May 28, 2024

What is an ecommerce merchant? 

Kristen Campbell

‘Ecommerce store owner’ is a term you might hear more often in 2024, especially since ecommerce merchants now make up more than a fifth of global retail sales. In 2023, U.S. ecommerce represented 22.0% of total retail sales, and global ecommerce sales were an estimated $5.7 trillion U.S. dollars that same year.

Ecommerce merchant refers to a business that sells its goods or services via digital channels. This could include apparel sellers, beauty brands, technology companies, or businesses built around marketplace sites like Shopify or Amazon. Ecommerce merchants offer their goods primarily through online channels, such as websites, apps, or online marketplaces, and process sales via electronic transactions. Payments can be made via third party merchants, like PayPal or Square, or directly through sites like Amazon. 

With such a wide range of business models included in ‘ecommerce’, it’s possible for programs geared towards ecommerce merchants to slip under the radar. When many people think of an ecommerce business, they typically envision a site selling a product direct to consumer. There are many ecommerce businesses outside of that realmFor example, ecommerce merchants include:

  • Subscription to services, such as media or products
  • Artists selling prints of their work 
  • Digital content creators offering courses online
  • Designers selling homewares from their own brand
  • Clothing brands offering hand-printed shirts on TikTok shop
  • Musicians selling recordings on their website
  • A wholesaler selling white-labeled products to businesses
  • A food business selling their cookies direct to consumer but their ingredients to restaurants

All of the examples above are ecommerce merchants: the brands, businesses, marketplace sellers, and creators that offer goods or services primarily sold online.

Types of ecommerce merchants

Ecommerce is a relatively broad term. Some ecommerce store owners might sell physical products like apparel, jewelry, or home goods, which require physical inventory and ship nationwide. Others may sell digital products, such as subscriptions, digital assets, or software. These ecommerce store owners differ considerably in terms of how and where they sell goods.

In general, types of ecommerce store owners include:

Types of ecommerce merchants: Retail ecommerce merchants

Retail ecommerce merchants sell physical goods directly to their customers. Retail ecommerce includes goods such as clothing, accessories, shoes, electronics, or housewares. 

Ecommerce store owners sell their products online via independent websites. These websites might be created by platforms such as Shopify or BigCommerce, or via custom websites with payment plugins, such as Stripe, Paypal, or Square.

Retail ecommerce merchants also sell goods on marketplace sites like Amazon or Ebay, either as the primary selling platform for the brand, or as an addition to regular sales. 

Types of ecommerce merchants: Digital ecommerce merchants 

Digital ecommerce merchants offer goods or services that can be accessed, downloaded, or viewed online. Digital ecommerce store owners offer products like ebooks, artwork, handmade goods, elearning tutorials or courses, music, or meditations. 

Digital ecommerce merchants may use platforms such as YouTube to promote content, before selling it privately via a Shopify or BigCommerce site. Other digital ecommerce stores use knowledge sharing platforms such as Coursera, Skillshare or Udemy, ebook marketplaces such as Kobo or Kindle, or sell handmade goods on sites like Etsy. Digital ecommerce sellers also operate on print-on-demand platforms like Teespring, Redbubble, or Printify, selling designs for clothing, stickers, or paper goods. 

Another type of digital ecommerce merchant could be dropshipping ecommerce (or ‘dropshippers’). Dropshipping businesses offer physical goods directly to customers, similar to retail ecommerce stores. However, dropshippers typically sell these goods without holding inventory. For example, a designer that creates printed sweatshirts might do the design work themself, but print and ship the shirts through a third-party, which only charges for the shirts they sell. 

Some service based ecommerce store owners could be considered digital ecommerce as well. For example, consultants, freelancers, or designers sell digital services via websites like Upwork and Fiverr. 

Types of ecommerce merchants: Wholesale ecommerce merchants

Wholesale ecommerce merchants sell products in bulk, most commonly to other businesses. For example, a wholesale store owner might sell cosmetic grade glitter to a US ecommerce business that makes nail polish. These wholesale ecommerce merchants typically operate via marketplace sites like Alibaba, business listings or directories, or traditional sales channels (such as trade shows). 

Print-on-demand companies, companies that offer bulk products plus dropshipping, or companies that create whitelisted or private label goods, also fall in the realm of wholesale ecommerce (depending on the services delivered). 

Additional types of ecommerce merchants include subscription box sellers, niche products or brands (such as sun protective clothing or customized children’s wear), 

Considerations for up-and-coming ecommerce merchants 

The ecommerce industry is as unique as the merchants who comprise it. With twentyfour-seven availability, global reach, and multi-billion dollar sales, ecommerce represents a new category of retail. While some considerations (such as opening and staffing a physical retail store) are removed from the shopping equation, others, such as shipping and logistics, have emerged. Ecommerce merchants are fundamentally different from brick-and-mortar retail – which means lenders, suppliers, and other strategic partners will need to understand who ecommerce merchants are, and what ecommerce store owners need.

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Kristen Campbell
Content Writer

Kristen is the co-founder and Director of Content at Skeleton Krew, a B2B marketing agency focused on growth in tech, software, and statups. She has written for a wide variety of companies in the fields of healthcare, banking, and technology. In her spare time, she enjoys writing stories, reading stories, and going on long walks (to think about her stories).