What is E-commerce?

What is E-commerce?

What is Ecommerce?

Ecommerce, also known as electronic commerce or internet commerce, refers to the buying and selling of goods or services using the internet, and the transfer of money and data to execute these transactions. Ecommerce is often used to refer to the sale of physical products online, but it can also describe any kind of commercial transaction that is facilitated through the internet.

Whereas e-business refers to all aspects of operating an online business, ecommerce refers specifically to the transaction of goods and services.

The history of ecommerce begins with the first ever online sale: on the August 11, 1994 a man sold a CD by the band Sting to his friend through his website NetMarket, an American retail platform. This is the first example of a consumer purchasing a product from a business through the World Wide Web—or “ecommerce” as we commonly know it today.

Since then, ecommerce has evolved to make products easier to discover and purchase through online retailers and marketplaces.  Independent freelancers, small businesses, and large corporations have all benefited from ecommerce, which enables them to sell their goods and services at a scale that was not possible with traditional offline retail.

Types of e-commerce system :

There are 6 types of e-commerce systems. They are B2B, B2C, C2C, C2B, B2A, C2A. All these 6 types of e-commerce that are used today are classified based on the nature of the transaction.

B2B (Business-to-Business)

B2B e-commerce can be simply defined as the commerce between companies. In Business-to-Business type of electronic commerce system, companies do business with each other. For say, a manufacturer selling a product to a wholesaler, a wholesaler selling a product to the retailer. Here manufacturer, wholesaler and retailer all are doing their separate businesses.

Above diagram illustrates the B2B model. There are 3 businesses- wholesaler, manufacturer and the retailer. Here manufacturer has a website using which wholesalers can purchase products from the manufacturer. When a wholesaler places an order on the website, the information regarding the order will be received by the manufacturer through the website. Then after processing the order, the manufacturer will send the product to the wholesaler. After receiving the products wholesaler can sell it to the retailers. This type of business is called B2B model.

B2C (Business-to-Consumer)

B2C model works as its name suggest. In this model, the company sells their products, goods or services directly to the consumer online. Here the customer can view products on the website that they want to buy and can order it. After receiving the order details, the company will process the order and then send the products directly to the customer. For example, Amazon, Flipkart etc are this type of e-commerce business model which we are using in our daily life.

We can view products on the websites like Amazon, Flipkart and can order it. After receiving the order, the selling company of the products processes it and send it to us. Here a business company is selling their products to the customer with the help of an e-commerce website.

C2C (Consumer-to-Consumer)

Here a consumer sells products, goods or services to other consumers using the internet or the web technologies. The C2C business model helps us to sell our assets or properties like a car, house, bike, electronics etc via online to other consumers. OLX, Quickr etc are this type of business model.

Here, if consumer-1 wants to sell a product then he/she can publish the details of the product on the website like OLX or Quickr. The consumer-2 can view the details of the product on that website that consumer-1 wants to sell. If consumer-2 is willing to buy the product that consumer-1 is selling, then the buyer can directly contact the seller and the product will be sold. Here products are selling directly from a consumer to another consumer via the website.

C2B (Consumer-to-Business)

A consumer to the business model is a type of commerce where a consumer or end user provides a product or service to an organization. It is the reverse model of the B2C or business to consumer model, where businesses produce products and services for consumer consumption.

In this business model, individual customers offer to sell products or services to the companies who are prepared to purchase them. For example, if you are a software developer, then you can show a demo of your software or skills that you have on the sites like freelancer, fiverr etc. If a company likes your software or skills then the company will directly buy the software from you or can hire you for their services.

B2A (Business-to-Administration)

B2A or business to administration also referred as the business to government (B2G) commerce, it is a derivative of B2B e-commerce model. in this model, the businesses and government agencies (administration) use central websites to exchange information and do business with each other more efficiently than they usually can off the web.

B2G business is also referred to public sector marketing that means marketing products and services to various government levels. The B2G business network provides a platform to businesses to bid on government opportunities such as auctions, tenders and application submission etc.

C2A (Consumer-to-Administration)

Consumer to administration or consumer to government e-commerce model helps consumers to request information or post various feedbacks regarding public sectors directly to the government authorities or administration. For say, making electricity bill payments through the website government, making payment of taxes, payment of health insurance etc are C2A type of business model.

Consumer to administration or consumer to government e-commerce model provides an easy and instant solution or way to establish communication between the consumers and government.

Advantages of E-commerce

  • It can help increase profits; it can increase sales and decrease costs.
  • It can help organizations do business 7 days a week and 24 hours a day.
  • It can help organizations have customers all around the globe and not be limited to a specific region.
  • It helps organizations bring higher return on advertisements, if managed properly.
  • It helps organizations identify new suppliers, partners and customers.
  • It increases flexibility and ease of shopping for the customer.
  • It can help in low operational cost.
  • It can provide personalized product and customer customization.
  • Shoppers are given a broader range of products to choose from online.

Disadvantages of E-commerce

  • The buyer cannot touch or feel the product online.
  • The customer has to wait for delivery of their product.
  • Perishable goods bought online can get spoiled during delivery.
  • It is difficult to know when an online site is safe to use.
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