What Is E-commerce?
E-commerce plays a significant role in the marketplace, both nationally and internationally. With more people making purchases online rather than at traditional retail stores, it is becoming a fast-growing area of business and one to strongly consider as you plan your own career. In this article, we discuss what e-commerce is and why it’s important, as well as the various types of e-commerce, advantages and frequently asked questions.
The term electronic commerce (ecommerce) refers to a business model that allows companies and individuals to buy and sell goods and services over the Internet.
– The Global Merchant
What is e-commerce?
E-commerce, also known as “electronic commerce,” is the buying and selling of goods or services electronically on the internet. It can also refer to other online activities like online auctions, ticketing and banking. E-commerce is an essential part of many businesses that rely on the sale of physical products or services online.
Here are the main kinds of e-commerce:
- Business-to-consumer (B2C): B2C is the most common kind of e-commerce. When shoppers buy something from an online store, they are involved in business-to-consumer e-commerce.
- Business-to-business (B2B): B2B is when businesses sell raw goods or parts through e-commerce to other companies that will then use those materials to create their own products.
- Consumer-to-consumer (C2C): C2C e-commerce is when consumers sell to other consumers. Sites like eBay and Craigslist are examples of this kind of e-commerce.
- Consumer-to-business (C2B): C2B e-commerce is when consumers sell their products or services to businesses.
- Business-to-administration (B2A): B2A e-commerce refers to transactions between businesses and public administration, which includes areas such as social security, employment and legal.
- Consumer-to-administration (C2A): C2A e-commerce refers to transactions between consumers and public administration, where consumers pay for services like taxes and legal document preparation.
Examples of e-commerce
In addition to different types of e-commerce, there are also different functional versions of e-commerce, distinguishable by the relationship of the transaction and the products or services being sold. The most common examples include:
- Retail: Retail e-commerce is when a product is sold directly to a customer.
- Wholesale: Wholesale e-commerce is when products are sold in bulk often to a retail company who, in turn, sells them to its customers.
- Physical products: Physical product e-commerce refers to any products that affect inventory and must be physically shipped.
- Digital products: Digital product e-commerce refers to products purchased as downloadable goods—such as books, templates or courses—
- Dropshipping: Dropshipping e-commerce is when a product is sold by one company that outsources its manufacturing and shipping to another company.
- Subscription: Subscription e-commerce is when a customer has a recurring purchase of a product or service—weekly, monthly, yearly, etc—that automatically charges them and replenishes the product.
- Services: Service e-commerce refers to services purchased and often priced by time spent on providing the service.
- Crowdfunding: Crowdfunding e-commerce is when money is collected as product capital in advance of a product being available.
Benefits of e-commerce
There are many advantages of e-commerce including:
- Increasing reach: E-commerce allows small businesses to reach a broad range of consumers. It allows all sellers to be a part of a global marketplace.
- More jobs: As these small e-commerce businesses grow, they employ more people.
- Lower operational costs: With lower operational costs—like the absence of rent, for example— small businesses have more opportunity to spend their money on other aspects of the business and grow.
- Easier and more convenient shopping: One of the major advantages of e-commerce is that it allows customers to quickly find and get what they’re looking to buy without leaving their homes.
- Allows comparison shopping: Consumers also gain power through the experience of online shopping. They can research and compare products and companies easily.
Frequently asked questions about e-commerce
Here are some frequently asked questions to help you better understand e-commerce:
Why is e-commerce important?
E-commerce is a huge part of the economy and is vital to businesses that sell their products or services online. E-commerce gives businesses the ability to reach more customers than traditional retail. With so many people making their purchases online, it is the fastest-growing retail market.
Statistics show that 96% of Americans with access to the internet have made a purchase online. E-commerce offers consumers a more convenient way to shop for the products or services they need without having to visit a retailer’s physical location to make a purchase.
What security is needed to protect consumer information when making purchases online?
When it comes to e-commerce, there are many different areas of concern in regard to online security. These issues include:
- Confidentiality
- Encryption
- Integrity (ensuring that the information is transmitted without being changed)
- Availability (that users can access the information when they need to)
- Authenticity (confirming that a user is who they claim to be)
- Non-repudiation (confirming that a sender cannot deny sending information once it has been sent)
- Auditability (ensuring that data can be audited).
E-commerce businesses can ensure this information is protected by securing their networks and implementing policies to protect their customers’ private information when making purchases.
Can e-commerce be combined with other kinds of retail?
Yes, in the form of omnichannel retailing. Omni-channel retailing refers to strategies that merchants implement that combine online shopping and shopping at a traditional retail store to provide customers with a seamless experience. More and more consumers are doing much of their shopping online but still like to have access to brick-and-mortar stores. This trend allows consumers to transition between these two models easily.
Jobs for e-commerce
If you’re interested in a career in e-commerce, there are different jobs you may consider. Here are 10 options for your career in e-commerce:
1. Web developer
2. Business analyst
3. Marketing specialist
4. E-commerce project manager
5. Customer service representative
6. SEO specialist
7. IT technician
8. Supply chain manager
9. Website designer
10. Director of e-commerce
