What is E-Commerce?

In today’s world, a big player in global economics is what we know as e-commerce. In all countries and the global market, a huge portion of sales and trade is done online, solidifying e-commerce as an essential part of the everyday life of people around the world. Astonishingly, though e-commerce has become an essential part of everyday life, it hasn’t been around for long, with the first e-commerce sale taking place in 1994. In light of that, it is no surprise that few people still fail to understand what e-commerce is. For those people, this article is the right place to be as it will highlight the core aspects of e-commerce.

Simply put, e-commerce, which is also referred to as electronic commerce, online commerce, and internet commerce, is the buying and selling of various goods and services over an electronic network, mainly the internet. It also encompasses the means of payment for such transactions, which is the transfer of funds or data over the internet. Following this aforementioned definition of e-commerce, a misconception that e-commerce only refers to the sale of physical products online is of common mention.

However, the reality is that any sort of commercial transaction that is conducted via the internet falls within the scope of e-commerce. Another common misconception surrounding e-commerce is the term being used interchangeably with e-business, although they are not synonymous. To clear the said misconception, e-business is concerned with all aspects of operating an online business, whereas e-commerce is specifically concerned with the transaction of goods and services online. An important aspect to note about e-commerce is an e-commerce business, which is an individual entity or organization that seeks to make a profit by conducting e-commerce. These e-commerce businesses operate with various models that are classified based on the parties participating in online transactions.

Types of e-commerce models

As aforementioned, the different types of e-commerce or e-commerce models are classified by the parties participating in the online transaction. This has led to four main types that can describe virtually every transaction that takes place between an e-commerce business and a consumer. These four types, no matter how different, will need nopCommerce for their actualization.

1. Business to Consumer (B2C)

As the name implies, this is where an e-commerce business sells its goods or services directly to the individual consumer, as a physical retail store would. Here, you have e-commerce examples like Amazon and Walmart.

2. Business to Business (B2B)

This is where an e-commerce business is selling its goods and services to other businesses. A perfect example of this model is Alibaba, as their suppliers sell to other businesses.

3. Consumer to Consumer (C2C)

Here, you have platforms like eBay, for example, as they provide a space for consumers to sell their goods and services to other consumers.

4. Consumer to Business (C2B)

A C2B model is where a consumer sells their goods and services to a business or organization. A good example of this is photographers selling their photographs to a business.

Benefits of e-commerce

  • Electronic commerce allows for simpler, easier, and more convenient purchases.
  • It allows for a global marketplace, where customers from around the world can easily purchase whatever product they require.
  • It minimizes start-up expenses for digital sellers.


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