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e-Commerce API 101: Definition, Types, Benefits & Examples

e-Commerce API 101: Definition, Types, Benefits & Examples

API, short for application programming interface, is a set of definitions and protocols that enable data transmission between software programs. In this article, we’ll discuss what e-commerce API is, types, examples and advantages of APIs for e-commerce, letting you get a grasp on these powerful tools that will benefit your online business in previously unimagined ways.
Written and published by
Brian Tsang

If power adapters are travel essentials, then APIs are must-haves in the tech stack of your e-commerce company. But what exactly are e-commerce APIs, and why should you use them?

In this article, we’ll deep dive into the topic of e-commerce API, covering what it is, types, examples and benefits of APIs for e-commerce. Ready to explore the world of APIs and add new capabilities to your online business? Let’s get started!

  • What is an e-commerce API?
  • Types of APIs
  • Role of APIs in modern enterprises
  • Benefits of APIs for e-commerce
  • e-Commerce API examples
  • Some last words

What is an e-commerce API?

API is an acronym for application programming interface.

Simply put, APIs help different software “talk” to each other. In more technical terms, API is a set of definitions and protocols that enable data transmission between software programs.

In the same vein, e-commerce APIs help applications inside and outside of an e-commerce platform communicate with one another. They’re particularly important in a headless commerce architecture as they connect the front- and back-ends of an e-commerce site.

Illustration of the role of APIs in a headless commerce architecture
Source:
Elastic Path

Types of APIs

Broadly speaking, APIs can be divided into three types: public, partner and private. This section elaborates on each of them.

1. Public APIs

Also known as open APIs, public APIs are available for use by any developer outside of an organization.

Some public APIs are free to use, whereas others require a subscription fee. Fees are usually charged on a pay-as-you-go basis, with the amount calculated based on the number of calls made to the API.

2. Partner APIs

Partner APIs are offered only to a company’s partners. They are typically used by strategic business partners or authorized clients for data sharing.

For example, Shopline’s enterprise clients can use the e-commerce platform’s API to connect to SleekFlow, an omnichannel messaging platform. This would allow users to automate the sending of messages to customers based on pre-set triggers, such as order confirmation, delivery status updates, etc.

3. Private APIs

Private APIs are also known as internal APIs. Typically, private APIs are developed by companies to establish connections between different systems or products of theirs.

An example of private APIs at work is the integration of QuickBooks’s accounting software with its inventory management software. The private APIs are used only within the company to achieve a specific goal, and aren’t available for outside developers.

Role of APIs in modern enterprises

A tech-enabled e-commerce company has many software programs in place. At the heart of this ecosystem are APIs which connect different systems, enabling them to communicate with one another, hence exposing usable data to users.

Against this backdrop, MuleSoft, an API platform owned by Salesforce, advocates an API-led approach to connectivity within modern enterprises. Under this methodology, APIs are grouped into three categories and have different roles:

  1. System APIs
  2. Process APIs
  3. Experience APIs

Source: MuleSoft

1. System APIs

The core function of system APIs is unlocking data from your company’s systems of record.

To illustrate this, customer relationship management (CRM) and enterprise resource planning (ERP) systems often have proprietary and complex interfaces. By building system APIs to connect with these software and extracting data from them, users can easily access and use data from these databases without learning to navigate the underlying systems.

2. Process APIs

Process APIs are used to integrate different systems in an IT ecosystem. An example is the process of e-commerce order fulfillment.

When fulfilling a customer order, various domains of your company’s IT ecosystem need to be engaged, such as the inventory and order management systems. The process API would interact with the systems APIs of different databases (i.e. inventory and order), combining data from these sources to enable the order fulfillment process.

3. Experience APIs

Experience APIs help deliver specific user experiences. More specifically, APIs of this type reconfigure data and present them in a format that is most easily consumed by the intended audience.

For example, the orders API (which is a process API) has exposed data of customer orders in JSON format. However, the marketing team of your company wants to feed this data into an application software that only accepts data in XML or CSV format. In this scenario, an experience API will transform and present the data in the desired form.

Benefits of APIs for e-commerce

“Why should I use APIs for my e-commerce business?” Some people may ask.

In short, having APIs in your tech stack is helpful for integrating your platform with solutions that are immensely beneficial to business growth and success. Here are four benefits of APIs for e-commerce explained:

  1. Agility
  2. Connectivity
  3. Reusability
  4. Scalability

1. Agility

E-commerce businesses need to stay agile to succeed in a highly dynamic environment, and  APIs are key to organizational agility.

For example, numerous new methods of payment emerge as the payments landscape evolves. In Southeast Asia alone, more than 150 digital wallet licenses have been issued to date. Instead of developing dedicated gateways for each payment option, a payment API would empower digital merchants to process online payments at their stores easily and seamlessly.

2. Connectivity

In this day and age, there’s no shortage of data available to businesses. The difficulty, however, lies in access and exchange of data across different software applications, and APIs can help you overcome this challenge.

Whether it’s the sharing of data between the order and inventory management software, or the construction of a holistic view of your customers, APIs can bridge the gap between systems and offer instant connectivity, opening up new possibilities for how data can be used.

3. Reusability

Designed with a service-oriented approach, the same API can be used across different systems and applications. This means you can always leverage prebuilt APIs instead of spending time to build new ones.

In this respect, the benefits of APIs come in the form of cost and time savings, as you don’t have to hire developers to design self-contained or proprietary solutions, the process of which is often expensive and time-consuming.

4. Scalability

APIs add extra functionality to your e-commerce ecosystem without changing your existing software, systems or programs. Streamlining workflow and scaling your e-commerce business therefore become faster and easier.

e-Commerce API examples

From order management to payment and marketing, there are many aspects in which APIs can be applied in an online shop. Below are 9 examples of APIs for e-commerce:

  1. Authentication API
  2. Catalog API
  3. Inventory API
  4. Marketing API
  5. Orders API
  6. Payment API
  7. Product information API
  8. Shipping API
  9. Verification API

1. Authentication API

Sometimes known as login API, an authentication API verifies the identity of a user attempting to sign in at your e-commerce site. For instance, customers need to enter a one-time password (OTP) sent to their registered email address or phone number in order to login to their accounts.

This type of APIs provides an additional layer of security beyond usernames and passwords, protecting customers from password attacks and enhancing security at your online store.

Example of two-factor authentication
Source:
Apple Inc.

2. Catalog API

Using a catalog API, you can easily create, edit or remove product items in your catalog. Some catalog APIs can also be integrated with other systems in your business, such as inventory management, order fulfillment and reporting tools.

3. Inventory API

An inventory API can be used to retrieve inventory data from a given database. With this API, you can sort or filter inventory data by different parameters, such as SKU, stock level and storage location. You can also perform batch updates of inventory quantities for your online shop.

4. Marketing API

Marketing APIs are useful to optimize the marketing performance of a business.

For example, Facebook’s Conversions API connects your marketing data to Facebook’s system. This would help Facebook’s algorithms measure the results of advertising, improve ad targeting, reduce cost per action and increase your return on ad spend.

Source: WordStream

5. Orders API

As its name indicates, an orders API exposes details about orders created on an e-commerce site, such as order dates, order items, order values, etc. Developers can then build web or mobile applications, using order information to track sales performance or customer behavior.

6. Payment API

A payment API enables you to accept payments at your online store.

Stripe’s Payment Methods API is an example of payment API. Once the API is activated, customers will be able to pay for an online order with a variety of methods, including credit cards, ACH debit transfers, Google Pay and many others.

Stripe’s prebuilt payment user interface
Source:
Stripe

7. Product information API

Product information APIs help you extract product information like product description, price, product ID, specifications and images from a given product page or a database.

This type of API is commonly used by developers seeking to develop applications to be integrated into e-commerce platforms. Currently, many product information APIs are available for scraping data from online marketplaces and e-tailers like Lazada, eBay, Walmart, ASOS and Forever 21.

8. Shipping API

Shipping APIs integrate the functionality of third-party carriers to an e-commerce site. They allow users to create shipping orders, print shipping labels and track shipments easily, hence automating the e-commerce order fulfillment process.

An example of shipping API in action can be seen from Shopline, an Asia-based e-commerce platform, which allows merchants to create a waybill with SF Express in one click:

Source: Shopline

9. Validation API

This type of API verifies details entered by customers on your e-commerce website.

A case in point to illustrate this is typos in email addresses. Due to the proximity of the characters “m” and “n” on the keyboard, many customers would type “gnail.com” or “gmail.con” instead of the correct domain name, “gmail.com”.

Validation APIs would verify customers’ input and identify possible errors, eliminating the hassle of verifying customer information and minimizing deliverability issues.

Some last words

With their numerous capabilities, APIs are game changers of the e-commerce world. They can automate workflow in business operations, connect systems that are otherwise incompatible, and change the way that data can be used — and this is precisely how our team at Choco Up reinvents the e-commerce funding experience. 

Leveraging data analytics and machine learning technology, we employ vast integration to streamline the funding application process and automate fund deployment. Unlike conventional forms of business financing, such as bank loans, applying for funding at Choco Up is quick, easy and seamless.

Just by answering a few questions about your business and connecting your sales or marketing accounts (e.g. Shopify, Magneto, Google Analytics, etc.) to our proprietary data integration platform, our algorithms will work the magic and return with a preliminary funding offer for you. When everything goes well, funding could be available in as soon as 48 hours.

Interested in getting quick, flexible funding to grow your online business? Learn more about our e-commerce funding here or claim your free preliminary offer today!

About Choco Up

Choco Up is a global technology and financial services platform, offering revenue-based financing and business growth solutions for digital merchants and startups.

With data analytics and machine learning at its core, Choco Up employs vast integrations to automate fund deployment, providing fast-growing companies with zero-equity funding in a quick and seamless manner.

We currently have offices in Singapore and Hong Kong and serve clients worldwide, providing smart-growth analytics and global payment solutions to fuel their growth.

Technology

Ready to scale your business faster?

Choco up invests from $10K to $10M USD on a revenue share model. We'll simply take a fixed percentage of your sales until we have recouped the capital + flat fee.