Ecommerce vs digital marketing is one of the most common questions considered for anyone looking to get started in the world of online business, and rightfully so. These are two proven business models that have enabled many people abundant financial success and provide enhanced lifestyle opportunities. Both Ecommerce and digital marketing are very broad terms that breakdown into sub-businesses. In the following article, we’ll go over the two business models, including all that they encompass, and help you decide which business is right for you!
Sell online with Ecommerce
Ecommerce is the buying and selling of physical products or services through the internet. Ecommerce appeals to consumers because it saves them time spent browsing in store and the money it costs them to get there. With Ecommerce, shoppers can efficiently find what they’re looking for, compare options, and make purchases any time of day that are usually delivered to them in just a few days. In the United States, E-commerce has grown to make up over 14% of all retail transactions, and that figure is even larger in some other countries like China, which is approaching 50%!
Fun Fact: It is believed that the first Ecommerce sale took place in 1994 with the sale of Sting’s “Ten Summoner’s Tales”.
Pros and cons of selling Ecommerce
Pros
Lower startup cost than brick and mortar business
24/7 income potential
Sell internationally
Digital tracking and analytics allow for a clearer understanding of customer actions
Unlimited “shelf space” making it easy to scale business
Cons
Returns can be higher because people can’t try before buying
Extremely competitive, customers can compare prices and reviews easily
IT security issues and credit card fraud can cause legal and financial headaches
Customers can quickly become impatient if shipping takes longer than expected
Regulation with tax compliance can be complicated (selling in various states, or countries)
Ecommerce website crash can destroy sales instantly
Promote over the internet with digital marketing
Digital marketing is the promotion of brands and products over the internet to reach customers and make sales. It’s estimated that around half of the total global marketing spend is digital. That percentage is expected to increase as more of the world has access to the internet and Ecommerce transactions grow. Digital marketers use digital channels like social media, emails and Google ads (or Google Shopping ads) to reach a relevant audience.
Pros and cons of digital marketing
Pros
Allows for global reach, marketing to a wider audience
More affordable costs than traditional marketing, and low startup costs as well
Trackable results, which allow for quick adjustments
Major service almost all companies need in order to be competitive, so there is an enormous pool of potential clients to go after
Cons
It takes time to develop the necessary skills and testimonials to attract clients
High competition as you’re competing with brands and other marketers, usually on a global scale
Increasing regulation and policies on the ability to collect and use consumer data
Ability to operate dependent on access to internet and technology
Options for selling Ecommerce
An electronic commerce, or Ecommerce business, can take many forms. You can sell the products of already established brands, you can create your own branded products, or you can even create digital products like comprehensive guides or courses that can generate sales well after their creation. You can choose from beginner-friendly business models like retail arbitrage vs dropshipping. Here are some of the most common avenues online entrepreneurs take for getting into Ecommerce.
Amazon FBA is where most people go
Amazon FBA is the most popular method of selling Ecommerce where sellers list their products on the Amazon Marketplace and outsource fulfillment of orders, including shipping and customer service, to Amazon. According to Jungle Scout, upwards of 3,700 new sellers sign up to sell on Amazon EVERY DAY in order to take advantage of the platform’s massive 310 million customer base. Selling Amazon FBA has tremendous advantages, including the fact that Amazon is a giant search engine where most online consumers go to start their product search and offers on-platform paid ads, called Amazon PPC, which lets you market your products to users with high-intent to purchase.
There are quite a few pros and cons when selling Amazon FBA and you can employ several different business models that each have their own benefits. However, we’ll save the deep dive into the Amazon FBA business models for another time.
Dropshipping is great if you're risk-averse
Dropshipping is a low risk Ecommerce business model. You start by finding a product on a C2C supplier marketplace like AliExpress. Then, you market that product, wait until a customer buys it from you for a markup, and then purchase it from your supplier and send them the shipping details for them to ship it to your customer. Dropshipping is really more about Ecommerce marketing. You’re not supplying anything that the customer couldn’t find themselves online for the same price.
Most customers turn to Amazon or a search engine like Google to start their product search online, so dropshippers use paid ads to push the product in front of the customer before they can really dig into their product search. You also create a captivating online store with E commerce platforms like Shopify and WooCommerce to showcase yourself as a genuine business selling products in your niche to validate your brand as legitimate. When comparing Shopify dropshipping vs Amazon FBA, dropshipping comes with low risk but low margins because you aren’t able to reap the benefits of bulk orders.
For sellers with an established brand and previous success in Ecommerce, Walmart.com provides another great opportunity to sell online. When considering the benefits of selling on Walmart vs Amazon, Walmart is growing rapidly and provides huge profit potential for those who can get in now while the competition is relatively low.
Success in digital marketing is based on your skills
Like Ecommerce, there are also various types of digital marketing services you can consider starting a business around. With digital marketing, you’re selling your skills and abilities, so it takes a bit of time to build up the knowledge required to sell your agency and prove to customers you can get them results. These are some of the most common services offered by digital marketing agencies in 2024.
Social media marketing
Social media marketing is using social platforms like Facebook, Instagram, LinkedIn, and Twitter to build brand awareness and drive customer interest to purchase. When using this marketing tactic, it's common practice to use influencer marketing on the social media platform of choice to improve results. When influencers are used, they promote social commerce, as more customers are likely to purchase when they see an offer is accepted by someone they respect or want to emulate. The global average of time spent on social media for internet users is nearly 2 and a half hours, so it’s no wonder many brands turn to social media for their marketing needs. As a social media marketer, you will need skills like:
SEO agency
Search engine optimization (SEO) is the process of improving your site ranking in search engines so that your site appears on page one of search engines, like Google. According to Backlinko, the first result of a Google search gets over 31% of clicks. Furthermore, less than 1% of Google searchers even bother to click on a second page link!
As you can imagine, ranking on the first page of Google is incredibly valuable to a company, making search engine optimization a highly sought after skill set. If you want to offer search engine marketing services to clients, you should know how to:
Lead generation
Lead generation comes in a variety of forms, including using paid ads or email marketing to generate leads for clients. However, we’re going to discuss the lead generation strategy with the BIGGEST opportunity, local lead generation.
With local lead generation, you get a website to rank as one of the highest search results on Google for a particular niche in a particular geographic location by using SEO. Then, when a customer in that area needs the service of the niche you are targeting, they come across your website and reach out for you to complete the service for them. However, you’re obviously not going to do that service for them, so instead you provide that lead to a qualified local business to complete that service. Since you are feeding that qualified business hot leads and helping to make them more money, they will pay you anywhere from hundreds to thousands of dollars per month to direct those leads their way! If you want to make money with local lead generation websites, you’ll need to be able to:
Paid advertising
Paid advertising is a digital marketing strategy where you target potential customers through a paid marketing channel like Google AdWords. You can use paid advertising for a variety of purposes, like marketing your own product, marketing someone else’s product to earn a commission with affiliate marketing, or even generate leads for clients. Paid advertisers optimize campaigns so that their advertising efforts generate more revenue than they’re spending on the ads. If you want to be successful with paid advertising, you’ll need to:
Ecommerce and digital marketing are not independent of each other
As you’ve probably come to surmise, Ecommerce and digital marketing are related business models that are intertwined in the world of digital commerce. One doesn't exist without the other. If you want to run a successful Ecommerce business, you’ll either need to either implement Ecommerce digital marketing yourself or outsource it to an e commerce marketing agency with expertise to handle it for you. With a digital marketing business, you’re helping potential customers to discover brands in the digital world, meaning any customer loyalty that is established or purchases that occur as a result of your digital marketing activities are considered Ecommerce.
Conclusion: Is Ecommerce or digital marketing better for you?
With no online business experience, try Amazon FBA
If you have no experience and little money but just want to start your journey making money online, getting started with a low risk business model in Amazon FBA is probably your best bet. This would give you the opportunity to earn some cash while learning the basics of running an E commerce business. This will also expose you to Ecommerce SEO and other aspects of commerce marketing so you can start building those skills and determine where your preferences are.
If you don’t mind doing a bit of everything and have some money, Ecommerce may be for you
With Ecommerce, there are a lot of variables outside your control, like supply chain fluctuations or changing consumer trends. You’ll also have to wear many hats when running an Ecommerce brand. You can expect to do things like product and industry research, find a profitable source for your products, come up with an Ecommerce marketing strategy, keep track of inventory levels, and much more. The upfront costs can be quite large, as you’ll likely need to source your products in bulk in order to generate a sufficient profit margin. Despite the many challenges, Ecommerce can be tremendously rewarding if you have the appetite for it. Get started by enrolling in an Ecommerce course like Create a Profitable Online Store.
Digital marketing is a great option if you have skills and enjoy working with clients
A digital marketing business is a great opportunity for those that have established skills and want to engage in more stable client work. You’ll need to be confident with your chosen craft so that you’re comfortable selling clients on your skills and are able to show them how your services are benefiting their business. You don’t need a lot of money to start a digital marketing agency if you’re willing to exchange your time for money in the beginning. As your agency grows and you put processes in place, you can outsource large portions of the work and implement some marketing automation.
Final Thoughts
Don't get stuck in analysis paralysis. Many people never end up starting an online business because they're waiting for the perfect opportunity. The most important thing is to make a decision and get going now! You can always pivot later if you find you prefer a different business model, but along the way you'll gain valuable skills and make some money that you can put towards your ultimate business in the future.
