What is E-Commerce

E-COMMERCE

E-commerce (electronic commerce) is the activity of electronically buying or selling products on online services or over the Internet. E-commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange EDI), inventory management systems, and automated data collection systems. E-commerce is in turn driven by the technological advances of the semiconductor industry and is the largest sector of the electronics industry.

What Is Electronic Commerce (Ecommerce)?

Electronic commerce refers to companies and individuals that buy and sell goods and services over the Internet. E-commerce operates in different types of market segments and can be conducted over computers, tablets, smartphones, and other smart devices. Nearly every imaginable product and service is available through e-commerce transactions, including books, music, plane tickets, and financial services such as stock investing and online banking. As such, it is considered a very disruptive technology.

KEY TAKEAWAYS

E-commerce is the buying and selling of goods and services over the Internet.
It is conducted over computers, tablets, smartphones, and other smart devices.
Almost anything can be purchased through e-commerce today; for this reason, e-commerce is often highly competitive.
It can be a substitute for brick-and-mortar stores, though some businesses choose to maintain both.
E-commerce operates in several market segments including business-to-business, business-to-consumer, consumer-to-consumer, and consumer-to-business.

Here’s a few of the variations of how e-commerce is spelt:

e-commerce
E-commerce
eCommerce
E-commerce
eCommerce
e-commerce

(In other words, “what is e-commerce” is far easier to answer than how to spell it, so we may have to agree to disagree on the proper spelling).

“Molton Brown beat its 2022 Black Friday – Cyber Monday forecast expectations, yielding ~430k units across all channels amounting to £ 6.5m. 60% of our sales are from our webshops based on

SAP Commerce Cloud.”

– Anjun Murari, VP of Global Sales Channels & Strategic Development, Molton Brown Global

Types of e-commerce businesses and examples of how they work

As commerce continues to evolve, so do the ways that it’s conducted.

Following are the most traditional types of e-commerce business models and examples of what they mean.

Business to Consumer (B2C): B2C e-commerce is the most popular e-commerce model. Business to the consumer means that the sale is taking place between a business and a consumer, like when you buy something 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 e-commerce.
Direct to Consumer (D2C): Direct-to-consumer e-commerce is the newest model of e-commerce, and trends within this category are continually changing. D2C means that a brand is selling directly to its end customer without going through a retailer, distributor, or wholesaler. Subscriptions are a popular D2C item, and social selling via platforms like Instagram, Pinterest, TikTok, 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, Fiverr, 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.

Understanding E-commerce

As noted above, e-commerce is the process of buying and selling tangible products and services online. It involves more than one party along with the exchange of data or currency to process a transaction. It is part of the greater industry that is known as electronic business (ebusiness), which involves all of the processes required to run a company online.

E-commerce has helped businesses (especially those with a narrow reach like small businesses) gain access to and establish a wider market presence by providing cheaper and more efficient distribution channels for their products or services. Target (TGT) supplemented its brick-and-mortar presence with an online store that allows customers to purchase everything from clothes and coffeemakers to toothpaste and action figures right from their homes.

Providing goods and services isn't as easy as it may seem. It requires a lot of research about the products and services you wish to sell, the market, audience, competition, as well as expected business costs.

Once that's determined, you need to come up with a name and set up a legal structure, such as a corporation. Next, set up an e-commerce site with a payment gateway. For instance, a small business owner who runs a dress shop can set up a website promoting their clothing and other related products online and allow customers to make payments with a credit card or through a payment processing service, such as PayPal.

E-commerce may be thought of as a digital version of mail-order catalogue shopping. Also called online commerce, e-commerce is the transaction between a buyer and a seller that leverages technology.

Special Considerations

E-commerce has changed the way people shop and consume products and services. More and more people are turning to their computers and smart devices to order goods, which can easily be delivered to their homes. As such, it has disrupted the retail landscape. Amazon and Alibaba have gained considerable popularity, forcing traditional retailers to make changes to the way they do business.

But that's not all. Not to be outdone, individual sellers have increasingly engaged in e-commerce transactions via their websites. And digital marketplaces such as eBay or Etsy serve as exchanges where multitudes of buyers and sellers come together to conduct business.

The U.S. Department of Commerce recognizese-commercee businesses such as transactional sites, static content sites, online marketplaces, and auction sites.

History of E-commerce

Most of us have shopped online for something which point, whweakensaken the wooden part of soffits commerce. So it goes without saying that e-commerce is everywhere. But very few people may know that e-commerce has a history that goes back to before the internet began.

E-commerce goes back to the 1960s when companies used an electronic system called the Electronic Data Interchange to facilitate the transfer of documents. It wasn't until 1994 that the very first transaction. took place. This involved the sale of a CD between friends through an online retail website called NetMarket.

The industry has gone through so many changes since then, resulting in a great deal of evolution. Traditional brick-and-mortar retailers were forced to embrace new technology to stay afloat as companies like Alibaba, Amazon, eBay, and Etsy became household names. These companies created a virtual marketplace for goods and services that consumers can easily access.

New technology continues to make it easier for people to do their online shopping. People can connect with businesses through smartphones and other devices and by downloading apps to make purchases. The introduction of free shipping, which reduces costs for consumers, has also helped increase the popularity of the -commerce industry.

Advantages and Disadvantages of E-commerce

E-commerce offers consumers the following advantages:

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E-commerce Defined: Types, History, and Examples

Nearly any product and service is available through e-commerce transactions

By ANDREW BLOOMENTHAL Updated July 06, 2022

Reviewed by SOMER ANDERSON

Fact checked by KATRINA MUNICHIELLO

E-commerce

Investopedia / Laura Porter

What Is Electronic Commerce (Ecommerce)?

Electronic commerce (ecommerce) refers to companies and individuals that buy and sell goods and services over the Internet. E-commerce operates in different types of market segments and can be conducted over computers, tablets, smartphones, and other smart devices. Nearly every imaginable product and available through e-commerce transactions, including books, music, plane tickets, and financial services such as stock investing and online banking. As such, it is considered a very disruptive technology.

KEY TAKEAWAYS

E-commerce is the buying and selling of goods and services over the Internet.

It is conducted over computers, tablets, smartphones, and other smart devices.

Almost anything can be purchased through e-commerce today; for this reason, e-commerce is often highly competitive.

It can be a substitute for brick-and-mortar stores, though some businesses choose to maintain both.

E-commerce operates in several market segments including business-to-business, business-to-consumer, consumer-to-consumer, and consumer-to-business.

Electronic Commerce:

Understanding E-commerce

E-commerce may be thought of as a digital version of mail-order catalogue shopping. Also called online commerce, e-commerce is the transaction between a buyer and a seller that leverages technology.

Special Considerations

The U.S. Department of Commerce recognizes e-commerce businesses such as transactional sites, static content sites, online marketplaces, and auction sites.

History of E-commerce

Most of us have shopped online for something at some point, which means we've taken part in e-commerce. So it goes without saying that e-commerce is everywhere. But very few people may know that e-commerce has a history that goes back to before the internet began.

Advantages and Disadvantages of E-commerce

E-commerce offers consumers the following advantages:

Convenience: E-commerce can occur 24 hours a day, seven days a week. Although eCommerce may take a lot of work, it is still possible to generate sales as you sleep or earn revenue while you are away from your store.
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.
Potentially lower start-up cost: E-commerce companies may require a warehouse or manufacturing site, but they usually don't need a physical storefront. The cost to operate digitally is often less expensive than needing to pay rent, insurance, building maintenance, and property taxes.
International sales: As long as an e-commerce store can ship to the customer, an e-commerce company can sell to anyone in the world and isn't limited by physical geography.
Easier to retarget customers: as customers browse a digital storefront, it is easier to entice their attention towards placed advertisements, directed marketing campaigns, or pop-ups specifically aimed at a purpose.

But certain drawbacks come with e-commerce sites, too. The disadvantages include:

Limited customer service: If you shop 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, e-tailers 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.
Reliance on technology: If your website crashes, garners an overwhelming amount of traffic, or must be temporarily taken down for any reason, your business is effectively closed until the e-commerce storefront is back.
Higher competition: Although the low barrier to entry regarding low cost is an advantage, this means other competitors can easily enter the market. E-commerce companies must have mindful marketing strategies and remain diligent in SEO optimization to ensure they maintain a digital presence.

E-Commerce Example

Amazon is a giant in the field of ecommerce. In fact, it is the largest online shopping mall in the world and that number continues to grow. Therefore, this situation, which has a huge impact on the retail industry, is forcing some large retailers to rethink their strategies and change their goals.

The company works on ecommerce based online sales and delivery models. Founded in 1994 by Jeff Bezos, this store started as an online bookstore but has since expanded to include everything from clothing to appliances to electronics to food and water to beverages and electronics.

The company's sales in 2022 reached US$ 513.98 billion, compared to US$ 469.82 billion in 2021, up 9% from the previous year. Amazon's operating income will drop from $24.88 billion in 2021 to $12.25 billion in 2022. The company reported sales of $100 million. The company announced a loss of $ 2.72 billion and revenue of $ 33.36 billion in 2022.

How to start an e-commerce business?

Make sure you do your research before starting a job. Find out what products and services you want to sell and research the market, target audience, competition and pricing needs.

Then come up with a name, choose a business model and get the necessary information (taxpayer, license and permit if necessary).

Before you start selling, decide on a platform and create your website (or have someone else do it for you).

Remember, keep things simple in the beginning and make sure you use as much as possible to market your business so it can grow.

What is an e-commerce site?

An ecommerce site is a website that allows you to buy and sell goods and services online. Companies like Amazon and Alibaba are examples of e-commerce websites.

What is the difference between e-commerce and e-commerce?

E-commerce involves buying and selling goods and services online and is only one part of e-commerce. Ecommerce involves the entire process of running an online business. In short, it is all the activities that take place in online commerce.

What is an example of e-commerce?

Dollar Shave Club offers personal care, health and beauty products to its customers.

Customers can choose the products they want delivered to them and sign up for a long-term membership to have the products delivered to them regularly. Dollar Shave Club purchases products in bulk from other companies, then packages the products, manages members, and markets the products.