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Basic Ecommerce Terms for Ecommerce Entrepreneurs – 2

In the previous post, you have read some of basic ecommerce concepts and now it is time to continue mentioning about other ecommerce concepts which each ecommerxce entrepreneur should learn and apply for a successful online business. Here are explanations for the terms of Due Diligence, Conversion Rate, Business Valuation, CRM (Customer Relationship Management), Affiliate, Joint Venture, and Scalability.

Due Diligence

This term refers to market research and analysis of an organization or an individual done in preparation for a business transaction. The aim is basically to make a right investment by finding right project, business idea and entrepreneur. Due diligence is performed in different sectors regarding different dynamics. It is also a method for evaluation of risks and advantages of an entrepreneur’s current and potential business plans.

Conversion Rate

A conversion rate is calculated based on the number of unique visitors turned into customers, subscribers and users divided by the number of total unique visitors. This method is generally used by online advertisers and marketers and helps site owner to see website traffic results. Some factors such as website traffic, site membership and purchasing are to be considered for calculation of conversion rate.

Business Valuation

Business valuation comprises of procedures used to evaluate total market value of a company. This valuation may be helpful to provide a clear viewpoint for corporation sales and investments. Staff, profitability and market analyses of a corporate are taken into account in the process of valuation.

CRM (Customer Relationship Management)

The concept of CRM means interaction that a business owner has with its customer, whether it is sales or service-related. We have various software, which records this process upon permission of customers and use them to build future sale and marketing strategies in a more effective way. Companies with professional CRM software have more chance to increase their profitability and sales.


The terms of affiliates refer to the support given to a website by another website in terms of sale and marketing strategies. In a sale partnership, advertisers pay a commission to an affiliate company or individual per redirection and action with the aim of marketing their products and services. Sale partnership can be managed via various channels such as placing banners in the website, sharing links in social media, showing the products in site content.

Joint Venture

It is a kind of partnership by joining together of two or more business entities or individuals on varied share earnings for any entrepreneurship, investment process or project. For example, the partnership which is built between two companies from different sectors to get down to a new business sector is a kind of joint venture. It differs from business partnership or consortium since parties found a company instead of founding an ordinary partnership.


This term refers to the ability to measure services provided in parallel with increase in the sources of any project.


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