What is an Internet or Online Merchant

Payments Learning Resources

What is an Internet or Online Merchant

Have you ever asked yourself the question what is an online merchant and what services do they provide? Read on for our thorough explanation including information regarding merchant responsibilities and potential partners.  

What is an online merchant?

a graphic displaying the many options available for online shoppers

An online merchant or e-commerce merchant is an individual or a company that sells products or goods exclusively online. To be able to sell online, a merchant needs to establish an online shop which will be connected to a payment gateway to receive online payments.

The responsibilities of e-commerce merchants are not merely limited to buying and selling products but also expand to other business activities. Compared to an online seller whose main responsibility is to generate profit through buying and selling goods, an online merchant handles several other functions of the business. These functions include coordinating the company’s marketing efforts, handling the financial process, promoting the products and/or services they offer, building a social community and managing logistics, and controlling the financial aspect of his company.

Online Merchant Frequently Asked Questions

  • What is an online merchant?
  • What are the responsibilities of an online merchant?
  • Monitoring of products
  • Inventory control
  • Coordination of digital media
  • Research of online and offline wholesalers
  • Customer Service superiority
  • Work to boost brand
  • What makes for a successful e-commerce merchant?
  • E-commerce merchant website optimization
  • Responsive design
  • Picture Optimization
  • Marketing
  • Navigational advantage
  • Customer satisfaction methods
  • Partners of an e-commerce merchant

Online Merchant vs Online Seller

Despite the increased responsibilities, being an online merchant is advantageous over being an online seller. Online merchanting is a holistic approach that can boost the company’s market position. Based on a research study by Statista, more than 2.14 billion people globally are expected to purchase goods and services online with global retail e-commerce sales exceeding 4.8 trillion U.S. dollars. More and more industries are expanding into the online space. From grocery to consumer electronics, and health products to DIY, consumers are increasingly selecting online as their avenue to make their purchases.

What are the responsibilities of online merchants?

an online shopping bag with a credit card displayed exiting it

As mentioned earlier, an online merchant is responsible for a series of tasks. Maintaining an online store requires time and effort as it involves more functions than simply selling goods. The tasks of an e-commerce merchant include:

Monitoring of products that come into and out of the online store – online merchants are in charge of the products they sell online and are responsible to remove products that don’t perform well in terms of sales. Special offers or product promotions are also actions performed by the merchant and should be supported by the sales and design team of the company.

Inventory control – merchants who sell products solely online might process thousands of purchases every day. It is vital to use an automated system that controls product availability in real-time and sends notifications for out-of-stock items to efficiently manage orders. For an online merchant, it’s important to know what goes in and out of the business since it can be easy for products from an online store to go out of inventory without constant monitoring by the merchant.

Coordination of digital media and product descriptions – an e-commerce merchant should work in conjunction with digital marketers and web designers to improve their website and the shopping experience of their customers. The use of clear visuals and straightforward item descriptions will enhance the customer experience which hopefully will lead to increased sales. For an e-commerce merchant, it is vital to have correct information on their website, with up-to-date optimized pictures and a complete set of product descriptions.

Research of online and offline wholesalers – online merchants are accountable for reaching out to wholesalers to restock a product or look for new items to add to their e-commerce store. For instance, online fashion stores are always on the lookout for the latest fashion trends and update their products accordingly. Even if an online merchant has a store that is doing well, if that store falls out of trend or relevant products for a time, it runs the risk of becoming obsolete to some audiences.

Customer service superiority – putting the customer first is a must for any merchant, let alone an online merchant who has no in-person influence on the customer experience. Customer-centric processes such as the fulfillment flexibility for on-time, and even next-day delivery capabilities, as well as the ability to make online purchase,  returns fast and conveniently is becoming paramount in the competitive e-commerce space. Online merchants must ensure they have the right processes in place to fulfill the demanding customer service expectations of online shoppers. 

Continually work to boost brand awareness both online and offline – an online merchant is responsible for building awareness for their brand through marketing activities like paid search advertising, promotional events, and marketing material amongst others. Communication channels such as social media can be used for promotions and constant merchant-customer communication. Furthermore, leveraging artificial intelligence collected via communication channels in order to execute marketing campaigns is becoming increasingly important to online retailers.

What makes for a successful e-commerce merchant?

a cartoon phone with a buy option displayed on the screen

An e-commerce merchant should possess specific characteristics to become profitable and effective. The characteristics of a successful online merchant should include:

A Fast website – this is vitally important for user experience. As traffic to the site increases you need to continually improve the site to ensure that the user experience is as effective as possible. One of the main issues that slow down the loading time of an e-commerce website relates to image size. It’s important to optimize the images before you upload them on your website by changing their resolution, compressing them, and cropping the unnecessary areas of the images.

Responsive website – with many customers arriving via mobile it is essential that an e-commerce store is hosted on a responsive website. An online merchant should really invest in a good website. A website is considered responsive when its design fits and functions based on the screen’s size without affecting its usability. This way, customers can easily browse and navigate an online store not only through a computer but also by using a smartphone or a tablet device.

Appealing product pictures – visual appeal affects sales generation. Ensuring that you use optimized high-quality photos that are appealing to the user is vital for the success of any online business. Although keep in mind that these pictures need to be optimized for the web, which means ensuring that the images are not a large file size, therefore, resulting in a slow website loading speed. 

Professionally written content – product descriptions need to be easy to understand and be written with marketing principles in place so that the user is drawn into the product. An online merchant can utilize a content writing agency that specializes in writing content for e-commerce stores to create a complete, attractive and informative website.

Frequent promotions – price reduction campaigns and sales promotions are a key component for brick and mortar stores and need to be a common practice for e-commerce stores as well. Use special offers to attract new customers or discount codes to reward your loyal customers. An online merchant should consider their online store as a place where customers should be attracted to. A person looking for something to buy online can choose from a plethora of options. That is precisely why online merchants should consider ways that would bring customers to their store over their competitors.

Easy-to-navigate store – successful online merchants place themselves in the customer’s shoes and create an e-commerce store which is easy to navigate and provides a seamless checkout experience to prevent cart abandonment issues. It’s also important to only ask customers the minimum necessary information when they fill their personal information and ensure that the payment process is quick and easy.  It’s important for merchants online to draw a clear path for their customers to venture through and reach conversion.

Customer reviews section – customer feedback is a necessary practice of every online merchant. There is no better way to improve e-commerce customer experience than directly asking the user to review the products, the overall service, the navigation experience on the online store, the delivery service, etc. Moreover, visitors who read positive customer reviews on the merchant’s website will trust the brand more easily than if a review section was not available. This is likely to result in higher conversion rates than would otherwise be the case. Providing the tools and even encouraging the customers to provide reviews and ratings is a must in converting today’s online shopper who looks for feedback from other shoppers prior to making purchasing decisions.

Communication with the customer – online merchants who communicate with their customers either through live chat support, FAQ sections, order confirmation emails, and properly trained call centers, enhance trust in the merchant-client relationship. Moreover utilizing merchandising features such as push notifications, wishlists, product ratings, and product reviews contributes to open communication channels with shoppers and ensure first class customer experiences.

Calls to action – an online merchant needs to have a purchase/add to cart/checkout option for users to click on that is clearly labeled and appealing both with text and from a visual perspective.

Online Merchants’ Partners

a graphic showing the many partners of the e-commerce online merchant

Just like a brick and mortar store is supported by various suppliers and partners, an e-commerce store must do the same. Some of the partners of an online merchant include:

Technology providers - they provide technological services to help with the development and optimization of the business. Many technology companies are cooperating with e-commerce platforms and provide their software as a plugin that the online merchant can integrate through the e-commerce platform they use.

Payment providers - a payment gateway is a crucial function of an e-commerce website. Online merchants partner with payment providers, such as Powercash21, to enable them to accept online payments through a secure payment gateway. Powercash21 works in conjunction with online merchants to ensure that a smooth and seamless payment experience is provided to the merchant’s clients. We provide a portfolio of global payment methods to support online merchants’ localization strategies, whether those shoppers come through online or mobile access points.

E-commerce platforms - e-commerce platforms are software solutions that enable the creation of online storefronts. Merchants should consider many things before choosing an e-commerce platform. Factors to consider include the available features, the loading speed, the compatibility of the platform with the structure of your business, and whether the platform is compatible with different payment gateways.

ERP system providers - Enterprise Resource Planning (ERP) software integrates the various processes required to operate a business on the backend such as inventory control, order management, accounting, HR, CRM, and more.

Logistics providers - Logistics refers to the management of how products are obtained, stored and shipped to their final destination. Every online merchant should invest in logistics digitalization and automation features based on the latest logistics trends to stay competitive in the market.

graphic of two people shopping online

There a lot of aspects to consider when it comes to online merchants. Since the internet has evolved, internet merchants are some of the most important market players today, with more and more people getting everything they require from online stores and shops. Although merchants are an important piece of the market infrastructure, there are many merchants who practice their business in the wrong way, mismanage and lose significant ground online.  Online merchants should be the leading examples of how an online e-commerce business should work and that is why they should follow specific procedures to stand out amongst the competition.

We hope that this article has helped you better understand what is an online merchant and how they differ considerably when compared to an online seller.

Article Source: 

Retail e-commerce sales worldwide from 2014 to 2021 (in billion U.S. dollars), (2018, March) The Statistics Portal. Retrieved from https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/

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