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Ecommerce, short for electronic commerce, is the buying and selling of goods or services over the internet. It includes more than shopping on a standalone website: people and businesses also transact through marketplaces, apps, and social platforms, selling physical products, downloads, subscriptions, and services.
For a beginner, starting an ecommerce business means choosing what to sell, who will buy it, how orders will be paid for and fulfilled, and which legal and operating requirements apply where the business is based. An online listing or store is only one part of that work.
How does ecommerce work?
A typical online order begins when a customer finds an offer and reviews its price, description, and terms. The customer checks out and pays through a payment provider. The seller then delivers the order by shipping a product, providing a download or account access, or performing a service. After the sale, the business may need to answer questions, handle returns, coordinate stock or suppliers, and attract more customers.
An ecommerce platform can combine tools for a storefront, checkout, payments, inventory, and customer information. It does not decide whether the offer makes sense or make the business profitable: the seller remains responsible for costs, fulfillment, customer experience, and marketing.
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Ecommerce is a significant part of retail in the United States, but it is not all retail. Shopify’s May 29, 2026 guide reports that ecommerce accounted for 16.6% of all US retail sales in the fourth quarter of 2025, attributing the figure to the US Census Bureau. That is a US figure for one quarter, not a global share. Shopify’s 2026 ecommerce basics guide describes it as the highest share outside holiday-pandemic spikes.
What are the different types of ecommerce?
Type can refer to the relationship between buyer and seller. That is different from the sales channel: a business-to-consumer seller, for example, might use its own store, a marketplace, or both.
| Model | Who sells to whom | Example |
|---|---|---|
| B2C (business to consumer) | A business sells to individual shoppers. | A retailer sells a product directly or through a marketplace. |
| DTC (direct to consumer) | A brand sells its own products directly to the end customer. | A maker sells through its own online store, with direct control over presentation and the customer relationship. |
| B2B (business to business) | A company sells to another company. | Wholesale goods, software, or professional services. |
| C2C (consumer to consumer) | One individual sells to another individual. | Individuals trade through a marketplace or other platform. |
| C2B (consumer to business) | An individual sells something to a business. | A freelancer or creator sells services or content to a company. |
| B2G (business to government) | A business sells to a government entity. | A company supplies goods or services under a government procurement arrangement. |
| C2G (consumer to government) | An individual makes a payment to a government entity. | A person pays a government fee online. |
The less common models can involve specialized purchasing, payment, or compliance requirements. A seller can also operate across more than one model or channel as the business develops.
How do ecommerce businesses make money?
The thing sold and the revenue model are separate choices. Common ways to earn revenue include:
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1Clear out junk files and repair common Windows errors2Scan for outdated or missing drivers - takes under a minute3Repair Windows errors before they cause bigger problems- One-time sales: the customer pays for each order.
- Subscriptions: the customer pays on a recurring schedule for a product, service, or access.
- Advertising or sponsored placement: a business earns by monetizing audience attention or paid placement.
- Affiliate commissions: a publisher or creator earns a commission when a referred customer buys.
- Transaction fees: a platform charges a fee for transactions it facilitates.
Some businesses combine models—for example, selling a product and offering a related subscription. Revenue is not the same as profit. Sourcing or production, payment fees, shipping, returns, customer acquisition, and support all affect how much remains after a sale.
How do I start an ecommerce business?
Work through the business decisions before treating the store or product listing as the whole project.
- Identify a specific audience and its needs. Narrow the idea to the people you aim to serve and the problem or want the offer addresses.
- Choose an offer and a delivery plan. Decide whether you will sell a physical product, digital offer, or service. Work out how you will source, make, or deliver it, and what it will cost to fulfill.
- Choose a sales channel and platform. Match the channel to the offer, target market, budget, and technical capacity. Compare marketplace discovery with the greater presentation and customer-relationship control a standalone store can provide; using more than one channel is also possible.
- Check local business and product requirements. Find out whether you need business registration, tax IDs, permits, or product-specific approvals in your jurisdiction. For a US starting point, Shopify’s 2026 online-store guide advises checking relevant state and federal agencies and local city or county authorities. It also identifies tax identification and business structure as considerations. This is not a complete legal or tax checklist; sellers elsewhere should consult their own government sources.
- Prepare store information and product pages. Give customers clear pricing, useful descriptions, and the policies they need to understand before ordering.
- Set up checkout and operations. Configure available payment methods, shipping or digital delivery, inventory or supplier coordination, and a way to respond to customer questions.
- Test, launch, and improve. Place a test order and check that payment, order information, and fulfillment work as expected. After launch, market the offer and use customer feedback and business results to refine it.
Should you sell through a marketplace or your own store?
Neither channel is best for every seller. A marketplace provides a place to list products and may help customers discover them; a standalone store generally gives the business more control over branding and the customer relationship. The trade-off is not simply convenience versus ownership: each option has different operational demands and capabilities.
- Discovery: consider where your intended customers already search and how you will bring traffic to a standalone store.
- Control: compare branding, customization, and access to customer information.
- Fit and operations: check support for your product type, checkout, customer accounts, inventory, and fulfillment needs.
- Cost and availability: verify current recurring and transaction charges, payment methods in your location, and feature limits directly with providers. These details can change.
- Capacity: choose an arrangement whose day-to-day workload you can manage.
When evaluating platforms, check that the tools support your selling model and expected growth rather than choosing on storefront appearance alone. Shopify’s 2026 ecommerce explainer is one vendor’s overview of ecommerce and platform capabilities; compare providers against your requirements rather than treating any one platform as a universal recommendation.
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Do I need a business license to sell online?
There is no universal yes-or-no answer. Registration, licenses, permits, tax obligations, and product rules depend on where the seller operates and what they sell. Check with the appropriate government agencies for your location before launching, and seek qualified legal or tax advice when the requirements are unclear. A platform’s ability to accept orders does not establish that a business has met its legal obligations.
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