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Ecommerce APIs: The What the Why and the How to Make Money


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Why are APIs so important to ecommerce today?

APIs, or Application Programming Interfaces, are designed to enable one application (such as your ecommerce platform) to expose services (like order management, pricing information, catalog content, customer profile data) to other applications. In a sense, the API helps systems “talk” to each other.

While APIs are widely used outside of ecommerce (e.g. free Facebook apps built upon the f8 platform), their use in ecommerce is growing and are particularly useful for bringing transactional capabilities to any consumer touchpoint – mobile, social, in-store, connected devices, et cetera, as well as internal applications for use by the business.

Tesco’s famous Homeplus shop-from-the-tube experience in Korea is an example of an internal use of API.

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Another example is Sears’ interactive baby catalog:

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BestBuy mixed its API with Wolfram Alpha and Siri to create a voice-searchable application

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API as a Product

Some ecommerce businesses aim to monetize their content and services by offering public or semi-public APIs. A variety of API business models exist, ranging from direct to indirect monetization. For example, Amazon Web Services is a cloud computing product where you pay only for the service you need. PayPal offers a Direct Payment API for merchants that don’t want to send customers to a PayPal branded interface.

Pearson Education offers a variety of APIs for developers to tap into its legacy content like the Longman Dictionary, DK Eyewitness Guides and Kitchen Manager. Developers pay based on consumption (direct monetization).

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One neato application built with the Kitchen Manager API

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Netflix opens its API for free to d developers to develop unique experiences for different devices, and makes money off subscription revenue driven through these apps (indirect monetization).

Adopting an API strategy

In our recent webinar with SOA Software, Sachin Agarwal shares 4 pillars for adopting an API strategy.

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Accelerate – make your product and services available through APIs

Drive API adoption – partners, large set of developers, market it, support it, hackathons, documentation and onboarding etc. design it as a product and market it

Monetize – may not be direct, may be indirect. Twitter/Twilio charge every time you use, Netflix APIs are free, indirectly through getting subscriptions

Most important – Analyzing your APIs – lot of information about how partners and developers are interacting with your business – where accessing, what, what kind of services, how, when etc

For more technical information on API strategies for ecommerce, including security, API licensing, quota management, performance and reporting, scaling your API and marketing to developers, check out our webinar on-demand: How to Get Your Business Selling in the API Economy

Reprinted with permission.Ecommerce APIs_image5_KS

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About the author: Linda Bustos

As Director of Ecommerce Research at Elastic Path, Linda Bustos works with some of the world’s largest companies to help improve conversion rates and profitability on the Web. In addition to writing the Get Elastic blog since 2007, Linda’s articles have appeared in Mobile Marketer, CMO Magazine, E-Marketing + Commerce, and Search Marketing Standard. She is a frequent speaker at industry events, including XCommerce, Conversion Conference, and Affiliate Management Days.

In 2010, Linda earned a spot on the DMNews Top 30 Direct Marketers Under 30 list. She has served as faculty for the Banff New Media Institute’s Career Accelerator Program and Marketing Profs University, and has appeared as one of the Top 100 Influential Marketers of the year in 2008 and 2009. Prior to joining Elastic Path, Linda worked agency-side, specializing in usability and SEO.

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