E-commerce is not a new concept. In fact, it is far older than you might think. While most people think of e-commerce as being something that was invented in the mid 1990s, the basic idea of trading via electronic data interchange has existed since the 1960s, when Value Added Networks (VANs) were used to pass information between shipping providers. It's true that consumer use of e-commerce did not become widespread until the late 1990s, when companies such as Amazon and eBay made it into mainstream culture, but as a whole the e-commerce industry is quite mature.

The Many Faces of E-commerce

E-commerce operates in many different ways. The most well-known e-commerce formats are B2B (business to business) and B2C (business to consumer), which operate as you would expect traditional businesses to work, but the internet has empowered consumers too, making C2C and C2B businesses viable.

An example of a C2C business would be eBay or Etsy — consumers list goods that they have purchased or even made themselves and sell those goods to other consumers, with the website taking a small percentage of the sale price in commission. C2B businesses operate in a similar fashion — Elance and other similar job sites allow one person to post a job listing, and then other people (or businesses) may bid on that listing.

Building an E-commerce Strategy

During the early days of e-commerce, consumers were naturally reluctant to share their credit or debit card details online, and companies had to overcome the general concerns about returns, shipping, delivery and other issues relating to mail order. Today, ordering products online is second nature for most consumers, so the main barrier that businesses have to overcome is simply standing out against the competition.

As with bricks and mortar businesses, e-commerce providers should perform a SWOT analysis to determine their companies' Strengths and Weaknesses as well as Opportunities and Threats. The SWOT analysis will help you to work out how to position your company in the market. Are you selling speed and convenience, trying to compete on price, or differentiating yourself by offering the best customer service? Do you want your brand to be known for quality, reliability or value? How many competitors do you have and are they going head to head against you or are you aiming for different audiences?

In addition to general branding, you must carefully consider legal issues, including the Data Protection Act and the DMCA. Make sure you have permission to use or reproduce any works that you share online, and learn as much as you can about your service provider's data security practices. Your customers place a lot of faith in you when they hand over their personal data. Sharing or selling that data without the consent of your customers is against the law, and abusing that data to send marketing messages to your customers will annoy and alienate them, so you must take every precaution to ensure that the data remains safe and secure at all times.