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.
Advantages Of E-Commerce. There’s a reason vendors like Amazon choose to do business online. It gives them some unique advantages over their store-bound competitors. The biggest advantages are the low costs, the flexibility and speed, and the high levels of data.
Among the top advantages for starting an e-commerce business are eliminating geographical limitations, gaining new customers with search engine visibility, lower costs for maintenance and rent, and higher capacity for goods and deliveries while the core disadvantages of starting an e-commerce business include losing …
The history of ecommerce is closely intertwined with the history of the internet. Online shopping only became possible when the internet was opened to the public in 1991. Amazon.com was one of the first ecommerce sites in the US to start selling products online and thousands of businesses have followed since.
Total US Amazon retail ecommerce sales (gross merchandise value) are expected to hit $258.22 billion in 2018, up 29% over 2017—far exceeding total US retail ecommerce’s growth of 16%.Jul 1, 2018
E-Commerce or Electronic Commerce
E-commerce is a popular term for electronic commerce or even internet commerce. The name is self-explanatory, it is the meeting of buyers and sellers on the internet. This involves the transaction of goods and services, the transfer of funds and the exchange of data.
So when you log into your Amazon and purchase a book, this is a classic example of an e-commerce transaction. Here you interact with the seller (Amazon), exchange data in form of pictures, text, address for delivery etc. and then you make the payment.
As of now, e-commerce is one of the fastest growing industries in the global economy. As per one estimate, it grows nearly 23% every year. And it is projected to be a $27 trillion industry by the end of this decade.
Types of E-Commerce Models
Electronic commerce can be classified into four main categories. The basis for this simple classification is the parties that are involved in the transactions. So the four basic electronic commerce models are as follows,
1. Business to Business B2B
This is Business to Business transactions. Here the companies are doing business with each other. The final consumer is not involved. So the online transactions only involve the manufacturers, wholesalers, retailers etc.
2. Business to Consumer B2C
Business to Consumer. Here the company will sell their goods and/or services directly to the consumer. The consumer can browse their websites and look at products, pictures, read reviews. Then they place their order and the company ships the goods directly to them. Popular examples are Amazon, Flipkart, Jabong etc.
3. Consumer to Consumer C2C
Consumer to consumer, where the consumers are in direct contact with each other. No company is involved. It helps people sell their personal goods and assets directly to an interested party. Usually, goods traded are cars, bikes, electronics etc. OLX, Quikr etc follow this model.
4. Consumer to Business C2B
This is the reverse of B2C, it is a consumer to business. So the consumer provides a good or some service to the company. Say for example an IT freelancer who demos and sells his software to a company. This would be a C2B transaction.
Learn more about m-Commerce here.
Examples of E-Commerce
Retailers with online stores such as Walmart, Macy’s, and IKEA are all examples of businesses that engage in B2C ecommerce.
Other examples listed below:
Advantages of E-Commerce
E-commerce provides the sellers with a global reach. They remove the barrier of place (geography). Now sellers and buyers can meet in the virtual world, without the hindrance of location.
Electronic commerce will substantially lower the transaction cost. It eliminates many fixed costs of maintaining brick and mortar shops. This allows the companies to enjoy a much higher margin of profit.
It provides quick delivery of goods with very little effort on part of the customer. Customer complaints are also addressed quickly. It also saves time, energy and effort for both the consumers and the company.
One other great advantage is the convenience it offers. A customer can shop 24×7. The website is functional at all times, it does not have working hours like a shop.
Electronic commerce also allows the customer and the business to be in touch directly, without any intermediaries. This allows for quick communication and transactions. It also gives a valuable personal touch.