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E-commerce

Buying and selling of goods and services over the internet.

Definition

E-commerce refers to online retail and commercial transactions.

E-commerce Models

  • D2C: Direct to consumer
  • Dropshipping: No inventory model
  • Marketplace: Amazon, eBay
  • Subscription: Recurring purchases

Key Metrics

Why It Matters

E-commerce is the backbone of D2C brands and modern retail. Digital advertising is the primary growth engine for e-commerce businesses — from Meta Ads to Google Ads. Understanding e-commerce fundamentals helps you build profitable funnels, optimize your conversion rate, and scale your online store sustainably.

Examples

  • •A Shopify store running Meta Ads to drive traffic and sales for a fashion brand
  • •An Amazon seller using sponsored product ads to rank higher in search results
  • •A subscription e-commerce brand using TikTok to acquire new customers at scale

Common Mistakes

  • ✕Driving paid traffic to a poorly optimized store with slow load times and confusing navigation
  • ✕Not calculating true profitability after ad costs, COGS, shipping, and returns
  • ✕Focusing only on new customer acquisition while ignoring retention and lifetime value
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