer huge information which quite useful in decision making. Also e-commerce
provide the customers with detailed information about the products on sale. Through e-commerce a
business can calculate and evaluate the sales revenues, customer effectiveness and customer
engagement. A business can do a multi-site; whereby the business is able to provide co-branded
websites for specific customer (Pittalia, 2015).
Conclusion
From the above facts, e-commerce is a new technology that is being adopted today by most businesses.
E-commerce has advantages over the traditional ways of business. Most people are aware of the e-
commerce benefits and most business have switched to the e-commerce architecture (Mohammed and
Tejay, 2017). E-commerce is a promising technology. From data that is collected from the e-commerce
systems, the analytic tools are able to analyze the data and make decision from the analysis. Making the
right decision, from accurate data results to better decision making.
Recommendation
I would recommend the use of e-commerce in your business. as it is quite helpful and has a great future
for the business at hand. E-commerce is one of the latest technologies being implemented in business,
the switch to e-commerce will increase the revenue in the business (Datta, 2010). The number of sales
will increase and the business will have more customer globally.

E-commerce will make most of the business transaction easy and convenient (M. Deulkar, 2017). The
transaction will be faster. This is because all information the customer may need will be on the website
with clear instructions on how to make purchases. E-commerce today has turned to be part of every
business. With the current trend, business that have not adapted to e-commerce will be extinct. It upon
every business owner to ensure they have switched to the e-commerce technology (Tuten, 2010).

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