What is eCommerce Business?

November 21, 2021
Table of Contents
    Add a header to begin generating the table of contents
    Scroll to Top

    A lot of people ask the question, “What is eCommerce business?” Electronic commerce is a business model. It involves trading over the internet through eCommerce websites. It’s known as electronic commerce since it happens over electronic devices. The model is one of the fastest-growing sectors in retail today. There are many different types of eCommerce businesses. Some sell items on eCommerce sites to those who have an online store with their domain name. E-commerce transactions are safe and secure, enabling financial transfers worldwide.

    This article will discuss eCommerce and the types of eCommerce models that you can use in your business.

    What Is Electronic Commerce (Ecommerce)?

    Electronic commerce involves selling and buying goods and services online. You can do it as individuals or businesses. The eCommerce industry has been steadily growing since its inception. It is an emerging industry that’s growing at 16% annually. It has a projected global value of $24 billion in 2017 and over $427 million by 2020. The eCommerce model can be lucrative for both retailers and consumers. It has opened up the opportunity to reach out worldwide without geographic boundaries. Thus, giving businesses the ability to sell their products or services.

    The eCommerce platform is different from retail sales. Physical stores have high costs such as rent and taxes. The best part about eCommerce is that you can buy and sell various items online. These include retail products, services, digital goods, and even real estate.

    Understanding Ecommerce

    Ecommerce helps online business owners to sell their products and services worldwide. It allows businesses to reach out to potential customers through the internet. Customers can purchase from an eCommerce store. There is no need for physical storage space. The eCommerce platforms include both small and large-scale organisations. These include electronic marketplaces such as Amazon and eBay. It helps business owners with advertising and marketing their products.

    Electronic commerce is divided into different models. They include business to consumer, consumer to business, business to business, and consumer to consumer. Within these broad categories, you can select one that suits your business. Several factors can help you determine the best eCommerce model for your business. For example, business to consumer is best for businesses that sell physical goods. Consumer to business, on the other hand, is best for businesses that sell digital products. You can also use it to sell software or digital effects.

    There are also several categories of eCommerce business models that you can use in your company. The most common ones include dropshipping, direct sales, affiliate marketing, and retail arbitrage.

    what is ecommerce business

     

    History of Ecommerce

    In the 1960s, the idea of electronic commerce was introduced. But it wasn’t until 1989 that online shopping began. The first transaction took place when Michael Aldrich purchased a Harry Potter video game from Ceefax. It was an information service available on TV in England.

    The 1990s saw significant growth for eCommerce. Several websites were created to enable people to sell their products and services. These included eBay, Alibaba, PowaRobot, and Amazon. By the time we got into the 21st century, eCommerce had become global. Online retailers such as Overstock were accepting Bitcoin payments for purchases.

    The eCommerce industry has been growing since its inception. It saw significant growth in the 1990s and early 2000s. More businesses started using online platforms to reach out to potential customers. Currently, various changes are occurring in the industry. For example, Amazon is opening up its marketplace to third-party sellers. It has also unveiled a new service. It allows artisans and small businesses to trade directly on the Amazon website. They use Fulfilment by Amazon (FBA).

    The innovation of new technology such as artificial intelligence has transformed eCommerce. It will continue growing in the coming years. There will be more growth for companies that adopt innovative practices. These include social media marketing, customer relationship management, and mobile technology.

    Types of E-commerce Models

    As we have discussed earlier, eCommerce has different types of models. Let us discuss each of them in detail for a better understanding.

    Business to Consumer (B2C)

    Business to Consumer is an eCommerce model that involves selling physical products or services to end consumers. It is the most common eCommerce model. B2c works by setting up a business website and using it to sell your products. The site should be well-designed and easy for customers to navigate. It also needs an effective marketing strategy that will help you reach out to potential buyers online. Once the sale is made, you can use different ways, such as cash on delivery or electronic funds transfer (EFT), to process the payment.

    Business to Business (B2B)

    Businesses can also sell products and services to each other. The Business to business model serves this specific purpose. Big companies use this type of model for selling goods and services to smaller ones. It is also used in the supply chain where different companies supply products among themselves. Bulk selling is another type of B2B model. It involves trading your products in bulk quantities to various wholesalers and retailers. The advantage of this model is that you save on packaging, transport, and storage costs.

    To trade your products or services in a B-to-B model, you need a good marketing strategy. You can use eCommerce websites that connect buyers with sellers. You may also use business newspapers where companies advertise their products online. The other option is joining trade shows and exhibitions where a business showcases its products.

    Here are examples of companies using the B2B model:

    Distributors and wholesalers that supply products to retailers

    Warehousing stores like Amazon, Shopify, and eBay provide storage space for sellers.

    Manufacturers, importers, and exporters in international trade

    Consumer to Consumer (C2C)

    How about consumers selling to other consumers? C2C is an eCommerce model where consumers trade among themselves. It is a model where people vend, usually on an eCommerce site such as classified ads websites.

    The most common example of this online eCommerce business is Craigslist which allows you to list your items for free in their local section. eBay also has the C-based buying platform called ‘eBay Classifieds’, where you can advertise your products. It is a good idea to list the price of the product at some online marketplaces. It helps buyers know how much they have to pay without wasting time asking about prices. They can make transactions using a credit card or other cash transfers methods. Other C2C markets include OLX, Gumtree, and Facebook Marketplace.

    A C2C marketplace is an excellent option for customers who want to buy things at lower prices. On the other hand, it is not suitable for purchasing expensive items because there are no guarantees that buyers will be genuine and honest in their transactions. The growth of the model is due to the emergence of retail websites and social media. It is an excellent way for people to connect and exchange goods on the online market.

    Consumer to Business (C2B)

    The C2B eCommerce model is a model where a customer trades their products to businesses. The model is a web-enabled platform where you can trade your goods directly to buyers online. It has a vast market because many companies want access to raw materials such as metals, plastics, and chemicals at wholesale prices. For this reason, they prefer buying from individuals who have the required materials.

    A C2B business website is suitable for both businesses and individuals interested in vending their goods. It is an excellent option for companies since they can buy products from individuals at wholesale prices. Also, it is a good option for people who want to trade their products because they get access to buyers without spending on advertising and marketing costs.

    To use this model as an individual seller, you need a website to list your items online in an appealing way. It helps attract buyers to your site and encourages them to make purchases by displaying product images, prices, and shipping costs. You can sell your products either through online marketplaces or on the website that you have created for this purpose. Some of the online market places that you can practice C2B include eBay, Amazon, Alibaba.

     

    online ecommerce business

    Advantages of an eCommerce online store

    Flexibility

    An eCommerce website allows you to run your business from anywhere in the world. It does not require people to come into an office or store to buy products and services, making it more flexible than brick-and-mortar stores. Also, operating online has many advantages, such as reduced expenses on infrastructure because there is no need for physical stores that require rent and employees.

    Increased Sales

    A business that uses electronic commerce and marketing tactics to trade its goods can expand its reach worldwide without local boundaries. It is easier to create a global customer base from the start. That will increase sales because even if only a few people visit your website each month, you still have an opportunity to make a sale.

    Prompt responses to customers

    Electronic commerce allows a business to connect with its clients immediately since they can access the internet anywhere. On the other hand, if you own a brick-and-mortar store, it will take time for someone who wants to buy your product or service to come into your shop, resulting in a loss of sales opportunities.

    Disadvantages of eCommerce business

    Demographic Issues

    The market for online businesses is limited because most people don’t have access to the internet or are not interested in buying products and services over the web. Most of them prefer brick and mortar stores where they can purchase goods after feeling, touching and testing them, making their shopping experience more personal.

    Competition

    With the increasing number of businesses that use eCommerce for selling their products, it has become more challenging to stand out from other companies. New competitors emerge every day. It makes it difficult for a small business to compete with them and gain a significant market share.

    Not suitable for every product or service.

    Ecommerce is not suitable for all businesses. For instance, if your company provides insurance services, it would be better to target local clients because they may prefer buying them from a physical store.

    What Is the Difference Between Ecommerce and Ebusiness?

    Ecommerce and E-business are two different concepts of eCommerce sales that are often used interchangeably. While they have similarities, there is a difference between the two models, which you should know before choosing either of them for your business.

    eCommerce means trading goods or services over an electronic channel such as mobile devices or computers. Ebusiness involves running a business online by using e-services like cloud computing.

    When deciding between eCommerce and Ebusiness, learning about various business models is crucial before choosing one for your company. If you are interested in being an online retailer and selling products online, you should develop an online store with a payment platform. It allows customers to make payments through debit or credit cards. You can try Shopify or another eCommerce website that is best for your business. On the other hand, if you are interested in providing e-services to your clients online through cloud computing platforms such as Microsoft Azure or Amazon Web Services (AWS), then Ebusiness is a good option for you because it has a broader definition of services that you can provide.

    Also, E-commerce is a less expensive option than Ebusiness because it does not involve investing in developing cloud computing platforms. It is a good option for small businesses just starting because they do not have to invest in infrastructure and servers. Ecommerce is generally used by companies with products such as clothing, food items, electronics etc.

    Ebusiness, on the other hand, is an up-and-coming model with high returns. It allows a company to make money by providing cloud computing, web design, or SEO services to its clients. Also, it offers an opportunity for businesses to invest in platforms that have increased sales significantly over the last few years.

    The Bottom Line

    You need to do a comprehensive research before starting an eCommerce business to determine the best option for your business. You can use the internet to find out which model is more profitable. You can also decide whether or not you will trade products or services for your online store. The goal is to make a profit. Also, do not forget to include personal preferences such as location and interests when making this decision. They play an essential role in choosing between eCommerce vs eBusiness. The model you select should suit your business and enhance its growth and development in the long term.

    Share this post
    Share on facebook
    Share on twitter
    Share on linkedin
    Share on email