What is an API?
An API (Application Programming Interface) is a set of rules that allows software applications to communicate with each other. It defines how data and functions can be requested and shared, enabling developers to integrate services and build new functionality without starting from scratch.
Why is API matters?
APIs make systems interoperable. For ecommerce, APIs connect storefronts with payment gateways, shipping providers, CRMs, and marketing tools. This reduces manual work, ensures data accuracy, and helps brands scale operations faster.
How API works?
An API exposes specific endpoints — like URLs — that return data or perform actions when called. Requests are usually sent over HTTP/HTTPS and may use formats like JSON or XML. Authentication methods, such as API keys or OAuth, control access and security.
Example in ecommerce
A DTC skincare brand integrates a payment processor’s API to securely handle checkout transactions. At the same time, it uses a shipping carrier’s API to automatically generate labels and provide customers with real-time tracking updates — improving efficiency and customer experience.
Common mix-ups
APIs are often confused with SDKs (Software Development Kits). An SDK may include an API but also comes with libraries, tools, and documentation for easier development. APIs are also not the same as webhooks, which push data automatically instead of requiring requests.
Best practices
- Use versioning to prevent breaking changes for users.
- Apply authentication and rate limiting to secure data.
- Document APIs clearly with examples and error codes.
- Monitor performance and uptime to ensure reliability.
- Design APIs to be RESTful or GraphQL-based for scalability.
Industry benchmarks
- API response times should stay under 300 ms for smooth user experience.
- Uptime should meet or exceed 99.9% availability.
- Many ecommerce platforms (e.g., Shopify, Magento) provide APIs with daily request limits — often in the range of thousands per app per day.
- JSON has become the industry standard data format due to speed and compatibility.
Related terms
Webhook
Integration
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