Home Newstech news E-Commerce is The Next Big Thing

E-Commerce is The Next Big Thing

by Alan Daniel
Ecommerce

E-commerce has been here in large part since Bezos left D.E Shaw on the east coast and made his way out west with Amazon. Sure, other companies were pressing forward like E-bay around that time as well as others that lie among peers in unmarked graves.

It’s been here since then, and more people have realized ways to use the internet and the worldwide web to improve their sales operations. If you think about it, eCommerce is just selling goods and services online. You can be Amazon or an influencer that can push sugar water and makeup.

The Eras of Ecommerce

Pioneers and Infrastructure Builders

It seems to me that we have several eras of e-commerce. The first era was prominent new names such as Amazon and eBay. These companies laid the groundwork for the future. They let you get a taste of what life could be like by goods online. You became comfortable with making payment online with Paypal through eBay. You used the service regularly and realized that it was reliable and secure.

You could order, and these companies had you back. If it was eBay, Paypal and eBay moderation had your back. Amazon had similar practices.

Alibaba and Jingdong grew in China. 

Corporations led this era, and it is where corporations captured a significant portion of the value.

Peer to Peer and Pure Brands (Various Forms)

The next era is where you see the acceleration of peer to peer growth. Of course, we had eBay in the prior epoch, but I don’t recall as many platforms facilitating the rise of third party selling.

Amazon slowly integrated the third party component to compete with the likes of eBay. We did have Craigslist, but that’s still IRL. Parallelly, you had people creating their websites and experimenting with ways to sell items and figuring out for themselves. Remember, Shopify came out in 2004 to improve the seller experience.

Further, I think we saw more of an evolution with the rise of Facebook groups and the Apple Store. 

The new wave is where platforms empower the user and create a community around it. That’s the Poshmarks, Etsy’s, and other platforms that would aggregate both sides of the picture uniquely.

 Then you have even more niche platforms like the GOAT applications of the world. Companies such as Away, Blue Apron, Haus, HelloFresh, and many other companies also are present that focus exclusively on specific niches.

Value Add

The next era will see more value add components. We were all witness to Paypal buying Honey. More acquisitions like this are what I see for the future.

We have a wave of buy now, pay later applications such as Afterpay, zipMoney, and others. Then there are companies like Honey and TryLolli that let you save or earn money on purchases.

The next component of value add is adding further layers of security for the consumer. That means having companies such as Clyde, which helps e-commerce entities provide extended warranty plans. Venture capitalists see the value here as they have invested more than $10 million in the company.

These companies will provide value to the e-commerce consumer or proprietor. They’ll help businesses to be as professional and compelling as your Sears, JC Penney, or Best Buy in warranties and customer service.

These value add businesses help make Shopify and independent sellers better directly or indirectly.

Growth of Ecommerce

I was thinking about eCommerce because of the rise of dropshipping and eCommerce gurus and advertisers. I kept wondering how much value is there, really? How valuable is Shopify? How many people are earning comfortable profits through the medium? Is it sustainable?

For instance, if you are dropshipping or buying products through Alibaba, slapping a brand on it, and marking it up, then pushing ads through Facebook, where’s the value? Does that last for a while? Sure, until there’s a flood of competitors like you see with Instagram yoga pants sellers.

Those that are more compelling is unique and intriguing brands. Those that stand for something have a resonating narrative and tap into a rising need for a specific lifestyle. These will be strong brands. But what do they look like? How do they continue to thrive in a fast-paced world?

This leads me to the last component of choosing whether you want to investor, a proprietor, or both.

Invest in Platforms or Participate?

Invest in E-commerce Platforms, Brands and Ecosystems

Investing e-commerce platforms is fairly simple but not easy. Allocating money can be fun but you will have to your due diligence and choose a select the right few to generate the most gains over your investing horizon. Investing in these companies will have lower downsides and will take much less time.

Investing in Amazon or Shopify is where you’re betting on the platform to attract more people, increase transactions, and capture more value. If you want to be an investor, you must consider the current valuation of a company like Shopify and Amazon. Is it justified? If so, why? If not, then when is the right time?

You must ask yourself which companies will continue to dominate the industry and grow? Let us take a look at a few of the main contenders.

  • Amazon – Went public in 1997 and traded at a paltry $1.97. It is now trading at around $2,500. The online giant started with e-commerce and branched out into cloud computing and other sectors. It now owns brands such as Whole Foods and is in talks to purchase J.C Penney. The question here is if Amazon is overvalued or if it can continue to allocate capital in a meaningful way to capture and delight customers. When buying Amazon you purchase the entire digital ecosystem of third party sellers, Amazon owned brands such as IMDB to Twitch and even Zappos.
  • Walmart and Jingdong – Walmart has been around for quite a while and is now an e-commerce player while continuing offline operations. It’s seen a boost of activity with the recent pandemic, has a strong balance sheet and pays a steady dividend. It was a little slow to the ecommerce sector but caught up quickly with a flurry of acquisitions such as Jet.com and Flipkart in addition to investments such as Jingdong. The large retailer has a 10% stake in Jingdong, China’s Amazon. The latter company, JD.com also moves at a fast pace and is invested in a variety of e-commerce and technology initiatives from drones to smarter shopping.
  • Alibaba – is also another giant in the e-commerce sector.
  • Facebook, Twitter, Pinterest & Google – Social media and search engines deserve a mention as they support visibility and reach. E-commerce brands rely on smart advertising and marketing through these platforms to reach people with ads and content. Of course, with companies such as Facebook and Google, you’re investing more than just advertising, you’re investing in infrastructure, artificial intelligence, and other components.
  • Shopify, Square, Paypal – Shopify presents itself an almost done for you storefront and differs from Square and Paypal, seemingly. While many know Square as a payments platform, it owns different platforms that rival Shopify. Paypal is stepping into e-commerce in more ways by integrating platforms like Honey to improve customer e-commerce experience.
  • Niche platforms and Standalone Brands – There’s companies such as StitchFix, Wayfair, and other brands that are e-commerce brands that focus on specific sectors and provide unique offerings. These aren’t platforms but rely on strong customer engagement on certain interests.

Investing In Yourself and Brands

Investing in a publicly traded e-commerce company means that you believe that is your best option. You want to have work life balance, go to work and then come home and exercise, read a book, or watch Jeff Goldblum on Disney +. But investing yourself and your brand(s) means that you’re interested in building skills and digital assets that could make you a millionaire like Dave Portnoy.

It isn’t easy and may not be fun all throughout but can take you to another income level like Ramit Sethi or the people at

If you’re seeking to be a shop owner, you’ll need to meet a few criteria. The first component is skills and the second aspect is capital.

These skills are:

Marketing – Facebook, Instagram, and storytelling. This means that you will want to know how to create a website or manage the creation of a third party site (Shopify or Square helps here).

A website is critical because it is an owned property. This means that you have much more control if you put in a little more work upfront. Why is control important? You work each day to create connections between people and search engine algorithms, you don’t want to be beholden to the whims of a third party interface. For instance, if Shopify boots you off its service or halts sales because of what it sees as price gouging, you are out of luck if that is your only online storefront.

An owned property, like your own website provides massive control but requires more work.

Next, focus on other aspects of the conversion funnel. That includes producing fantastic content that people want to see alongside conducting simple SEO on your site. This component will also require keyword research to understand demand and consumer sentiment. Further, it will comprise on site optimization in addition to link building. Finally, utilize social media as a way to build your business and increase your reach. Generating your funnel and keeping it growing will require regular work but pays off as you see regular sales.

Remember that the general sense is 2% of people convert online. For every 100 people who visit your site, 2% will likely buy your product. That is why you must continue to focus on your conversion funnel.

The conversion funnel is very important as it serves as the lifeblood of your business. The more engaging you and the more people that you connect with your message and brand the higher chances of success.

Sourcing – Dealing with and working with suppliers.

Customer Service – You will want to respond to customers as quickly as possible and resolve issues to minimize risk to your brand.

Startup Capital – Experts state that you can get started with e-commerce for as little as $200 to $1000.

Remember that e-commerce will continue to see a boost and grow as companies and individuals seek to transition stay robust post COVID-19.

You may also like

Leave a Comment

Do NOT follow this link or you will be banned from the site!