What is eCommerce? A simple definition!
Ecommerce, also known as electronic commerce or internet commerce, refers to the buying and selling of goods or services using the internet.
Key Takeaways
- Ecommerce involves buying and selling goods and services online.
- It can be done using computers, tablets, smartphones, and other smart devices.
- Almost anything can be bought through ecommerce; for this reason, it is often very competitive.
- Ecommerce can be a substitute for brick-and-mortar stores, or businesses can choose to maintain both.
- Ecommerce operates in several market segments, including business-to-business, business-to-consumer, consumer-to-consumer, and consumer-to-business.
What is eCommerce?
Ecommerce refers to buying and selling goods or services online. This can be done through a website or an app, and usually involves transferring money and data to complete the transaction.
Ecommerce is often used to describe selling physical products online, but it can also apply to any kind of commercial transaction that happens over the internet.
The history of ecommerce began with the first online sale on 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.
Ecommerce has made it easier for people to find and buy products online. This has been beneficial for independent freelancers, small businesses, and large corporations, who can now sell their goods and services to a larger audience than before. Global retail ecommerce sales are projected to reach $27 trillion by 2020.
Types of Ecommerce Models
There are four main types of ecommerce models that can describe almost every transaction that takes place between consumers and businesses.
1. Business-to-Consumer (B2C)
The first and most common type of ecommerce is business-to-consumer. In B2C transactions, a business sells a good or service to an individual consumer. The vast majority of online retailers are B2C companies, as this is the most straightforward way to sell products and services online.
2. Business-to-Business (B2B)
The second major type of ecommerce is business-to-business. In B2B transactions, businesses sell goods or services to other businesses. This can include anything from office supplies to industrial equipment. Many times, these types of sales are much larger in scope than B2C sales, as businesses tend to buy in bulk.
3. Consumer-to-Consumer (C2C)
A less common but still notable type of ecommerce is consumer-to-consumer. In C2C transactions, individuals sell goods or services to other individuals. The best example of this is probably eBay, where people can buy and sell almost anything they want.
4. Consumer-to-Business (C2B)
The final major type of ecommerce is consumer-to-business. In C2B transactions, consumers sell goods or services to businesses. A good example of this would be someone selling a handmade product on Etsy.com
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 sales: This is the most common type of ecommerce, and involves the direct sale of goods from a business to a consumer. The transaction is completed online, typically through a shopping cart system on the business’s website.
- Business-to-business (B2B): This type of ecommerce refers to transactions between two businesses, such as when a company sells products or services to another company. These transactions are often done through an online marketplace or an electronic data interchange (EDI).
- Consumer-to-consumer (C2C): This type of ecommerce occurs when consumers sell goods or services to other consumers through an online marketplace. A good example of this is eBay, where individuals can buy and sell items to one another.
- Mobile commerce (mCommerce): This type of ecommerce involves the use of mobile devices, such as smartphones and tablets, to conduct transactions online. This can include making purchases through mobile apps or using mobile browsers to buy items from mobile-optimized websites.
- Social commerce: This type of ecommerce takes place on social media platforms, such as Facebook and Twitter, and typically involves businesses promoting and selling products or services through their social media profiles.
- Digital goods: This type of ecommerce involves the sale of digital products that can be downloaded or used online, such as music, movies, games, and software. These transactions are often completed using a digital wallet system.
