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Home » What is eCommerce and How does it Work: A Beginner’s Guide

What is eCommerce and How does it Work: A Beginner’s Guide


In today’s digital age, we do almost everything online – from registering for a webinar, making a payment, even learning new skills. And of course, online shopping has now also become a common and popular practice among millions of people around the world.

That is the reason why the eCommerce industry keeps growing and showing staggering numbers on statistics each year. Today, there are at least 24 million eCommerce sites, and over 2.14 billion people worldwide are expected to buy goods and services online.

In this post, we’ll dive more into the definition of eCommerce itself and break down some of the crucial points you need to know to understand how eCommerce works.

What Exactly is eCommerce?

Even if you have no clue what eCommerce is, I bet you have ever used them when purchasing something online. Sites like Amazon, eBay, Best Buy, Etsy are some of the examples of eCommerce platforms. Now, you can already tell that eCommerce is about selling and buying goods and services online. The payment and customer data are needed to complete the sales.

It’s easy and convenient for people to look up a product they need on eCommerce sites and purchase it only with a few clicks. You don’t have to spend hours driving to the traditional offline stores and standing in line or queue to the cashier. Since you can’t really touch or see the products in real life like in an offline store, eCommerce provides you with multimedia content like product images or short eCommerce explainer videos to give you a clear insight into the product.

Everything you need is now available in eCommerce stores. And they also deliver your purchase to your front door. So, it should come as no surprise that eCommerce has changed the way people buy things and revolutionized how businesses conduct their daily operations.

Understanding how eCommerce Works

Now that you understand what eCommerce is all about, it’s time to understand how eCommerce works. From looking for products to selecting payment methods, everything in an online shopping process is done online. That being said, eCommerce works pretty much on the same principle as a traditional offline store does. There are four main components of work processes:


Receiving Orders

The first step in eCommerce is a customer looking for a product online they need in a platform. Customers can spend hours just browsing products, seeing product images, and reading descriptions. Once they find what they need in stock, they make a purchase and the system helps the seller to make a note of it.

Processing Order Information

The eCommerce system wants to make sure that your order is really what you want and will be delivered to the right house smoothly. Therefore, they need your order and personal information such as the quantity of the product, colors, types, your name, email, address, phone numbers, and more.


After you complete the order information, the next step is to make payments. In a traditional offline store, you can easily pay the seller with cash. But, when you shop through an eCommerce website, you have plenty of options for payment. You can pay with your credit card, debit cards, even cryptocurrency.

Once the payment is successful, the eCommerce system will show the customer that their order has been processed and the transaction is complete.


When your order has been processed, the seller will choose the delivery service to ship your product to your address. But, most often than not, they also allow you to choose your favorite or preferable delivery solutions (e.g., UPS, USPS, FedEx, etc.). All the logistics components play such an important role in ensuring timely delivery to your house.

For an eCommerce store that ships their products worldwide, they make sure that they provide international shipping methods and options.

Final Thoughts

People nowadays are using the internet for everything. Therefore, businesses or sellers out there are trying to tailor the application and method as per their convenience by leveraging eCommerce stores.

eCommerce is all about choice and convenience. It offers customers an easy, effortless, and quick way to shop. And all of those processes mentioned above are invisible or virtual to customers. All they can see is the device they use and the package that arrives at their door.