What is Ghost Commerce? Understanding All About Ghost Commerce

What is Ghost Commerce? Understanding All About Ghost Commerce

By Softpulse Infotech, May 30th, 2024

Evolution is not a one-time event. New words and terms are coined every day. Ghost Commerce is just another term for gaining attraction.

What is Ghost Commerce? Understanding All About Ghost Commerce


With the progressively fast growth of the digital network, there is a continuous chain of constant emergence of new trends and business models, every single one being highly fascinating and encouraging that it could remodel the online business process.

One such concept that came into existence over the period of the last few years is ‘Ghost Commerce. Though this term might come along with some intuition about captivation and obscurity, its meaning differs. Ghost eCommerce is concerned with the unknown aspects and represents the new and exciting transformations it has brought to the traditional business model.

What Exactly is Ghost Commerce?

‘Phantom Commerce is an expression that is also referred to while talking about ghost commerce. Dropshipping is the category under which ghost commerce can be classified, but it is much more automated and streamlined. This business model involves three parties: the buyer, the seller, and the marketplace. In such a scenario, the entrepreneurs sell the product without being the direct retainer of the amenities, but instead, a third party is responsible for it. This third party manages and fulfills orders, as well as stocks and conserves inventories.

Earlier, entrepreneurs usually acquired their goods and materials in large quantities from the manufacturers, thereafter transferring them to the stockroom. Moreover, the traditional system also involved packaging, handling, and shipping the product to the consumers directly.

Ghost shopping-buying, that is, ghost commerce, is a phenomenon wherein the entire medium is on a digital platform as the consumers shop the product online without face-to-face interaction with the person or the website.

Example Scenario

Let’s understand this using an example:

This scenario involves a buyer, a seller, and the third person, who is the trader. In this situation, there is an online business set up by the seller, let’s say, for printed t-shirts. Now, when the buyer places an order, the seller would directly give that order along with other necessary details regarding the shipping address and product to the trader, who would then directly ship the order to the consumer. In this way, the buyer is not directly involved with the vendor yet receives the product.

In this scenario:

1. There is an online store that displays printed t-shirts.

2. The shopper would shop from this website by placing an order.

3. This order is then passed on to the trader, who looks after the packaging and shipping of the product.

4. A dropshipping partner is hired to fulfil the order.

5. The order is then shipped and received by the customer.

Key Features of Ghost Commerce

1. Zero Stock:

Ghost commerce is one such industry wherein businesses do not have a storage for inventories. Thus, the capital needed to set up and maintain the business is significantly lower.

2. Outsourced services:

The sellers or those who own the business are completely focused on the advertisement and marketing of their products solely. The inventories and order fulfillment are taken care of by the third party who are the traders or the suppliers.

3. Systematization:

The entire process of ghost eCommerce is extremely systematic, with as little human interaction as possible. Right from the beginning, everything was managed at the maximum level by the digital landscape, which made it easier to manage a large-scale operation.

4. Elasticity:

One of the key features of this business model is its adaptability. It allows the business to become accustomed to new market trends.

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Can You Make Money with Ghost Commerce?

The answer to this is a simple yes. However, with a simple answer comes a few critical points that need to be kept in mind while dealing with ghost commerce. Below given are some key factors.

Market Niche

Any business works wonders if only a niche selection for market focus exists. Business needs to identify the target audience based on the convergence of the business products and the user’s preferences and choices. If the target audience matches the content of the business and its needs then that would be the correct audience, that is the selection of niche would be perfect and well-defined. A niche that has profit must have less rivalry in the market and sufficient consumer demand. Before selecting a viable audience, the business must thoroughly research and understand the ongoing market trends and consumer preferences.

Supplier Relationships

The business needs to be in equilibrium with the traders, who would be the sole holders of the inventories. Trustworthiness and the essence between the supplier and the seller are the keys to making or breaking the relationship. Those suppliers who would supply high-quality products that are unique and can maintain the same consistency over several years should be selected.

Marketing Strategies

Advertisement is another key aspect that helps a business skyrocket. Effective marketing is a must to attract and retain customers. To attract more traffic, the social media handle should be interactive enough to give consumers an idea of what is happening in the market. To make one’s brand identity unique and set apart from other businesses, there should be proper customer management and maintenance of public relations.

Automation Tools

The company can adopt automation tools to improve sustainability and narrow down the operation. Such tools can handle the digital landscape and should be used more efficiently so that order processing and inventory management are easy.

Buyers Experience

Just like any other organization, even in ghost eCommerce, customer satisfaction is at the forefront. An attractive and user-friendly website, smooth processing of orders, and product satisfaction should be ensured by the business owners. By acknowledging customer feedback and suggestions and making sure to provide an efficient service, the business should focus on developing and maintaining long-term customers.

Legality of Ghost Ecommerce

Though ghost commerce is not illegal, businesses should be confined to operating within the context of ethical and legal conduct.

The business laws should be designed to abide by the country’s consumer protection law. One should refrain from falling into the radar of cheating the business and the buyers by being transparent and clear about the amenities involved in the business.

Businesses should refrain from trading in products whose suppliers aren’t authentic. Instead, they should engage in businesses wherein they own the copyright over the product.

Different countries have different laws for tax payment in the consumer-seller market. These laws should be kept in mind and discussed with a tax professional.

If one organization is trading their product overseas, the import and export regulations should be thoroughly recognized. The sellers should be aware of shipping time and expense.

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What is the Average Income for Ghost Commerce?

The revenue that comes from ghost e-businesses can be a task to maintain stability. Based on the below-given points, the income and revenue of the business should be finely understood:

Revenue Potential

A loyal consumer base can help identify the business’s significant revenue. Moreover, if the company has prompt and efficient marketing, then there can be a strong monthly revenue.

Profit Margins

One of the most altering and fluctuating points in eCommerce is the profit margin. It is typically not more than a quarter of the amount as it highly depends on the cost of the product and other expenses around it. If the cost and management of the product are appropriately done, then businesses can earn a high-profit margin.

Scaling Potential

Ghost eCommerce can easily help a business grow and expand because of the vastness it has to offer both consumers and producers. As time passes, the company can help target new audiences and generate more business ideas.

Process of selling a product on a Ghost Website.

1. Platform Selection: Popular platforms should be considered, and the correct platform should be chosen to outshine the business.

2. Resourceful Traders: A partnership with reliable suppliers can help meet the desired business result.

3. Build Your Online Store: An effective and visually appealing digital store should be set up. Such a digital platform should consist of a user-friendly base that facilitates product navigation and ordering.

4. Implement Automation: A digital platform should have an automation system that helps improve sellers’ efficiency and consumers’ satisfaction.

5. Marketing Strategy: A marketing strategy that attracts more visitors should be implemented to attract a larger audience and, thereby, increase sales.

6. Focus on Customer Service: If a business excels in providing effective customer service, it helps bring loyal customers to the organization.

7. Monitor: The business and its profit and sales should be properly monitored, and expenses should be monitored so that the business can be optimized properly.

Challenges and Risks in Ghost Commerce

Supplier Reliability

Traders who are chosen for the business should be researched thoroughly. This is one of the primary challenges for the industry on which the entire business relies.

Inventory Management

There is less human interaction involved, which makes ghost eCommerce entirely automated. Thus, inventory management should be efficient.


With the more widespread use of digital platforms, there is an increase in eCommerce competition. This makes it essential for the business to stick to developing unique products and introduce exciting upgrades according to the market.


With the emergence of new trends in the business market, eCommerce is an entirely different and vast platform. It is a highly exciting business world to venture into for both consumers and producers, as well as sellers.

Though it can have some disadvantages, it’s still a highly profitable market, as people today are starting to earn money rather than work hard. By keeping up with the customer’s needs and services and by hosting products that help increase the business’s profit, ghost eCommerce can be highly effective and can sustain itself in the market for the long run.

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