E-commerce refers to buying or selling products and services online or over the internet on retailers’ Web sites or mobile apps, or through marketplaces such as on Amazon or AliBaba. Given our own experience with e-commerce, it might be tempting to oversimplify the channel. But, it’s important to understand the interactions and activities at-play, as these reflect some of the implicit costs.
For example, digital marketing, including both Search Engine Optimization (SEO) and Search Engine Marketing (SEM) is used to connect sellers with potential buyers (Some social media platforms can also be used for the same ends). SEO requires web development, optimization, and maintenance to ensure the online visibility of a firm’s website in natural or organic search. SEM is a form of paid advertising that increases the visibility of a firm’s website in search engine results, such as through Google or Bing. Firms bid on keywords to ensure that when searches using those keywords are made, their website appears among the search results.
