E-commerce (electronic commerce) is the activity of electronically buying or selling of products on online services or over the Internet.Electronic commerce or e-commerce (sometimes written as eCommerce) is a business model that lets firms and individuals buy and sell things over the internet. E-commerce operates in all four of the following major market segments:
- Business to business
- Business to consumer
- Consumer to consumer
- Consumer to business
As commerce continues to evolve, so do the ways that it’s conducted. Following are the most traditional types of e-commerce models:
Business to Consumer (B2C): B2C e-commerce is the most popular e-commerce model. Business to consumer means that the sale is taking place between a business and a consumer, like when you buy a rug from an online retailer.
Business to Business (B2B): B2B e-commerce refers to a business selling a good or service to another business, like a manufacturer and wholesaler, or a wholesaler and a retailer. Business to business e-commerce isn’t consumer-facing, and usually involves products like raw materials, software, or products that are combined. Manufacturers also sell directly to retailers via B2B ecommerce.
Direct to Consumer (D2C): Direct to consumer e-commerce is the newest model of ecommerce. D2C means that a brand is selling directly to their end customer without going through a retailer, distributor, or wholesaler. Subscriptions are a popular D2C item, and social selling via platforms like InstaGram, Pinterest, Facebook, SnapChat, etc. are popular platforms for direct to consumer sales.
Consumer to Consumer (C2C): C2C e-commerce refers to the sale of a good or service to another consumer. Consumer to consumer sales take place on platforms like eBay, Etsy, Fivver, etc.
Consumer to Business (C2B): Consumer to business is when an individual sells their services or products to a business organization. C2B encompasses influencers offering exposure, photographers, consultants, freelance writers, etc.
E-commerce can be a substitute for brick-and-mortar stores, though some businesses choose to maintain both.
Examples of Ecommerce
Ecommerce can take on a variety of forms involving different transactional relationships between businesses and consumers, as well as different objects being exchanged as part of these transactions.
- Retail:-The sale of a product by a business directly to a customer without any intermediary.
- Wholesale:– The sale of products in bulk, often to a retailer that then sells them directly to consumers.
- Dropshipping:– The sale of a product, which is manufactured and shipped to the consumer by a third party.
- Crowdfunding:– The collection of money from consumers in advance of a product being available in order to raise the startup capital necessary to bring it to market.
- Subscription:– The automatic recurring purchase of a product or service on a regular basis until the subscriber chooses to cancel.
- Physical products:– Any tangible good that requires inventory to be replenished and orders to be physically shipped to customers as sales are made.
- Digital products:– Downloadable digital goods, templates, and courses, or media that must be purchased for consumption or licensed for use.
- Services:– A skill or set of skills provided in exchange for compensation. The service provider’s time can be purchased for a fee.
E-commerce businesses may also employ some or all of the followings:
- Online shopping for retail sales direct to consumers via Web sites and mobile apps, and conversational commerce via live chat, chatbots, and voice assistants.
- Providing or participating in online marketplaces, which process third-party business-to-consumer (B2C) or consumer-to-consumer (C2C) sales
- Business-to-business (B2B) buying and selling;
- Gathering and using demographic data through web contacts and social media
- Business-to-business (B2B) electronic data interchange
- Marketing to prospective and established customers by e-mail or fax (for example, with newsletters)
- Engaging in pretail for launching new products and services
- Online financial exchanges for currency exchanges or trading purposes.
E-commerce has become an important tool for small and large businesses worldwide, not only to sell to customers, but also to engage them.
Some common applications related to electronic commerce are:
- B2B e-commerce (business-to-business)
- B2C e-commerce (business-to-consumer)
- Conversational commerce: e-commerce via chat
- Digital Wallet
- Document automation in supply chain and logistics
- Electronic tickets
- Enterprise content management
- Group buying
- Instant messaging
- Internet security
- Online auction
- Online banking
- Online office suites
- Online shopping and order tracking
- Online transaction processing
- Print on demand
- Shopping cart software
- Social networking
- Usenet newsgroup
- Virtual assistant
- Domestic and international payment systems
The Advantages and Disadvantages of Electronic Commerce
E-commerce offers consumers the following advantages:
- Convenience. E-commerce can occur 24 hours a day, seven days a week.
- Increased selection. Many stores offer a wider array of products online than they carry in their brick-and-mortar counterparts. And many stores that solely exist online may offer consumers exclusive inventory that is unavailable elsewhere.
E-commerce carries the following disadvantages:
- Limited customer service. If you are shopping online for a computer, you cannot simply ask an employee to demonstrate a particular model’s features in person. And although some websites let you chat online with a staff member, this is not a typical practice.
- Lack of instant gratification. When you buy an item online, you must wait for it to be shipped to your home or office. However, retailers like Amazon make the waiting game a little bit less painful by offering same-day delivery as a premium option for select products.
- Inability to touch products. Online images do not necessarily convey the whole story about an item, and so e-commerce purchases can be unsatisfying when the products received do not match consumer expectations. Case in point: an item of clothing may be made from shoddier fabric than its online image indicates.