What is an E-Commerce business?
How did people shop a decade back?
And how do they shop now? Especially now, when many shops have been locked down due to the CoronaVirus pandemic?
Shopping in such conditions is possible due to ‘E-commerce’.
Electronic commerce or e-commerce as we know it is the process of buying and selling goods or services electronically i. e. via the Internet. Hence it is also known as internet commerce. It also involves the transfer of money and data required to complete the transactions. Thus, it is a business model by which businesses and consumers can carry out transactions of buying and selling between them, through the use of the internet.
Since its beginning in the early 1990s, e-commerce has evolved a lot and has made it easy for consumers to find products and purchase them online from various e-commerce businesses.
The various forms of e-commerce businesses involving the transactional process include –
- Wholesale: Wholesale e-commerce businesses include the sale of products in bulk, mostly to retailers. The retailers then further sell to the consumer.
- Retail: In Retail e-commerce business products are sold directly to the consumers without involving any intermediaries.
- Dropshipping: In Dropshipping, Businesses don’t store their products after manufacturing. They sell the products and the sales orders to a third party. The third party then ships the orders to consumers.
- Crowdfunding: Crowdfunding is getting the funds or the startup capital by receiving the payment from the consumers in advance. The product is then created, brought to the market, and shipped to the consumers.
- Subscription: Subscription is the recurring purchase of products/services on a regular basis. The purchase is mostly automatic and can be canceled at any time by the consumers.
- Services: This includes skills or a set of skills like coding, writing, teaching, etc. that can be purchased online. Thus the payment is usually made for a specific time of the skilled individual.
- Digital products: they include digital products like software, tools, media, templates, ebooks, etc. That needs to be purchased with money and used by downloading.
Other than these forms, comparison websites like Gobazzar too is a part of the e-commerce business model they work as the intermediary between e-commerce businesses and consumers. They help consumers get price comparisons for products and help e-commerce businesses by giving them exposure. E-commerce can be carried out in different ways as below-
- B2B or Business to Business: B2B e-commerce business model is where goods or services are sold from one business to another. Thus, the consumers are not involved. Manufacturers selling to retailers or manufacturers buying raw materials for the manufacturing process, etc. fall under this model.
- B2C or Business to Consumer: B2C e-commerce business model is where goods or services are sold from a business to consumer. An example would be online retailers from whom consumers purchase any product.
- C2B or Consumer to Business: C2B e-commerce business model is where an individual sells a product or service to a business. Examples include freelancers or consultants offering their services or influencers offering exposure to businesses, etc.
- C2C or Consumer to Consumer: C2C e-commerce business model is where consumers sell goods or services to other consumers. eBay, Etsy, etc. are some examples of this model.
- D2C or Direct to Consumer: D2C is the latest e-commerce business model where brands directly sell to consumers. Thus, there is no intervention of wholesalers, dealers, retailers, etc. A subscription is a form of D2C e-commerce business. In D2C, brands also do social selling i.e. selling directly to the consumers from the various social media platforms.
This is what the e-commerce business is all about – how it operates, what are its types, its forms, and models.
