How E-commerce Works: Understanding the Operational Mechanisms

03 December 2023 - E-Commerce

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How E-commerce Works: Understanding the Operational Mechanisms

E-commerce, short for electronic commerce, refers to the buying and selling of goods or services using the internet. Over the past few decades, e-commerce has experienced significant growth, transforming the landscape of the global economy. This article will delve into the operational mechanisms of e-commerce and highlight some relevant Software as a Service (SaaS) products that facilitate e-commerce operations.

The Operational Mechanisms of E-commerce

E-commerce operates by combining three different systems¹ ²:

Web Server: This manages the online storefront and processes transactions. It makes appropriate links to bank computers to check out people’s credit card details¹.
Database System: This keeps a check of the items the store has in stock, constantly updating as people make orders and ideally making new orders with suppliers when stocks run low¹.
Dispatch System: This is linked to a warehouse where the goods can be instantly located and sent to the buyer as quickly as possible¹.

The operational mechanisms of e-commerce involve a series of steps²:

Product Selection: Customers visit the e-commerce platform, browse through the products, and select the ones they wish to purchase².
Order Placement: The selected products are added to a virtual shopping cart. The customer then proceeds to checkout ².
Payment Processing: The customer enters their payment information, which is then processed and verified².
Order Fulfillment: Once the payment is approved, the order is fulfilled. This involves packaging the product and preparing it for shipment².
Shipping: The product is shipped to the customer’s specified address².
After-sales Service: This includes handling returns, refunds, and providing customer support².

Relevant SaaS Products for E-commerce

Several SaaS products have been developed to facilitate various aspects of e-commerce operations. Here are a few:

Shopify: Shopify is a leading e-commerce platform that offers a range of features beneficial for e-commerce businesses³.
BigCommerce: Known for its robust features and scalability, BigCommerce is a great choice for growing businesses⁴.
WooCommerce: WooCommerce is a flexible, open-source commerce solution built on WordPress⁵.
Wix: Wix is known for its user-friendly interface and a wide range of design templates⁶.
Squarespace: Squarespace is great for beginners, offering a user-friendly interface and beautiful design templates⁷.
Magento: Now part of Adobe Commerce, Magento offers a flexible and scalable commerce platform⁸.
Salesforce Commerce Cloud: Salesforce Commerce Cloud provides a unified, multi-channel platform that simplifies commerce operations⁹.

Conclusion

Understanding the operational mechanisms of e-commerce is crucial for businesses looking to establish a strong online presence. With the right SaaS products, businesses can streamline their e-commerce operations, enhance customer experience, and drive growth.