What does eCommerce run on? What is its allied ecosystem?


What does eCommerce run on? What is its allied ecosystem? 

The first quick answer that come to mind? On Internet ya? what else. An eCommerce organization is primarily an internet phenomenon, right? It’s a web application after all. Well! Not really. It’s a whole web of aligned ecosystem of industries which run tightly together to get that stuff made and put into the hands of the end consumer. Any glitch anywhere in the chain and the end customer is left with a sour taste. Efficiently managing this ecosystem takes enormous patience, skill and experience.

Every industry needs supporting ecosystem to survive especially if you are building to scale. It’s a network of small, big industries which a company has to interface with directly or indirectly which form a successful enterprise. Most of the times success and failure of an organisation depends upon how well it identifies, optimally utilises the available ecosystem and how well it can manage the relationships with the same.

Now let’s take a look at the aligning ecosystem of eCommerce, there are more than 30 industries and I have tried to bucket them into these categories:

  • Bricks and Mortars  

  • Kernel

  • Money Managers

  • MegaPhone

  • Ecosystem Supporters

Let's discuss them one by one:

Bricks and Mortars

I call these the 'Bricks and Mortars' bucket, these are the industries that provide the building blocks of the business for any eCommerce site, lets enumerate them:

  • Web and Internet: Well, can we imagine eCommerce without the internet and web in the first place, first things first. Now let’s move ahead...
  • Mobile operators and carriers: Folks who bring internet to the masses, folks who bring telecommunication for your business, the communication lifeline.
  • Hardware and Networking: Applies to both the business owners and consumers, right?
  • Software and Software Service providers: The companies who provide the software on which the portal is built, those companies who develop the website for you.
  • Real Estate: Where will your office be?
  • Office equipment providers: Office needs a lot of stuff.. furniture, chairs, tables, white boards, markers, office stationery.
  • Govt: How much ever you hate it and crib about the crappy govt system, you still need necessary registrations and licences in place to even start your business, needless to say you would need to file returns and keep your books straight to remain in business as well.
  • Power suppliers: And you would need power supply and backup to run your office right?

The Kernel

These are the industries which touch build, store, preserve and distribute the real product that you intend to sell through your online portal.

  • Manufacturing Industry: Where would the goods be produced? Now if you build your own products and sell, this is a whole different animal to deal with. Even, otherwise, having great relationship with the manufacturers of the stuff you sell is quintessential to scale up.
  • Suppliers and Vendors: Distribution network attached to your business is so important (both from the procurement and delivery side)
  • Packaging and Labelling:  Yes, how well you pack and label is important for your brand as this is the first thing that the customer touches when she sees her packet of happiness. Ever seen how Apple packs and labels its products? Awesome.
  • Storage and inventory: The storage and inventory solution providers, the warehousing companies where you would keep the goods (in case you do not wish to drop ship) and all the more important if the goods are perishable.
  • Transportation/logistics and shipping: The  transportation industry moves your goods from the storage/distribution base to the consumer’s hands, an efficient delivery network (both long distance courier companies and last mile delivery network) is a very important cog in the your core wheel.

Money Managers

Money is lifeline of any business, how efficiently one utilises and manages money is quintessential to short/long term survival and growth.

  • Payment gateways:  They usually take away 2+% of your revenue straight away, how well you choose and negotiate with them makes a whole lot of difference to the bottom line of your business. It is also important to choose wisely to make sure all the banks, modes of transfer (mobile + credit card + debit card + net banking) are covered at the most cost effective and scalable manner.
  • Funding Agencies: Most of the start-ups shut shop because they run out of cash and eCommerce is one of the fastest cash burning industries. Your relationship with your investors (unless you have loads of money already), banks and other debt/equity based financial institutions which can provide you long/short term finance are very important. Mostly, start-up entrepreneurs do understand the importance of this facet, or the circumstances make them realize anyways.


If you build it they will come', does 'NOT' apply, as the matter of fact, it’s a race against time and a catch 22 situation: the faster you acquire customers, the faster you reach to your breakeven and tipping point. However, that also means faster burn out of cash.

“A man who stops advertising to save money is like the man who stops the clock to save time." -Henry Ford

  • Media, Entertainment and Events Industry: TV/Radio, Ad networks (mobile and web), Search engines, Online media, Print media, Social media, Events. Managing each of them is a different art and science in itself.
  • Marketing, Media and Advertising Agencies: These are experts who help you manage and optimise the above ecosystem.

Ecosystem Supporters

The very entities where you get help, advice, emotional and mental support and make buddies, it is so important to actively indulge and manage yourself as well as the entities themselves.

  • Business and Technology consulting organisations: These are folks who help you figure out the best solution, most optimal business model, help you do route corrections and appraise you of the pitfalls/challenges and ways to overcome them in time. (btw my company provides this support to budding entrepreneurs)
  • Industry experts: Folks who have vast experience in your industry and can help you as advisors, board members, consultants etc. in this mayhem of work, it is so easy to lose track of the right  path, it is always better to have someone who has been there done that to guide you.
  • Networking and Industry Forums: Like TiE, Nasscom, Industry specific associations and forums.

So you see there is so much that goes into starting and managing an eCommerce business. It becomes quintessential to deeply understand, appreciate the ecosystem that runs underneath that web front. This post is also a humble effort to make all the readers and users appreciate the ecommerce industry from the fact that it takes a lot to bring that book you just ordered online to actually reach you.

[I also run Connecting Dots, a business & technology consulting and software services company. At Connecting Dots, we help startups and emerging companies build great businesses.]