If you’ve ever wondered about the History of E-Commerce like how it began, why it began, and what’s the growth potential like, then this article is for you. Here, we’ll talk about the history along with key takeaways you can apply.
This article is a part of the series “The History of the Internet”. I think this series can be extremely inspirational to you. The internet has completely changed the last few decades of humankind, but didn’t start that way
As the internet is growing in influence, people want to know where the phenomenon came from, and this series answers that question. You can read the entire series by going HERE. Please read to the bottom and get all the AMAZING FREE STUFF at the end!
Just a few decades ago, people living in suburban areas had much less retail choices than people living in high traffic city areas. When items were ordered, the average wait time to receive the package was more than one week, and sometimes more than one month.
Starting a retail business required thousands of dollars in capital for inventory, and many other pieces had to be planned and organized.
The good thing about all of these dilemmas is that for many people, these problems are now a mere part of the history of shopping since e-commerce has arrived on the scene, and created so many advancements in the way we shop and access our purchases.
If you were looking for an article to explore the history of e-commerce, you are in the correct place because we’ll go back in time to compare how things were, then discuss the advancements, and end with how this all applies to you.
- 1 How it All Started…
- 2 Let’s Put Ourselves Into the Shoes of Entrepreneurs A Few Millennia Ago
- 3 Major Milestones in Business Convenience Leading to E-Commerce
- 4 10 Mind-Blowing Facts About The History of E-Commerce
- 5 How Did Amazon and E-Bay Gain So Much E-Commerce Market Share?
- 6 A Playlist on The History of E-Commerce
- 7 What Does The History of E-Commerce Have to do with You?
- 8 Final Words on The History of E-Commerce
- 9 Now, it’s Your Turn…
How it All Started…
Trade has historically been a human activity from the early BC days. No one person can make and do everything, so trade has enabled people groups to help one another by augmenting skills for the better of the whole.
Prior to the transportation advancements like the wheel, animal-drawn vehicles, steam locomotive, airplane, the paved road, or the car, national and international trade was a much more complicated and time-intensive process.
At one point, trails paved by human usage were a primary source of travel and animal-drawn wheeled carriers were the trending land vehicles. Therefore, if you wanted something that was created in another location, you needed an extended amount of travel time or the money to pay someone else to transport the item to you.
Also, since the communication wasn’t as effective, many opportunities were missed simply because there was no means to communicate that the solution existed.
Take for example, you live in the US and a new technology is created in China. Now, someone in China can upload information about the new technology online, and by way of good copywriting and good internet marketing skill, they can broadcast the information across the world in minutes.
A few decades ago, however, the new technology would take years, decades, or millennia to discover–contingent on the budget to afford the manual process of carrying the information across the world.
Let’s Put Ourselves Into the Shoes of Entrepreneurs A Few Millennia Ago
Can you imagine the risk the entrepreneurs had to undertake in the 1700s or before? Let’s put ourselves in their shoes for a second…
You create a groundbreaking solution that you know will serve a market across the world very effectively. If you have the money to transmit the message that the solution exists, it will probably take one year or more (with the state of the shipping knowledge and mapmaking advancements of the time) simply to get the message to the other side of the globe, and it may not reliably get there.
Remember “new lands” were still being discovered, so navigation and transportation was still being advanced for thousands of years in human history.
Once the message finally reached the other side of the globe, the condition of the message could be altered considerably. On top of the potential distortion of the original message (after one year of travel), you have to trust the carrier largely to pass the message to whoever could sell the product.
How many people would have been willing to bear the risk to pay for the extensive transmission of marketing information globally?
The percentages of local vendors was much higher and worldwide distribution much much lower than is possible today. There wasn’t as much access to solutions, information, products or services as we have now. Now, the learning curve and access to growth potential is expedited by decades and even generations in comparison to what it was. Things that are possible to accomplish within one lifetime (like traveling the world) are feasible goals that weren’t accessible to generations before us.
While wealth still opens doors, there is much more accessibility to goods from all across the world than there has ever been in history. After movable type (with the invention of the printing press) ignited a fire of passion and increased the speed of information transmission, ideas have been passed much faster. Fast forward from the 1600s going forward, and advancements have happened much faster, which has paved the way for the e-commerce experience we have today.
Major Contributing Milestones from Before the 1700s…
- The Egyptians, Israelis, and Phoenicians begin to use ships much more for commercial trade and world exploration (3rd-4th century BCE)
- In the second century AD, Ptolemy invented Geography
- The printing press was invented by Johannes Gutenberg in 1438
- By the 16th century, Maps are common for use and people can navigate across the world
- Sailing the oceans became much more efficient so smaller crews and less provisions could cross the oceans
- Several historic land discoveries are made in the 17th century
- Regular trade routes were established to take goods across the oceans in the 17th century
- Major profits (sometimes upwards of 100%) come from the early oceanic trade (17-18th centuries)
- The steam engine is advanced to support motion vehicles (1765)
- In the US, Benjamin Franklin created a consistent route and cost for mail to be carried between colonies (1775)
- US became independent of Brittain (1776)
- Innovation increases as colonists settle in the Americas and patents are inexpensive to acquire
- By the 1800s, steam engines were powering mills, factories, breweries and a host of other manufacturing operations.
The 1800s to Today…
- The first US railroad was opened in the in 1830
- The phone was created (1876)
- The first US patent for the invention of the bicycle is granted (1866)
- The car is invented in the late 1800s
- In the early 1900s, the assembly line makes vehicle production fast
- Electronic television was invented (1927)
- ARPANET begins the foundation of modern-day internet (1960s)
- The electronic mail system (email) was created (1982)
- Search engines make finding information much simpler (late 90s-present)
- Airplanes are invented and become reliable
- International shipping by air and by water is advanced
- The first online purchase takes place in 1994
- Social media improved communication and social sharing (1900s-present)
- EBay and Amazon advance e-commerce (1990s-present)
Now, transactions–from checkout to delivery–can happen within less than one week, more than $83 billion is spent in transactions online, and the trend is growing substantially!
Major Milestones in Business Convenience Leading to E-Commerce
The first recorded direct mail advertisement is on papyrus and is dated as 3000 years old! Written sales has been conducted for a very long time, however, stone tablets, papyrus, and clay were the means of creating them.
When the printing press was invented in 1439, it opened the way for wider and quicker distribution of information (including information about products and services).
Even before the independence of the US colonies, direct mail was used for door to door campaigns, to communicate research, religious, and political information, and to promote products and services.
Now, with the rise of the internet, and the lower costs of online advertising, direct mail advertising and mail order purchases are becoming less popular, but still have some relevance.
The phone was invented in 1876. It was a major advancement in human communication. As a result, the pursuit of one person providing a product or service solution by phone was undoubtedly going to take place. Mail order was said to have started in the 1400s, but the process became more convenient in the late 1800’s when consumers could call the companies for product and service orders.
Then, in 1927, electronic television was invented! Now, messages could be communicated visually rather than simply audibly or in print form. People can see images in motion.
The television became a powerful source of advertising and sales. Now, consumers could pick up their phones, and call to place an order for something they saw on the television seconds prior.
Internet for Commercial Use – Late 1980’s and Early 1990’s
In the late 1980s, government bans began being lifted to allow personal and commercial use of the internet. With the internet being open for commercial use, many people and businesses flocked to it to learn and explore how to use it effectively as an alternative communication channel. You can check out my article on the History of the Internet here for more information on how it started and grew into the world-changing resource center it is today.
10 Mind-Blowing Facts About The History of E-Commerce
- By the end of 2001, the largest form of ecommerce, Business-to-Business (B2B) model, had around $700 billion in transactions. (Source:Ecommerce-Land)
- Online shopping is an alternative to physical, mail order, television, and telephone shopping, which were available prior.
- E-commerce has many benefits for the consumer and retailers over physical, mail order, television, and telephone shopping.
- The internet makes it easy for consumers to make unique retail discoveries
- By 2007, online shopping accounted for 3.4% of total sales. (Source: Ecommerce-Land)
- Amazon is one of the first ecommerce businesses to establish an affiliate marketing program, and nowadays the company gets about 40% of its sales from affiliates and third party sellers who list and sell goods on the web site.
- Launched in 1994 as a static page, Dell.com has made rapid strides, and by the end of 1997 was the first company to record a million dollars in online sales.
- In 2007, Fortune magazine ranked Dell as the 34th-largest company in the Fortune 500 list and 8th on its annual Top 20 list of the most successful and admired companies in the USA, and 50% of their sales come from online!
- In fact, more than 10 percent of all retail transactions in the United States were attributed to e-commerce in 2015, with sales totaling more than $300 billion. That’s a growth rate of 14.6 percent from the previous year.
- On August 11, 1994, The New York Times reported that a man named Phil Brandenberger from Philadelphia purchased a Sting album from his computer.
When you say you want to start or grow an online business, there is still alot of skepticism and mystery surrounding that, so how did some of those in the forefront help create an industry that has over $83 billion in sales? Let’s take a look at two of the largest online retailers and their founders for insight…
Jeff Bezos was an “ordinary guy”. He had an “ordinary” suburban childhood and grew up to get a job building on his interest in engineering. So, you’re probably wondering, “How did he cross over from being an “ordinary guy” into being a self-made billionaire, the richest man in the world, and the first in history to cross the 100 billion net worth within less than 30 years?
The answer is e-commerce.
In 1994, Jeff Bezos had the idea to take his curiosity and interest of the internet, and use it for commerce. He wasn’t the first to make a sale online, but the first sale was made just one year prior.
With expediency, he quit his cushy job, and moved he and his wife to a downgraded lifestyle in Seattle, Washington to experiment with the idea of starting an e-commerce business. When asked, “What made you quit your good job to experiment with the idea of starting a business?” He said he thought about what he would regret more: trying to start the business and possibly failing, or omitting the idea altogether, and he didn’t want to grow old with the regret of never trying his business idea so he went for it.
Originally, Bezos started a bookstore. He started out laser focused on creating a good user experience as a book retailer, then he took the success from that, and scaled it into what we call “Amazon” today.
He took advantage of being an early adopter online and in the e-commerce space, and aggressively expanded Amazon as funding would allow; making growth decisions that left them unprofitable for almost the first 10 years! Now, Bezos has passed Bill Gates as the richest man in the world! After many naysayers and many unhappy investors, Amazon has become one of the largest and fastest growing companies in the world, and a HUGE contribution to the evolution of e-commerce.
Similar to Bezos, Pierre Omidyar was living a fairly average lifestyle. He was innocently curious about computers, and pursued knowledge about them as a passion. From an early age, he began writing computer programs–starting as a teenager, but didn’t make money from his skill until his early adulthood.
His first profitable project was writing a computer software for e-commerce called e-shop which was bought by Microsoft in 1991. From there, Pierre had given up on entrepreneurship (in a sense), and decided to get a job working at General Magic as a relations engineer, but when his fiancee struggled to collect Pez dispensers, he decided to create eBay (an online auction site) as a solution for her.
Rather than eBay simply being a solution to buy and sell Pez dispensers, many people flocked to it to upload household items and auction them off, and eBay became almost instantly profitable.
Now, as a result of the contributions of Amazon and Ebay, the internet has grown as a trusted place for consumers to buy and sell goods, and to even auction used items.
A Playlist on The History of E-Commerce
Here’s a playlist that shows more about the history of e-commerce, Jeff Bezos, and Pierre Omidyar. This playlist will help you get more clarity about the background of e-commerce.
What Does The History of E-Commerce Have to do with You?
The E-Commerce Platform is Growing Fast
The e-commerce platform continually grows with higher and higher projected sales from online shopping. A huge shift is expected as the generations following the millennials participate more in the consumer market at the highest expected rates of online sales. If you haven’t taken your business online, it will become increasingly more competition leveraging the worldwide market, and making it more difficult for local businesses to thrive by offline methods alone.
Younger People are Uploading Content Aggressively
Younger people who have grown up with social media, search engines, and blogging will be more accustom to interacting online and uploading content for online use. If you don’t have a content marketing strategy (even an aggressive one), you can become “lost” in the online space as more youthful users begin taking over the internet space.
More countries will get the opportunity to have more convenient shopping experiences as the internet grows, which offers early adopters amazing business opportunities. They may be able to leverage teaching, and create competitive advantages in the e-commerce market simply by having a more established platform.
You Have The Chance to Hit The Ground Running as an Early Adopter
While many of the young, internet savvy children are still “being kids”, it’s important to build your business, so you can be a part of this growing platform that will increase from $83 Billion in sales and go up!
Final Words on The History of E-Commerce
The goal of this article was to show the history of e-commerce: from the primitive manufacturing up until the present. If you have questions or concerns about this, don’t hesistate to leave them in the comments section. I’d love to help you out!
If you are ready to participate in the early adopter crowd–using the internet to get your idea or business to solve problems for more people, I’d love to help you out! You can CREATE A FREE ACCOUNT HERE. No credit card required, ever.
You’ll get two FREE websites, 10 FREE training lessons on how to set the websites up and get started (or advance) in your online business, access to millions of entrepreneurs who are leveraging the internet (some are seeing major successes!), and I’ll be available to answer any questions you may have. CREATE YOUR FREE ACCOUNT HERE, and I’ll meet you there.
Now, it’s Your Turn…
Now, that you have more background on the history of e-commerce, where do you see it going in the future? Do you agree with my assessment that future generations will create more online sales and more online use? Why or why not? Do you know additional information about the history of e-commerce? Leave your comments, questions, and feedback below.