Unit 1

Course Objectives

On completion of ICDL E-Commerce, you should be able to:

 Define key concepts of e-commerce and the e-commerce ecosystem including its social
and economic impact.
 Identify the main types of e-commerce transactions and e-commerce business models.
 Recognise key e-commerce adoption goals and planning considerations.
 Identify various e-commerce presence options.
 Recognise the key skills in setting up a store on an online store platform, a social media
platform and an e-commerce marketplace.
 Identify common e-commerce marketing tools and e-commerce performance metrics.

E-Commerce simply means "electronic commerce". You may see it written as eCommerce, e-
commerce, or ecommerce. They all mean the same thing.

E-Commerce refers to the buying and selling of goods and services that takes place
electronically, for example using the internet or mobile networks. In e-commerce, a transaction
takes place between a business and its customer.

E-Commerce transactions

E-Commerce vendors may offer their products via a website or an app, The consumer considers,
accepts, or rejects their offer entirely within the same virtual environment. An e-commerce
ecosystem is any network of interconnected functions that allows for the end-to-end process of
buying and selling goods or services electronically and remotely.

Examples of E-Commerce

Some examples of e-commerce include online stores, social commerce, online marketplaces,
and retail digitalisation.

Online Stores:

Many businesses use online store platforms to set up online shops and allow them to get
started in the world of e-commerce.
Online shops enable businesses to establish their identity online. They facilitate direct
transactions with their customers. This can save money for the businesses and their consumers
by reducing the overhead costs associated with running a physical store.

Social Commerce:

Some businesses have recognised the advantages of using social media as a potential sales
channel.

For example, the French cosmetics company L'Oreal capitalised on its large Facebook following
with the launch of a social commerce sales platform.

Online Market Place:

Online marketplaces invite businesses to set up virtual stalls on their websites. They provide
businesses with support by connecting them to potential consumers and enabling them to
conduct transactions.

Amazon International, for example, has a vast catalogue of products and it ships them
worldwide. These products are provided by many different, independent businesses.

Retail Digitalisation:

Some businesses with physical stores, sometimes called brick-and-mortar businesses, have
added new value to their business models by digitalising their customers' retail experience.

For example, Nike, a worldwide sportswear brand, uses the Nike App and other digital features
at its retail stores to offer an enhanced shopping experience to its customers.

E-Commerce has become an integral part of the modern world. It enables businesses to offer
products far beyond their locality or even their country. It also makes it easy for consumers to
find and pay for goods and services.

What is an E-Commerce ecosystem?

All e-commerce relies on a system of separate and independent services that work together.
These parts enable an online business to:

 Source products

 Provide access to their site

 Transfer money

 Communicate with customers

  Assure delivery to customers

Components of an E-Commerce ecosystem

Typical components of an e-commerce ecosystem include: Marketing, Platforms, Data

Processing, Payment Services, Warehousing and Logistics, and Communication Services.

E-commerce success is dependent upon each interconnected component in its ecosystem.

Smooth integration at every step, from purchase, payment, order fulfilment, to logistics,
delivery, and customer support, is important. Together, they create a cohesive business. One
weak link in this commercial chain will reduce the efficiency of this ecosystem.

Key Factors Supporting the E-Commerce Ecosystem

The key factors that support an e-commerce ecosystem include Trust, Digital
Readiness, Regulations, Economic Factors, and Social Norms. These factors can determine
whether consumers will engage in e-commerce or not.

Interconnected systems such as these make up an e-commerce ecosystem.

Summary :Having completed this unit, you

should now be able to:

 Define the terms e-commerce and the e-commerce ecosystem.

 Identify the main components of an e-commerce ecosystem, such as marketing, e-
commerce platforms, data processing, payment services, warehousing and logistics, and
communications.
 Identify key external factors supporting an e-commerce ecosystem, such as trust, digital
readiness, regulations, economic factors, and social norms.

Unit 2 : E-commerce Transaction

Unit Objectives

On completion of this unit, you should be able to:

  Identify the main types of e-commerce transactions, including Business to Business
(B2B) and Business to Consumer (B2C).
 Recognise key trends in B2B and B2C e-commerce transactions, such as cross-border
commerce, increased focus on user convenience, focus on purchase experience, and the
use of Artificial Intelligence (AI) in e-commerce.
 Recognise the economic impact of e-commerce, such as greater market access,
increased competition, and reduced time to market.
 Recognise the social impact of e-commerce, such as digitalisation, new opportunities for
entrepreneurs, and greater choice for consumers.

Roles Within E-commerce

The roles of businesses within an e-commerce ecosystem can be sorted into three broad
groups:

1. Suppliers: Vendors that supply products and services, such as manufacturers, raw
materials sellers, craftsmen, skilled labourers, and others.

2. Consumers: Customers who buy products and services, such as manufacturers that need
raw materials to make their own products, wholesalers, and retail customers.

3. Enablers: Businesses and entities that enable the exchange of products and services,
such as logistics experts, couriers, technological support, digital marketers,
infrastructural companies such as Internet Service Providers (ISPs) and electricity supply
companies, and governments.

E-Commerce Transactions

As an example of how e-commerce enables businesses to perform multiple roles, imagine a

manufacturer of smart gadgets. The manufacturer sources and buys digital components online.
They complete the transaction through an online marketplace that showcases their suppliers'
components. The manufacturer is a consumer when it buys the components to build the
gadgets, but is a supplier when it sells the finished gadgets to their own customers.

How do the different roles work together? How do they find the best way to do business?
There are several types of e-commerce business transactions, including:

 Business to Consumer (B2C)

 Business to Business (B2B)

 Consumer to Consumer (C2C)

 Consumer to Business (C2B)

E-Commerce Transactions: B2C

When you buy an item from an online store for your own use, you have taken part in a Business-
to-Consumer (B2C) transaction. An e-commerce B2C transaction is a sale or transfer of products
or services from a business to a consumer using an e-commerce platform.

In a B2C transaction, businesses sell to consumers who are usually the end-users of their
products.

The decision-making process for a B2C purchase is much shorter than other types of business
transactions. It can be characterised as: "Do I want this? Can I afford this?"

There are three main types of e-commerce platforms that facilitate B2C transactions:

1. Online store: Well-known brand names, such as Asics or Bellroy, usually have their own
online stores. Some of these stores are built using e-commerce platforms such as
Shopify, WiX, Squarespace, or Wordpress. Others, particularly for large retailers or
brands, can be proprietary.

2. Marketplaces: These are large, dedicated websites that allow brands to use their
webpages or apps to sell to consumers. Well known marketplaces include Amazon and
eBay, which are both American, and China's Taobao.
3. Social Commerce: Examples of social B2C e-commerce include Instagram for Business
and Facebook Shop. These platforms enable businesses to reach consumers by using
social media platforms.

B2C marketplaces tend to drive new development of technology in e-commerce. Some

examples include digital marketing, transaction data analytics, and cross-platform integration
between service providers. Machine Learning (ML) and Artificial Intelligence (AI) are also
deployed to power real-time customisation of and adaptation to consumers' shopping
experiences
E-Commerce Transactions: B2B

Business to Business (B2B) transactions are transactions that take place between one business,
such as a wholesale supplier or a manufacturer of goods, and another business, such as a
retailer or a manufacturer who buys parts to build their own products.

In B2B transactions, a business sells its products to another business. The buyer can use these
goods or services to help ru Examples of B2B transactions include the sale or licensing of
software, for example Salesforce and Qualtrics, where the products are sold as management
tools to other businesses. Other examples include the sale of industrial equipment that is used
to manufacture products for sale to consumers, or the provision of services on behalf of a
different business, as in the following examples.n their own business, or can resell them to their
own customers.

B2B Characteristics and Trends

B2B transactions generally have a longer sales cycle, higher order values, and more recurring
purchases than B2C transactions. There may be a longer decision making process, as businesses
must ensure that large investments in goods or services are worthwhile.

Smaller businesses can benefit greatly from the B2B e-commerce model. Lower overheads and
more efficient direct orders from suppliers can allow for significant savings, and smaller
producers can sell direct to other businesses without requiring an intermediary, which can
boost profits.

Best practice in B2C e-commerce is often applicable to B2B e-commerce as well. Examples
include:

 User convenience
 Cross border Commerce
 Purchase experience
 Use of AI and ML
The Impact of E-Commerce

How does E-Commerce impact the economy?

E-Commerce breaks the boundaries that can impede the growth of a traditional business, such
as their ability to trade in foreign markets. E-Commerce allows greater market access, increased
competition, and reduced time to market.

How does e-commerce impact society?

Some of the ways in which e-commerce impacts society include Digitalisation, Greater Choice
for Consumers, New Opportunities.
Click the images for more information.

Having completed this unit, you should now be able to:

 Identify the main types of e-commerce transactions, including Business to Business

(B2B) and Business to Consumer (B2C).

 Identify key trends in B2B and B2C e-commerce transactions, such as cross-border
commerce, increased focus on user convenience, focus on purchase experience, and the
use of Artificial Intelligence (AI) in e-commerce.

 Recognise the economic impact of e-commerce, such as greater market access,

increased competition, and reduced time to market.

 Recognise the social impact of e-commerce, such as digitalisation, new opportunities for
entrepreneurs, and greater choice for consumers.

Unit 3:

E-Commerce Business Models and Planning

In this unit, you will cover an overview of e-commerce business models and planning.

On completion of this unit, you should be able to:

 Identify the main e-commerce business models: direct to consumer, wholesale, retail
digitalisation, dropshipping, reselling, white labelling, and subscription.
  Recognise key e-commerce adoption goals, such as reaching new customers, creating a
differentiated customer experience, creating unique value, and reducing costs.
 Recognise key considerations in planning for an e-commerce business, such as potential
investments, products, potential buyers, platforms, promotions, and performance.
 Recognise the importance of product, market, and competitor analysis and identify
examples of common tools for product, market, and competitor analysis.

Direct-to-Consumer, Wholesale, and Retail Digitalisation business models

Some e-commerce models are an online extension of existing traditional business models,
but many new models have arisen out of the opportunities presented by the e-commerce
revolution.

Some of the dominant e-commerce business models are:

Direct to Consumer

The Direct-to-Consumer model is one of the fastest-growing B2C business

models. It's characterised by well-designed websites, direct sales through marketplaces or social
media, and live shopping services that position brands to sell directly to consumers.

The Adidas website includes a "SHOP NOW" option.

Adidas, a German sportswear brand, deploys a Direct-to-Consumer approach on their website

by embedding brand awareness into the buying experience. They highlight key messages and
new product launches, and include fashion and blog content to entice consumers to explore the
concept behind the Adidas brand. Their content is integrated with easy options to purchase
their products.

Wholesale

Wholesale retailers offer their products in bulk at a discount. Wholesaling is traditionally a B2B
practice, but many e-commerce businesses offer wholesaling to budget-conscious consumers in
a B2C context. For example, a consumer may choose to bulk buy cartons of wine in a single
purchase to enjoy a 10% discount and free delivery.

This model is particularly common for fast-moving products with consistent consumption.
Retailers who offer wholesale purchases direct to consumers are commonly found on large e-
commerce marketplaces such as Amazon (or Amazon Business) or Alibaba.
Trade ministries in some countries have also set up government-backed marketplaces to enable
their manufacturers to sell locally manufactured products. Tradekorea.com is an example of
this type of marketplace.

TradeKorea - a government-backed marketplace

Retail Digitalisation

Retail digitalisation offers retailers a way to combine brick-and-mortar business with online
shopping to provide a digitally-enabled innovative shopping experience.

Dropshipping:

Reselling:

White labelling:
Subscription:

E-Commerce Strategies and Adoption Goals

Basic Businesses Strategies

When a customer searches online for a product, research shows that they are more likely to
click on just the first three links on a search results page. Lower-ranked search results are
typically ignored. This limited opportunity to catch a customer's attention is a major driver of
competition in the e-commerce market.
In the commercial world, there are many strategies that can help businesses stay competitive,
including offering quality, solving pain points, and adding value.

E-Commerce Business Planning

Platform, Product, Potential Buyer, Promotion, and Performance

Potential Investment

The cost to set up and maintain a website depends on your business type. Potential investment
is another key consideration in e-commerce planning.

Potential investments can be broadly classified into one-time costs, subscription

costs, and other costs.

You may choose to do a potential investment table so as to gain a wider view on cost allocation
and total budget across time. We provide some examples for each of these costs.

What are Product, Market, and Competitor analysis?

Product, market, and competitor analysis help you to determine whether your plans will lead to
profitable and lasting business. Effective analysis allows you to make informed decisions about
how to best position your business in a competitive market.
Having completed this unit, you should now be able to:

 Identify the main e-commerce business models: direct to consumer, wholesale, retail
digitalisation, dropshipping, reselling, white labelling, and subscription.

 Recognise key e-commerce adoption goals, such as reaching new customers, creating a
differentiated customer experience, creating unique value, and reducing costs.

 Recognise key considerations in planning for an e-commerce business, such as potential

investments, products, potential buyers, platforms, promotions, and performance.

 Recognise the importance of product, market, and competitor analysis and identify
examples of common tools for product, market, and competitor analysis.

Unit 4:

Online Store Platform

In this unit, you will cover the basic concepts of an Online Store Platform.
An online store platform is an e-commerce website builder with templates that enable you to
build an e-commerce website quickly and easily.

Most feature drag-and-drop page editors, so you can create an entire website without writing a
single line of code. Platforms usually include everything you need to manage orders, shipping,
and more.

This learning material covers the use of Shopify as the main online store platform, Facebook
Shop as the main social-media-based e-commerce tool, and Amazon as the main e-commerce
marketplace platform.

An online store platform is an e-commerce website builder with templates that enable you to
build an e-commerce website quickly and easily.

Most feature drag-and-drop page editors, so you can create an entire website without writing a
single line of code. Platforms usually include everything you need to manage orders, shipping,
and more.

Examples: Wix – Shopify - Woo store

WiX is very easy to learn and use. The platform has a user-friendly interface. You can use their
templates and pick and match different themes to experiment with how you want everything to
look before launching your online store.

Shopify is designed for users with limited technical skills. The platform offers a built-in e-
commerce ecosystem with excellent support via live chat at any time. It features a library of
well-designed templates and add-ons,

Common Features of an Online Store Platform

All online store platforms offer their users the ability to set up a store front, including a
homepage, product pages, and search pages. They also include tools to control features such as
inventory, orders, shipping, marketing, and third-party integration.

Among the features most relevant to new e-commerce website owners are themes, design
flexibility, customisation options, brand identity integration, and connections to sales channels
on marketplaces and social media.

Shopify is one example of an online store platform that offers some of these common features.

Advanced Shopify features:

 Theme
 Design Flexibility
  Customization
 Brand identity
 Connection to sales channel

Setting up an Online Store: Basic Setup

There are four basic steps for setting up most online stores. For these examples, we are using
Shopify's online store, but the same principles apply on other platforms.

1. Set up an account
2. Select theme for your online store
3. Customize your online store page
4. Customize the theme of your online store

Having completed this unit, you should now be able to:

 Recognise common online store platforms and identify examples of online store
implementation.

 Recognise features of an online store platform, such as website themes, design

flexibility, customisation, brand identity, and connection to sales channels on
marketplaces and social media.

 Recognise the key steps necessary to set up a store on an online platform such as
account creation, theme customisation, business identity creation, adding product-
related information, setting store policies, selecting shipping options, and setting other
preferences.

Unit 5:

What is Social Commerce?

As social media platforms moved towards increasing their own e-commerce functionality, the
boundary between e-commerce and social media began to blur. Ultimately, this led to the
formation of Social Commerce platforms.

Examples of social commerce platforms include Instagram, Facebook, TikTok.

Facebook Shops allows businesses to list and sell products on Facebook and Instagram. As the
largest social media network, Facebook's social commerce channel is very popular with business
owners. Their free e-commerce stream operates as Facebook for Business.

TikTok users can post videos ranging from 15 seconds to three minutes long. Businesses use this
platform to post short, effective videos or highly edited informational content to raise
awareness of their products.

Initially, social media platforms merely helped users to share recommendations among their
own social networks. Vendors could use pre-existing networks to direct users to their own
online shops. Social commerce started out as Consumer to Consumer (C2C) commerce. Now, it
facilitates mostly B2C and B2B transactions.

Social commerce offers a lot of opportunities for growth. It can create the affinity necessary for
a customer to experience a brand at a more personal level. The social selling process is different
from selling on marketplaces and can be a lot more effective in influencing customer behaviour
over a short span of time.

Features of a Social Commerce Platform

 Post
 Image Sharing
 Link to online store
 Engagement with Potential Customers (Ask and Chat)
 Engagement with Potential Customers (Q and A)
 Engagement with Potential Customers (Messaging)
 Personalized Experience
 Multimedia Presentation

Unit Objectives

Having completed this unit, you should now be able to:

 Recognise common social commerce platforms and identify examples of social

commerce implementation.

 Recognise the main features of a social commerce platform, such as posts, image
sharing, links to online stores, engagement with potential customers, personalised
customer experience, and multimedia presentations.
  Recognise the key steps to set up a business presence on a social commerce platform,
such as setting up a business account, selecting checkout methods, selecting sales
channels, adding products, managing shops, and managing sales channels.

Unit 6:

What is an E-Commerce Marketplace?

An e-commerce marketplace is a third-party e-commerce platform where businesses showcase

their products or services alongside other businesses.

E-Commerce marketplaces contribute to about half of all global e-commerce sales. This makes
most sellers keen to establish a presence on them. A marketplace is an easy option to get
started in e-commerce, but it is essential that a new e-commerce business understands how
marketplaces work so as to reach its target market effectively.

E-Commerce marketplaces can be broadly catgorised as horizontal marketplaces or vertical

marketplaces.

A horizontal marketplace presents itself as a one-stop shop and emphasizes consumer

convenience. It aims to offer a variety of goods at competitive rates and uses various sales
tactics to attract consumers locally, regionally or globally. Sellers on horizontal marketplaces
gain immediate access to a broad customer base.

A vertical marketplace is an online marketplace where sellers sell products and services that are
exclusive to an industry, profession, trade, or specific group of customers with specialised
needs. Sellers on vertical marketplaces are visible to a specific target audience.

Examples of a Horizontal Marketplace include Amazon, Taobao, eBay, Lazada, Shopee, and
Mercado Libre:

Examples of a Vertical Marketplace include Zalora, Etsy, and iHerb:

Features of an E-Commerce Marketplace

Common features of an e-commerce marketplace include high traffic volume, a shopping

search engine, and product displays.
Page Product and Customer Reviews.

In the next section, you will become familiar with some of the common features of online
marketplaces, taking Amazon as an example.

Marketplace Features for Sellers

Marketplaces provide customised applications that allow sellers to set up their business with
them. Sellers for Amazon, for example, use a service called Amazon Seller Central (ASC).

Features on Amazon

The marketplace features on Amazon interface

include Catalog, Inventory, Pricing, Orders, Advertising, Reports, Performance, Apps &
Services.
Selling on Amazon (Part 1)

Overview

In this section, we are going to explore how to become a seller on the Amazon Marketplace, the
steps for listing products, and all the prerequisites for getting started.

Make sure you have the following before you sign up with Amazon as a seller:

 Business and contact address

 Mobile or telephone number

 Chargeable credit card details

 Identity details

To create an account as a seller on Amazon follow the instructions below

Product Listings and Selling Plans

A product listing is a page that gives customers information about a product. Amazon product
listings feature images of the products, product descriptions, and customer reviews. Sellers can
choose to add more detail, such as videos.

Depending on your selling plan, you can upload and list your products in different ways. The
most common are:

 Professional seller accounts that allow users to list products in large batches with bulk
uploading, or integration of inventory management using third-party systems. This helps
 sellers who have large catalogues of products or who provide lots of options such as
colours and sizes.

 Individual seller accounts allow users to list only one product at a time.

Product-related information

To list your product on a marketplace, you have to find a category for it. Proper categorisation
helps customers find products more efficiently and can make your description and keywords
more effective. Your products must also have an identity number unless you can provide
reasons for an exemption. An Amazon product identity number is called a Global Trade Item
Number (GTIN). GTINs accepted by Amazon include:

 Universal Product Code (UPC)

 International Standard Book Number (ISBN)

 European Article Number (EAN)

These codes and numbers are used by Amazon to precisely identify the item being sold. To sell a
new product that does not have an accepted identifier, you must purchase a GTIN or obtain an
exception.

Your products must also have a Stock-Keeping Unit (SKU). An SKU is a unique bloc of numbers or
letters. The most common type of SKU is a bar code or a QR code. If you use an Amazon
Fulfillment Centre, your products also need a Fulfillment Network Stock Keeping Unit (FNSKU).

Listing your first product

Having completed this unit, you should now be able to:

 Identify different types of e-commerce marketplaces, such as vertical and horizontal.

 Identify common examples of e-commerce marketplaces.

 Recognise features of an e-commerce marketplace, such as high traffic volume, shopping

search engines, search result pages, product pages, and customer reviews.

 Recognise the key steps to enable selling on an e-commerce marketplace, including how
to create an account, add a product, and set order fulfilment options.

Unit 7:

Overview of E-Commerce Implementation

By now, you have established an e-commerce presence. You are ready to continue your e-
commerce journey. The key to success lies in your ability to implement your plans and maintain
your online business.

This section contains an overview of some key factors for businesses operating on the three e-
commerce platforms that you have examined so far: online stores, social commerce, and e-
commerce marketplaces.

Up and Running: Online Stores

Your online store showcases your brand to your customers. Brand management and customer
engagement are the best ways to show customers that they can trust you to consistently deliver
quality products and good service.

Key factors in effective e-commerce implementation include brand experience, revenue

generation from marketing, and converting trust into loyalty:

Customer engagement is a core aspect of brand building, especially online. You can improve the
experience by enhancing your customers' journey and making it easier to find and purchase
your products. Offering an attractive, easy to use, enjoyable brand experience will result in a
more rewarding journey for you and your customers and will also attract more new customers.

Investing in the design and marketing of your store is an effective way to attract customers and
offer a positive brand experience. Design and marketing should make it easy for your customer
to discover your store, search for products, make a purchase, and arrange delivery. Good design
is also a great way to establish your identity and differentiate your brand from your competitors.

Your most loyal customers contribute 80% of your revenue. Maintaining their loyalty means
giving them good reasons to trust you. Something as simple as free delivery or personalised
responses can go a long way to showing that you appreciate their engagement with your site. As
well as functionality that makes their lives easier, you can also offer rewards to your most loyal
customers, such as personalised discounts, vouchers, free gifts, and exclusive offers.

Some Key Performance Indicators (KPIs) for an online store include Net Promoter Score
(NPS), sales conversions, and customer retention rate.
Up and Running: Social Commerce

Social commerce enables customers to support your business using social media. They can
support you directly, by purchasing your products, and indirectly, by sharing news about your
business and helping to popularise it. Social media is a way to engage your customers
emotionally, increasing their trust in your products. For example, Facebook allows prospective
customers to discover you through their friends. To expand your reach on social media, engage
your audience, be socially active, and create content:

, engage your audience, , and

Businesses join Facebook to take advantage of social media marketing. Unlike marketplaces and
online stores, Facebook allows businesses to engage their target audience directly using instant
messaging, live-streaming, and competitions or giveaways. The more you engage your target
audience, the better you become at selling to them.

be socially active

A Facebook shop operates like a store in the middle of a busy market that never sleeps. To
maintain your business, you need to engage with the online community and ensure that your
product is as distinctive and noticeable as possible. Post regularly, use content that highlights
your brand, run marketing campaigns to boost your visibility, and hone your value proposition
by keeping track of how your social media network responds.

create content

Social media thrives on content, including posts, videos, livestreams, and images. Facebook
empowers potential customers to engage with vendors and with each other to collaboratively
build the 'story' of a brand. Customers can subscribe to your brand's message and become a
loyal follower by interacting with you and one another, focusing on your content as a topic of
conversation. Create content that will appeal to your audience to enhance their perception of
your brand, drive engagement, and increase your brand's reach and popularity.

Up and Running: E-Commerce Marketplaces

Constant monitoring of your e-commerce business is a key factor in improving efficiency
and building a brand that customers can rely on. Sellers on e-commerce marketplaces
must, at a minimum, monitor messages, get product reviews, and fulfil orders:
KPIs to gauge marketplace performance include Order defect rates, pre-fulfilment
cancel rates, and late shipment rates.

Other Implementation Factors

General Requirements

In addition to the basic e-commerce considerations you explored in the previous section, the
following are important factors for any business, whether online or not.

Maintenance Costs

Most businesses set a limit on their monthly maintenance costs. This serves to control
expenditure and allows for budgeting for other items. Factor in as much of your maintenance
cost as possible when pricing your products to ensure that you can keep maintenance spending
as low as possible.

Scalability
Online marketplaces often offer scalability options as a key benefit. If you are successful enough
to expand very quickly you will have to make some key decisions.

Factors to consider during rapid expansion include:

 Technological Scalability - Is the online store or marketplace scalable in terms of visitor

traffic during peak times? Is there a limit to the number of orders you can receive per
day?

 Logistical Scalability - Are you exploiting the fulfilment service so that the per-item cost
is the best value?

 Product Scalability - Can you manufacture or order large amounts of product if you need
to? Models such as dropshipping offer the best options for rapid scalability, as you have
access to a consistent product supply without having to pay for warehousing.

 Service Scalability - Does your subscription offer you a cheaper rate if your sales volume
increases?

 Shipping Scalability - Are your cross-border shipping services scalable? If you sell to an
overseas market, or if you import products for distribution in a local market, you may
save money by switching to bulk or container shipments.

Payment Options

Payment options are an important consideration, especially if you offer cash-on-delivery

options, refund options, or exchange options. The sooner you receive payment, the better it
is for your cashflow and the quicker you can scale up.

The delay between a customer’s payment and the money arriving in your account is called
the payment holding period. Most marketplaces expect you to adhere to their rules in terms
of payment options and the payment period. Your cashflow may suffer if payment is slow
due to a longer payment holding period.

Order Fulfilment
 –

Order fulfilment can be challenging. It requires dynamic planning as your business grows. At
the early stages of an online business, order fulfilment is usually done by staff or the owner.
Automation is minimal, and the task is the least efficient part of the business, adding the
least value.

Every growth stage requires additional investment in order fulfilment or refinement of your
business model. When orders for your business increase to more than 100 a day, consider
delegating or outsourcing order fulfilment. When orders reach 1000 a day, source a suitable
fulfilment centre.

Some service providers have subscription plans for smaller scale vendors and provide
additional value-add upon scale-up, such as help with store management and marketing.

Liability

Most e-commerce businesses provide product guarantees, warranties, options for refund or
exchange, and return options.

As a business owner and an online seller, you must adhere to your country's consumer
protection regulations as well as those set by the marketplaces. You may also need to
adhere to additional regulations in your target markets.

Many marketplaces provide insurance options. For example, Amazon protects its consumers
by making product liability insurance mandatory for any sellers who reach $10,000 USD in
sales volume for three consecutive months. Click the Amazon Business Insurance form to
zoom in.

Tax

E-commerce businesses must pay tax on their income just like any other business.

Business owners must know and adhere to the tax requirements in the countries where their
businesses are based. It is the owner's responsibility to stay up-to-date with the latest tax
policies.

It is highly recommended that you enlist the help of a competent accountant with international
e-commerce experience.
E-Commerce Data Protection: Requirements and Obligations

Businesses collect, use, and transfer customers' personal data all the time. In some
jurisdictions, you are required to protect this data with a data management system and appoint
a data protection officer.

GDPR :General Data Protection Regulations, applicable in the European Union

CCPA: California Consumer Privacy Act, applicable in the state of California in the United States
of America

PIPL: The People Information Protection Law, applicable in mainland China

LGPD: Lei Geral de Proteção de Dados (General Data Protection Law), applicable in Brazil

UK GDPR: UK General Data Protection Regulations, applicable in the United Kingdom

PDPA: Personal Data Protection Act, applicable in Singapore

Digital data protection and security regulations are relatively new. Their novelty and the fast
pace of technological evolution means that these regulations are frequently updated to keep up
with new trends and threats.

Your Obligations

You must become familiar with Data Protection regulations in the jurisdictions in which you
operate. It is your responsibility to ensure that you have a system in place to securely process,
manage, and store your customers' data. Obligations may include, but not be limited to the
following:

 Inform your customers about data collection, usage, and disclosure before such data is
collected.

 Create and maintain a data management system that can securely handle data you
collect and use, including personal and financial information.

 Appoint a data protection officer or equivalent to be responsible for the implementation

and maintenance of your personal data handling system.

 Create and improve business processes related to the collection, use, and disclosure of
data, as well as processes controlling and monitoring all transfers of data to third
parties.

 Create and validate processes for emergency situations, such as data breaches or other
cyberattacks.
  Data Protection for Online Stores
 You are responsible for meeting all the data protection obligations in
the jurisdictions where you operate. Any country with data protection
laws can enforce compliance. The legal burden falls on you as the
business owner, even if you have appointed a data protection officer.
Be prepared to create and manage data management systems and
processes to meet your obligations.
 The following is an example of creating a privacy policy statement on
the Shopify platform. You can access this facility by navigating
to Settings and selecting the Policies tab. Other marketplaces
feature broadly similar options.
1. Open your shopify store and select Setting menu.
2. Select the polices tab
3. Select privacy policy and add your policy statement. You can select create from
template.

Data Protection on Social Media

Social media users must agree to privacy policies and grant permission to use their data
when they create an account. Running a social commerce business requires strict
compliance with the terms and conditions regarding privacy. You may need to take
additional steps to implement data protection. These steps may include:
 Publishing your own privacy policy
 Pointing visitors to your privacy policy when you need to collect personal data from
them

Facebook Shop, for example, allows you to create a link to your own online store. Your
privacy policy should be readily available there. You can also link your external privacy
policy page to your Facebook shop.

1. Log into your facebook and open facebook shop page then select setting.
2. Select page info tab and scroll to privacy policy field
3. Insert a link to your own site’s privacy policy

E-Commerce Data Protection: Privacy and Security

Data Privacy on Marketplaces

The terms "data protection" and "data privacy" are sometimes used interchangeably, but they
are not identical. Data protection refers to a business's overall control of personal data. Data
privacy refers to control over access rights to personal data. Online marketplaces such as
Amazon are more likely to use a data privacy notice rather than a data protection notice.

Marketplaces collect, use, and store personal data. Their data privacy notices apply to all users
of the site. As a seller, you must agree to their terms before using their service, just as a buyer
does.

Vendors do not own customers' data and do not have the right to contact customers beyond the
scope of an e-commerce transaction. For example, you are not allowed to call a customer to ask
if they would like to re-order a product, or to ask whether they're happy with your service.
Customers must explicitly grant consent before you can contact them directly.

Third-Party Security and Privacy Policies

Vendors must often share customer data with third parties, such as logistics providers or
delivery companies.

If your business deals with third parties, your minimum obligations include:

 A clear statement in your privacy notice that you will share personal data with third
parties in order to fulfill customer orders

 Ensuring that third-party providers meet data protection and privacy requirements

 The ability to check and remove any personal data from third-party data management
systems if necessary

Data Breach Response Plans

In the event of a data breach, which is defined as unauthorized access to personal data,
businesses must react swiftly and effectively to stop or reduce further damage. Your business
should have a response plan ready to mitigate and respond to data breaches.

Response plans may include validated processes to:

 Block unauthorised access if it occurs

 Contain the damage

 Assess the root cause of the breach

 Measure the effectiveness of the response

 Report the data breach to the authorities and customers

 Evaluate ongoing risk and prevent future breaches

  Support Resources for E-Commerce
 Most e-commerce platforms, offer certification programmes for their users. You may
tap on these resources to support your e-commerce implementations.
 The support resources on Shopify, Facebook Shop, and Amazon include:

 Shopify Learn: Features well-organised content including short videos, Webinar and
full-length courses

 Amazon Marketplace: offers seller University as a certification programme to help sellers learn how successfully sell
on its platform

 Seller university features a huge range of content including articles, videos, and webinars to help you run your store in
Amazon marketplace. It has a lot offer to both begginners and experts.

 Facebookshop offers free online courses for advertising on facebook and Instagram through facebook blueprint.

 Facebook blueprint: courses are online lessons that you can attend at your own pace. It features certification courses
to award credentials to those who demonstrate proficiency in required skills.

 Shopify’s seller education service is called Shopify learn.it used to be known as shopify compass.

Unit Objectives

Having completed this unit, you should now be able to:

 Recognise e-commerce implementation considerations such as maintenance, key

performance indicators, scalability, payment options, order fulfilment, liability, and tax.

 Recognise key considerations for data protection and security, such as data protection
regulations, third-party security and privacy policies, data breach response plans.

 Recognise support resources for e-commerce implementation.

Unit 8:

E-Commerce Engagement

In this unit, you will cover an overview of e-commerce engagement.

Once you take on an e-commerce business, you embark on a journey of constant striving to
engage your customers. The vitality of your e-commerce business is often dependent on your
effort to engage both your existing and potential customers.

Engaging your customers is often achieved through the application of digital marketing. Digital
marketing is the promotion of a brand to connect with potential customers using digital tools.
Digital marketing strategies that are widely used in e-commerce include search engine
optimization (SEO), pay-per-click, affiliate marketing, influencer marketing, and mobile
marketing.

Search Engine Optimization (SEO) Marketing is the practice of optimizing your online store so
that you can attract as many of your target customers to your products as possible. It includes
making sure that your website is quick to load and provides content that's relevant to the users'
search. Skilful application of SEO marketing makes it more likely that your business will appear
in a search engine's top results.

Pay-per-click is a form of paid advertising that allows marketing teams to essentially buy traffic
for their website. Marketers place ads on websites or search engines such as Google
Ads or Microsoft Bing and pay a fee each time the ad is clicked.

Affiliate Marketing relies on referrals from third parties, which are external parties or
companies. Commissions are paid to these parties based on sales that are attributed to their
efforts. This form of marketing may reduce costs and lessen your marketing planning load.
However, relying on third parties to promote your brand requires that you monitor and track
their work carefully.

Influencer Marketing

Online Influencers, sometimes called, Key Opinion Leaders (KOLs) yield considerable influence
over their subscribers or followers in social media through their contents. They are very
effective in promoting niche products as their followers trust their choices and
recommendations. For example, a highly successful professional basketball player is able to
attract more attention to a pair of shoes when he posts a photo of himself wearing them.

Mobile marketing initiatives can include many of the digital marketing strategies mentioned
above. They typically leverage a combination of text messages, social media, email, push
notifications, and mobile applications. The overwhelming popularity of smartphones means
that marketers must think about optimising their marketing strategies for smartphone users and
deliver a seamless, user-friendly experience

E-Commerce Marketing

E-Commerce marketing takes on new forms and strategies with the evolution of E-Commerce
businesses. It often aims to drive web traffic to your e-commerce business to maximise the
opportunity of potential customers engaging with your business.
Common e-commerce marketing approaches include online store marketing, social marketing,
and marketplace marketing.

Online store marketing tools are often well integrated with online store platforms. Setting up an
online store on Shopify, for example, allows access to a suite of marketing and analysis tools,
including the Marketing overview page shown here. Becoming familiar with tools and features
such as these is an important step in resourcing your online store

To access marketing features on Shopify :

 Log into your shopify account and choose Marketing on the left menu panel to access
Overview, Campaign, Automation
 In overview, Shopify provides some mainstream apps to integrate with your store.
Examples include Omnisend and seguno, Which are email marketing tools and snapchat
ads, which allow business owners to place ads on snapchat, a popular social media app.
 Other apps that work with shopify market include Facebook, Google and services such
as SMSBump. SMSBump is an advertising service that uses text messaging to mobile
phones.
 Using apps to connect to shopify marketing allows you to integrate your online store
with different platforms.For example you can connect your Facebook account to your
online store with a Facebook channels.
 Online stores run campaigns page uses a multichannel approach to save time and effort.
Numerous templates are available here for use across your other channels.
 The marketing automation page is used to set rules for automatic processes such as
giving discounts to returning customers or for bulk purchase. These value-added options
can help to retain customers, garner good review and gain referrals.

Social Marketing is a way to create marketing content and attract customers on social
networks. Your customers may already use social networking platforms such as Facebook or
Instagram. By advertising on these and other social platforms, you can promote your
products to existing customers as well as new customers.

To create a marketing campaign on Facebook:

1. Select Promote to access the ad creation menu

2. Select choose ad type. Use create new ad to make an ad using your own text, photos
or videos.
3. Create your campaign using the prompts and options in the left column the right
column shows a preview of your ad.
 4. Use the drop-down menu to set different types of interaction that you want to have
with facebook users for example you may want them to call you or contact you
through email
5. Target users who might be interested in your ad by specifying demographics such as
age, interest, location and others.
6. Select promote now to launch your campaign.

Marketplace Marketing

Marketplaces such as Amazon attract a lot of customers. As a seller, you stand to benefit from
their high traffic to make your product more visible to your customers.

On Amazon, you can tap on their advertising and campaign options to capture attention in a few
ways:

Headline search ads:

appear at the top of their list when customers search for a product. They will have a small label
that lets customers know they are sponsored these ads are targeted by keywords. Amazon
charges for them on a cost per click basis.

Product sponsor ads:

Appear on product pages. They also marked with a sponsored tag

Sponsored ads: Appear in strategic locations on product search results of a product search.They
marked with a sponsored tag

Limited time advertisement:

Are seasonal campaigns that draw customers to your products. For example on Black Friday
Electronic products are typically heavily discounted to boost sales

E-Commerce Engagement Performance

E-Commerce engagement through marketing and other measures drives business growth,
and this growth can be observed through a set of performance metrics. In addition to
revenue and profit, this set of metrics includes leading indicators like web traffic, conversion
into sales, and the amount of re-purchase.

Other general performance metrics that reflect the level of e-commerce engagement
include customer acquisition cost (CAC), conversion rate, and average order value (AOV).

Customer Acquisition Cost (CAC)

The CAC is the total amount you spend to acquire a new customer. It is measured by looking
at your marketing spend and how it breaks down per individual customer. The metric can be
calculated by dividing sales and marketing costs by the number of new customers acquired
for a certain period. You should do a good amount of research on this as the CAC varies
greatly according to the type of product and platform you use.

Conversion Rate

This refers to the percentage of prospective customers who eventually got to buy from you.
This is usually measured during the last stage of the marketing process where the
prospective customers are already buying from your store.

Average order value (AOV)

The AOV is a metric regularly used to measure how much your customers spend on a single
order from your store. It helps you assess how well you optimize your sales effort through
product bundling, incentivisation on bulk purchases, and subscription-based services.

Online Store Performance Metrics

Online store platforms like Shopify capture a lot of data that is useful for your online store to
measure and improve on your store.

In the dashboard under the Analytics menu, you will be able to read the most critical data at
a glance.

Social Engagement Metrics

Facebook Shop shows the level of engagement on your shop through various engagement
metrics like visitors details. It provides information on how your visitors interact with your
products, whether your content is attracting them to your shop, and whether they are
return customers. All this data give you a very good idea as to how your marketing effort is
helping to improve your conversion rate as well as lower the customer acquisition cost.

Facebook metrics that reflect the performance can be found in the Overview dashboard
under the Insights menu.
Marketplace Performance Metrics

Most marketplaces have comprehensive reports on the performance of your products. The
report available on marketplaces like Amazon include the metrics on the number of people
who have clicked on your product after a product search, and the number of successful sales
among the visitors.

In Amazon seller central, you can find these metrics under the Reports tab.

Some key metrics on the Amazon dashboard include:

 Facebook manager: is consolidation of all the product reviews from your

customers.its designed to give a clear view of your performance trend on how your
pics are being received on the market by leveraging on such reviews you can gain an
objective view of how well your business is succeeding in engaging your customers
with your products.
 Sales and traffic: the no of times your product detail page is visited and the amount
of sales generated from that traffic. This is basically the conversion rate.

Having completed this unit, you should now be able to:

 Identify common e-commerce marketing approaches such as online store marketing,

social marketing, marketplace marketing.

 Recognise common e-commerce engagement metrics such as online store performance

metrics, social engagement metrics, marketplace performance metrics.