About fifteen years ago, the phrase “bought online” sounded almost like a technological adventure. Today, people buy a toothbrush, a refrigerator, car insurance, and a pair of sneakers in one basket.
The habit has formed, and along with it — an entire layer of the economy that works to ensure that a click on the “Buy” button turns into a real product at the doorstep. That is e-Commerce.
Today we will figure out how e-commerce works from the inside: what models exist, what processes an online sale consists of, what metrics entrepreneurs track, and where to start if you want to launch your own project.
How many calls and sales will I get by ordering contextual advertising from you?
To put it in very simple terms, e-Commerce is all purchase and sale transactions that happen on the internet. You go to a website, put sneakers in your cart, pay with Privat24, pick up the package at a Nova Poshta branch a couple of days later — that’s it, you’re already a participant in the online marketplace.
Only the picture is more complex than it seems. E-commerce is far from just a storefront with a “Buy” button. Behind every purchase is a whole set of services: payment processing, delivery services, fulfillment, CRM systems, advertising platforms, support chats, and analytics tools. Remove any of these elements — and the order process turns into a beautiful but useless icon.
Important: e-Commerce is a broader concept than just an “online store.” It also includes online banking, booking accommodation on Booking, selling online courses, subscriptions to Netflix or Spotify. There may not be a product showcase, but the essence is the same — money and value move through the network.
By the way, in articles you will often come across the words “electronic commerce,” “online commerce,” “e-com,” “ecommerce” — and they all mean roughly the same thing. There is no strict boundary between the terms, so choose the one you like best.
The world’s first online purchase was made in 1994. An American named Phil Brandenberger ordered a Sting CD over the internet and paid with his Mastercard. The transaction amount was about $12. It seems like a small thing, but it was from this album that the era we now live in began.
Over more than thirty years, almost everything has changed. Amazon, eBay, and Alibaba emerged — giants that set the rules of the game for the entire world. Each country saw the rise of its own marketplaces. Smartphones have displaced desktop shopping, and same-day (or even one-hour) delivery in big cities no longer surprises anyone.
In Ukraine, the real boom in online trade happened around 2014–2020. Then came the coronavirus — and even the most stubborn fans of “seeing and touching in person” were forced to learn how to place orders through websites.
Today, Ukrainian e-Commerce looks like this: hundreds of thousands of sellers on Prom and Rozetka, the OLX marketplace, branded brand stores, and a plethora of niche platforms for specific categories — from pet supplies to vinyl records.
How does e-commerce work?
At first glance, everything is simple: the customer comes in, chooses, pays, receives. In practice, e-commerce works somewhat more complexly, and this short path is preceded by a long chain. Let’s go through it step by step.
The customer lands on the platform. Through a Google search, Instagram ad, email newsletter, YouTube recommendation — there are many channels. This is the traffic acquisition stage, and it usually costs the business the most.
Getting to know the product. The customer browses the catalog, compares options, opens the product page. This is where the fate of the deal is decided: good photos, honest descriptions, reviews, clear pricing, availability — all of this works to turn a visitor into a buyer.
Adding to cart. The product goes into the cart, but this is not yet a purchase. At this stage, some people leave — they got distracted, changed their minds, decided to compare with competitors. Store owners fight abandoned carts with emails, push notifications, and reminders.
Placing the order. The stage where the customer enters their address, selects the delivery and payment method. The shorter the form, the higher the chance the person will complete it. A long questionnaire with ten mandatory fields is a classic way to lose an order.
Payment. Here online payments come into play — via card, Apple Pay, Google Pay, banking app, or cash on delivery. In Ukraine, popular options are LiqPay, WayForPay, Fondy, Portmone.
Processing and packing. The order lands in the seller’s system, a manager (or algorithm) checks availability, reserves the item in the warehouse, and packs the parcel.
Delivery. The parcel travels to the customer via Nova Poshta, Ukrposhta, Meest, the store’s own courier service, or is picked up from a physical store location.
Receipt and feedback. The customer unpacks the product, ideally is satisfied, leaves a review, subscribes to the newsletter, and returns for another purchase.
That’s the journey. And at every point, the business can either gain or lose a customer — which is why those seriously involved in e-Commerce are constantly testing and refining things.
Advantages and disadvantages of e-Commerce for business
Let’s start with the good:
Low barrier to entry. To open a regular offline store, you need rent, renovations, sales staff, displays — that’s hundreds of thousands of hryvnias before the first sale. An online store can be launched with 10–20 thousand UAH, and a test Instagram account is completely free.
Geography is not a limit. An offline store in Poltava only sells to Poltava residents. An online store from Poltava can sell to Lviv, Odesa (or even Canada) if delivery is set up.
24/7 operation. While you sleep, the website takes orders. That doesn’t work with an offline location.
Detailed analytics. In an online store, you can see everything: where the customer came from, how many seconds they looked at a product page, at which step they abandoned their cart. An offline seller can only guess why a buyer turned away from the display.
Personalization. Based on purchase history, the store can show each customer their own product selection, their own price, their own promotions.
Now for the disadvantages — they exist too, and ignoring them is foolish:
High competition. A low barrier to entry works both ways: competitors appear faster than you can notice. Dumping is common.
Dependence on advertising. Organic traffic is slow and unpredictable. Most stores rely on paid advertising, and as soon as they turn it off — sales drop.
Returns. The customer cannot touch the product before buying, so returns are an inevitable evil. For some categories (clothing, footwear), the return rate reaches 20–30%.
The technical side. The site may crash on Friday evening, payment processing may fail on Black Friday, the marketplace integration may stop working after an update. All of this needs someone to fix.
Trust issues. Customers do not trust a new store — it takes time, reviews, and word-of-mouth for people to start buying without fear.
What types of e-commerce are there?
Now about who sells to whom. Types of e-commerce are typically divided by who acts as the seller and who as the buyer. There are four main models, plus several more niche ones.
B2C — Business to Consumer
The most widespread and familiar model. A company sells a product or service to the end consumer — an ordinary person buying for themselves. Went to Rozetka for headphones? That’s B2C. Bought a t-shirt on a brand’s website? Also B2C.
Examples: Rozetka, Amazon, ASOS, MakeUp, most local online stores for electronics, cosmetics, and clothing.
B2C features:
Short decision-making cycle — from “seen” to “bought” often takes just minutes.
Emotional purchases: visuals, reviews, promotions, and a sense of urgency matter.
Small average order value, but high order volume.
Mass audience — needs clear advertising and a simple path to purchase.
High competition and customer price sensitivity.
Seasonality is noticeable: Black Fridays, holidays, summer sales sharply change turnover.
B2B — Business to Business
One company sells to another company. Usually this involves wholesale supplies, raw materials, equipment, software, or services. Deals are larger, the decision-making cycle is longer, and a contract is mandatory. The customer here is not an impulsive buyer, but a purchaser with a budget and KPIs.
Example: a coffee producer sells beans to a chain of coffee shops. Or an IT company sells a CRM system to a beauty salon. Alibaba is a classic example of a B2B giant: Chinese factories find wholesale clients worldwide.
B2B features:
Long cycle — from first interaction to payment, weeks or months can easily pass.
Decisions are made by several people: a purchaser, a technical specialist, a financial director.
Individual pricing for different customers based on volume.
Decisions are made rationally: ROI, technical specifications, delivery terms matter more than a pretty picture.
Focus on long-term relationships and personal contact with the client.
C2C — Consumer to Consumer
People sell to other people. Usually through an intermediary platform that connects seller and buyer and earns through commissions or advertising. In Ukraine, this is OLX: someone sells a used stroller, someone sells handmade candles, someone sells a car. eBay in the US works the same way.
Interestingly, C2C is often the first step toward a full-fledged business. A seller starts with a couple of listings, and a year later already runs a store on Prom.ua.
C2C features:
The platform acts as an intermediary and has little influence on product quality — all responsibility lies with the seller.
Products are often used, one-of-a-kind, without warranty.
Price is negotiable — haggling is acceptable, unlike stores with fixed prices.
Trust is built on ratings and reviews within the platform.
Payment is often in-person or cash-on-delivery — people are wary of transferring money to strangers.
Low barrier to entry: anyone with a smartphone can post a listing.
D2C — Direct to Consumer
D2C (Direct-to-Consumer) is a relatively new but rapidly growing model. The manufacturer cuts out intermediaries and sells their product directly to the buyer — through their own website, social media, or a branded store on a marketplace. They win twice: they keep the margin that previously went to the retailer, and they get direct access to the customer — their data, feedback, and behavior.
How many calls and sales will I get by ordering contextual advertising from you?
Example: Ukrainian clothing brands that manufacture their own items and sell through their own website and Instagram, bypassing large retail chains.
D2C features:
The manufacturer controls the entire chain: from product creation to customer communication.
Higher margins — no intermediaries taking their cut.
Direct access to customer data: what they buy, how often they return, what they are dissatisfied with.
Strong connection to the brand and its story — customers buy not just a product, but the company’s values.
Requires your own investment in marketing: no one else will bring customers for you.
Feedback comes quickly and directly — you can quickly adjust the product.
B2G and G2B — when the government gets involved
Business-to-Government — business trades with the government. Most often this happens in the form of tenders and public procurement: for example, a company supplies computers to schools or uniforms to the army. In Ukraine, there is the Prozorro system for this.
G2B is the mirror situation: the government provides services to businesses online. Submitting tax reports through Diia, electronic registries, the taxpayer’s personal account.
Transparent but lengthy procedures — you cannot win a tender quickly.
Large and stable contracts, but with long payment terms.
High price competition: the winner is usually the one offering the lowest price.
Reputation and experience in public procurement play a major role.
C2B — Consumer to Business
A rare but interesting model. Here, an ordinary person offers something to a company. The most obvious example is stock photography: a photographer uploads images to Shutterstock, and businesses buy them for their websites and advertising. Freelancers on Upwork, influencers who sell brand advertising on their blog — all of this is also C2B.
C2B features:
The price is often set by the performer themselves or by the intermediary platform.
Businesses choose from many offers — competition is high.
Work format is usually project-based or one-off, rarely long-term collaboration.
Reputation and portfolio are everything: without reviews and case studies, it’s hard to break through.
Payment usually goes through an intermediary, who withholds a commission and guarantees transaction security.
Platform formats for online sales
The same model (say, B2C) can be implemented in different formats. And choosing the format is one of the first questions a budding online retailer asks themselves.
Own online store. A standalone website with a catalog, cart, and personal account. It gives full control over the brand, design, and customer data. The downside is that you need to drive traffic yourself, which costs money and time.
Marketplace. A large platform like Amazon, Alibaba, Rozetka, Prom, or Kasta, where thousands of sellers list their products. The plus is that the platform already has an audience — you don’t need to find it. The minus is high competition, commissions, and dependence on the platform’s rules.
Social media. Instagram, Facebook, TikTok have long turned from messengers into storefronts. Many micro-businesses don’t have a website at all — just an Instagram account and a Telegram bot for taking orders. It works, especially in niches where visuals matter: clothing, jewelry, food, handmade goods.
Single-product landing page. A one-page website designed to sell a single product. This format is often used for testing hypotheses and for sales through paid traffic.
Mobile app. A proprietary app is an expensive pleasure, but major players can’t do without one. An app retains customers and allows sending push notifications directly.
Advice for starters: if your budget is limited, don’t try to boil the ocean right away. Choose one channel where your audience hangs out and perfect it. Spreading yourself across five platforms is the most common mistake beginners make in e-Commerce.
What goes on behind the scenes of e-commerce?
The storefront is just the tip of the iceberg. Underwater lies a multitude of processes that the customer doesn’t see but without which the store doesn’t function.
Payments
Payment systems take money from the customer and transfer it to the seller. In Ukraine, the main players are LiqPay (from PrivatBank), WayForPay, Fondy, Portmone, Monopay. They charge a commission (usually 1.5–3% of the amount) but handle all the technical aspects: security, 3D Secure, refunds, and integration with banks. Cash on delivery via Nova Poshta also remains popular — especially among audiences who don’t like paying upfront.
Logistics and delivery
Logistics is everything that happens to the product from the seller’s warehouse to the buyer’s hands. In Ukraine, 80% of online purchases are delivered via Nova Poshta, with the rest split between Ukrposhta, Meest, and courier services. Delivery time and cost are often more important than the product price: if the customer sees “delivery tomorrow to a branch for 60 UAH,” they will order. But if they see “delivery in two weeks for 250 UAH,” they’ll go to a competitor.
Fulfillment
Fulfillment is a service where a specialized operator takes over the entire warehouse, packing, and shipping of orders. The seller brings goods to the fulfillment company’s warehouse, and then the company handles everything: receives the order from the online store, packs it, and hands it over to the delivery service. This is especially convenient for those who sell on multiple marketplaces and don’t want to maintain their own warehouse. In Ukraine, such services are offered, for example, by Nova Poshta Fulfillment.
Dropshipping
Dropshipping is a model where the seller doesn’t keep any stock themselves. They receive an order, pass it to the supplier, and the supplier ships the parcel directly to the customer. The seller earns from the price difference. The plus is minimal upfront investment: no need to purchase goods, rent a warehouse, or worry about stock. The minus is that margins are usually small, and the supplier — who is beyond your control — is responsible for quality and delivery times.
CRM and analytics
CRM is a system that collects information about all customers, their orders, calls, and support inquiries. Without it, you might manage with a couple of hundred orders per month, but beyond that, chaos sets in: who ordered what, what was promised to whom, who is dissatisfied with what. Popular solutions among Ukrainian retailers: KeyCRM, Perfectum, retailCRM, SalesDrive.
Analytics helps understand where customers come from, how much it costs to acquire one buyer, which products sell better, and where the store is losing money. The minimum essential toolkit: Google Analytics, Google Tag Manager, Facebook Pixel.
Key metrics: what is measured in e-Commerce
For e-commerce to be profitable, it must be measured. Otherwise, you are working blindly and making decisions based on intuition. Here are the metrics that any online store owner looks at first:
Conversion rate — the percentage of visitors who made a purchase. The average conversion rate in Ukrainian e-com is around 1–3%, but in niche stores it can be 5–7%.
Average order value — the amount a customer typically spends per order. It can (and should) be increased through upsells, bundles, and free shipping above a certain amount.
CAC (Customer Acquisition Cost) — how much the store spent on advertising to acquire one customer.
LTV (Lifetime Value) — how much money a customer brings over the entire time they buy from you. If LTV is significantly higher than CAC, the business is healthy.
Cart abandonment rate — how many people added a product and left without completing an order. A good reason to think about what’s wrong with the checkout process.
Return rate — how many products customers return. A high return rate is a signal that product descriptions don’t match reality.
Real-life example. Let’s say you launched a home accessories store. In a month, you got 5,000 visitors, 75 orders, and an average order value of 800 UAH. That gives a 1.5% conversion rate and revenue of 60,000 UAH. If you spent 20,000 UAH on advertising, the CAC is 267 UAH. From there, you can think about how to raise the conversion rate to 2%, how to increase the average order value by 100 UAH, and how to get customers to come back for a second order. Without numbers, these discussions turn into guesswork.
How to start your own e-Commerce business?
Let’s say you’ve decided: I want my own online store. Where do you start? Honestly, not with the website. The website is a tool — you need to start with simpler and clearer questions.
Step 1: decide what to sell
This is the most important decision at the start. The niche should be, first, personally interesting to you (otherwise you’ll quickly get bored), second, in demand, and third, not overcrowded with market “sharks.” Google Trends, services like Serpstat, Ahrefs, and marketplace analysis (what’s selling at the top on Rozetka, what’s missing on Prom) help with niche selection.
Step 2: research competitors
Open 10 stores that sell similar products and go through each customer journey: look at prices, assortment, photos, texts, delivery terms, and response times in messengers. You’ll quickly see what they do well and where they have gaps you can exploit.
Step 3: find suppliers
Options: buy wholesale and keep stock, work via dropshipping, or manufacture yourself. Each option has its pros — for beginners, it’s often easier to start with dropshipping and move to your own warehouse once stable sales kick in.
Step 4: choose a platform
Your own website on Shopify, Horoshop, Prom.ua, or OpenCart? A store on Rozetka? An Instagram account? The decision depends on the niche and budget. You can start with social media and a marketplace, then add your own site later.
Step 5: set up payments and delivery
Arrange with a payment provider (LiqPay, WayForPay), sign a contract with Nova Poshta or other services. Think about packaging — it’s also part of the customer experience.
Step 6: set up advertising
At the start, the most effective channels are targeted ads on Instagram and Facebook, Google Ads, and SEO (slow, but provides free traffic in the long run). Budget for at least two to three months of testing: the first ads rarely hit the mark right away.
Step 7: analyze and refine
After the first orders, look at the numbers, talk to customers, read reviews. It’s at this stage that ideas are born which later distinguish a good store from a mediocre one.
Important: don’t try to make everything perfect before launch. A perfect store that no one sees loses to an average store that already has customers walking in. Launch with a minimum viable version and improve as you go.
E-commerce trends worth knowing about
The field changes quickly, and what worked a couple of years ago may no longer bring results today. Here are several directions worth watching:
Mobile commerce. More than half of purchases in Ukraine are already made from smartphones. If your site is inconvenient to browse one-handed on the go — you’re losing half your customers.
Social commerce. Purchases directly from the Instagram and TikTok feed without going to a website. Works especially well in fashion and beauty niches.
Voice purchases and AI assistants. For now, this is more of a story for the US and Western Europe, but the trend is coming our way too. Chatbots with neural networks can already advise customers almost like a live manager.
Subscription models. Instead of a one-time sale — a monthly subscription for coffee, dog food, or cosmetics. For businesses, this means predictable revenue; for the customer, convenience.
Sustainability and transparency. Buyers are increasingly paying attention to what a product is made of, where it came from, and how it’s packaged. Brands that can honestly communicate about this earn loyalty.
AR try-ons. Trying on sneakers through a smartphone camera or seeing how a sofa will look in your living room is no longer science fiction. IKEA and Zara have been using this in their apps for a while.
E-commerce continues to grow even where it seemed there was no room left to grow. New niches appear almost every quarter, and buyer behavior changes along with technology. The good news is that the barrier to entry remains low — and there is still plenty of room for new players with interesting ideas and a willingness to learn.
