What is definition and Meaning of E-commerce with Type and Benefits

Meaning of E-commerce: E-commerce (electronic commerce) is the buying and selling of goods and services, or the transmitting of funds or data, over an electronic network, primarily the internet. These business transactions occur either as business-to-business (B2B), business-to-consumer (B2C), consumer-to-consumer or consumer-to-business.

The terms e-commerce and e-business are often used interchangeably. The term e-tail is also sometimes used in reference to the transactional processes that make up online retail shopping.

In the last two decades, widespread use of e-commerce platforms such as Amazon and eBay has contributed to substantial growth in online retail. In 2011, e-commerce accounted for 5% of total retail sales, according to the U.S. Census Bureau. By 2020, with the start of the COVID-19 pandemic, it had risen to over 16% of retail sales.

How does e-commerce work?

E-commerce is powered by the internet. Customers access an online store to browse through and place orders for products or services via their own devices.

As the order is placed, the customer’s web browser will communicate back and forth with the server hosting the e-commerce website. Data pertaining to the order will be relayed to a central computer known as the order manager. It will then be forwarded to databases that manage inventory levels; a merchant system that manages payment information, using applications such as PayPal; and a bank computer. Finally, it will circle back to the order manager. This is to make sure that store inventory and customer funds are sufficient for the order to be processed.

After the order is validated, the order manager will notify the store’s web server. It will display a message notifying the customer that their order has been successfully processed. The order manager will then send order data to the warehouse or fulfillment department, letting it know the product or service can be dispatched to the customer. At this point tangible or digital products may be shipped to a customer, or access to a service may be granted.

Types of E-Commerce

There are three main types of e-commerce: business-to-business (websites such as Shopify), business-to-consumer (websites such as Amazon), and consumer-to-consumer (websites such as eBay).

Here are some E-commerce examples…

1. Business-to-Business

Business-to-business, or b2b, is the practice of selling online from one business to another, in other words, wholesale.

2. Business-to-Consumer

Nowadays, a lot of e-commerce is b2c, as it’s easy for businesses to target specific consumers online. Businesses are able to put their products online, allowing the consumer to purchase the products in the comfort of their own home, saving them some precious time.

3. Consumer-to-Consumer

Remember that shirt you bought? You didn’t have time to send it back to the retailer to return, so where did it end up? At the back of your wardrobe, never to be worn by you.

Why not sell it on? Thanks to websites like eBay, you, the consumer, are able to upload images of the product and sell it on to others that may be interested in buying it.

What are the benefits of using e-commerce alongside your current strategy?

Selling on the web is quick and simple. Many people disregard buying products if they know they need to travel to the store to purchase it.

However, if they know they can stay on the sofa, sipping a cuppa, buying products that will be delivered straight to their door, they’re more likely to part with their money.

Fashion retailers are just one example of how quickly products can sell online. For example, if a customer can’t find their size in a particular store, they’re encouraged to go online.

The Benefits of E-Commerce

The internet is so big; a vast array of products can be stored on it. Unlike a brick and mortar store, there is no limit to what can be stored on the internet. Anything from CDs to beds and sofas can be bought online.

As well as this, there is no limit as to how the products are bought. Many companies are turning to social media channels, such as Facebook and Instagram, to target specific customers and push certain products.

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