What is E-commerce? How it works, Its Advantages/Disadvantages : Know all about it.

What is E-commerce?

E-commerce(Electronic commerce) is an activity that involves OnlineSelling or buying products through online services or over the internet. E-commerce leverages technologies such as mobile commerce, Electronic funds transfer, Supply chain management, Internet marketing, Online transaction processing, Electronic data interchange(EDI), Inventory management software, Automated data collection systems.

Today, questions about e-commerce usually center around which channels are best to execute business online, but one of the most burning questions is the appropriate spelling of e-commerce. The truth is, there isn’t anyone that’s right or wrong, and it usually comes down to preference.



E-commerce is a form of commerce that uses the internet for at most a portion, though it may also use other technologies such as Email. Typical e-commerce transactions include the purchase of products (such as books from Amazon) or services (such as music downloads in the form of digital distribution such as iTunes Store). There are three areas of e-commerce: online retailing, electronic markets, and online auctions. Electronic business is an important part of eCommerce.

As commerce continues to evolve, so do the ways that it’s conducted.

Types of e-commerce

  • Business-to-consumer (B2C)

Business-to-consumer (B2C) is a retail aspect of e-commerce of the internet. This is the part of e-commerce that allows businesses to sell products, services, or information directly from consumers. This term was popularized during the Dott-com boom. The advent of online retailers and sellers was a novelty in the late 1990s.

Today, there are innumerable virtual stores and malls on the internet selling all types of consumer goods. The most recognized example of these sites is Amazon, which dominates the B2C market.

  • Business to Business (B2B)

B2B e-commerce refers to a business selling a good or service to another business, like a manufacturer and wholesaler, or a wholesaler and a retailer. Business-to-business e-commerce isn’t consumer-facing, and usually involves products like raw materials, software, or products that are combined. Manufacturers also sell directly to retailers via B2B eCommerce.

  • Consumer-to-business (C2B)

Consumer-to-business (C2B) is a type of e-commerce in which consumers make their products and services available online for companies to bid on and purchase. This is the opposite of the traditional commerce model of B2C.

A popular example of a C2B platform is a market that sells royalty-free photographs, images, media and design elements, such as iStock. Another example would be a job board.

  • Direct to Consumer (D2C)

Direct to consumer e-commerce is the newest model of eCommerce, and trends within this category are continually changing. D2C means that a brand is selling directly to their end customer without going through a retailer, distributor, or wholesaler. Subscriptions are a popular D2C item, and social selling via platforms like InstaGram, Pinterest, Facebook, SnapChat, etc. are popular platforms for direct-to-consumer sales.

Direct to Consumer

  • Consumer-to-consumer (C2C)

Consumer-to-consumer or C2C  is an e-commerce method that allows consumers to trade goods, services, and information online. These transactions are usually conducted online by a third party who provides an online platform for the transaction.

C2C platforms include classified ads and online auctions. Craigslist and eBay are the most well-known platforms. Because eBay is a business, this form of e-commerce could also be called C2B2C — consumer-to-business-to-consumer.

  • Consumer-to-administration (C2A)

Consumer-to-administration (C2A) refers to transactions conducted online between individual consumers and public administration or government bodies. The government rarely buys products or services from citizens, but individuals frequently use electronic means in the following areas:

Education. Disseminating information, distance learning/online lectures, etc.
Social security. Distributing information, making payments, etc.
Taxes. filing tax returns, making payments, etc.
Health. Making appointments, providing information about illnesses, making health services payments, etc.

  • Business-to-administration (B2A)

Business-to-administration (B2A) refers to online transactions between companies and public administrations or government entities. Many branches of government depend on e-services and products in some manner, especially when it is related to legal documents. These products can be delivered electronically by businesses. B2A has seen an increase in its use in recent years, as more people are using e-government.

Everybody, from freelancers to small businesses to large corporations, can profit from the ability of selling their products and services online.

These are just a few examples of e-commerce.

  1. Retail: Direct sales of products to consumers without the use of intermediaries.
  2. Dropshipping:A third party is responsible for the sale of products manufactured and shipped to consumers.
  3. ServicesThese skills include writing, coaching, and influencer marketing. They can be purchased online and paid for.
  4. Subscribe: A Popular D2C model subscription services are recurring purchases of products and services on a regular schedule.
  5. CrowdfundingCrowdfunding is a way for sellers to raise capital to help bring their product to market. After enough people have bought the product, it is then manufactured and shipped.
  6. Digital productsYou can download items such as templates, courses and e-books. However, you must purchase the media or software. These items make up a significant portion of e-commerce transactions, whether it’s software, tools, digital assets or cloud-based products.
  7. wholesale products are sold in bulk. wholesale products are typically sold to retailers who then sell them to consumers.

Advantages and disadvantages of e-commerce

Advantages of e-commerce
  • Wide availability:- Amazon’s original slogan was “Earth’s Biggest Bookstore.” This claim was possible because Amazon was an e-commerce website and not a physical bookstore that had to have each book on its shelves. E-commerce allows brands to offer a large variety of products, and then ship them from a warehouse once a purchase has been made. Customers will have greater success in finding what they are looking for.
  • Check availability:-Apart from outages or scheduled maintenance e-commerce sites can be accessed 24×7. Visitors can shop and browse at their convenience. Brick-and-mortar businesses are typically open for a limited time and may even close on certain days.
  • Access speed:- E-commerce sites are faster than physical stores. This is because they use compute and don’t have crowds.BandwidthConsiderations for both the consumer device as well as the e-commerce website. Shopping cart pages and product pages load in seconds. A transaction via e-commerce can be completed in a few clicks and takes less than five minutes.
  • International reach:- Brick-and-mortar businesses sell to customers who physically visit their stores. With e-commerce, businesses can sell to any customer who can access the web. E-commerce has the potential to extend a business-customer base.
  • Accessibility is easy:- In a physical shop, customers may not be able to identify which aisle a product is located. Visitors can search the site for the product they are looking for by browsing product pages.
  • Personalization and product recommendations:- E-commerce sites can track visitors’ browse, search and purchase history. They can use this data to present useful and personalized product recommendations and obtain valuable insights about target markets. Examples include the sections of Amazon product pages labeled “Frequently bought together” and “Customers who viewed this item also viewed.”
  • Lower cost:- Pure play e-commerce companies avoid the costs associated with physical stores such as rent, inventory, and cashiers. However, they might have to pay shipping and warehouse fees.
Disadvantages of e-commerce
  • Limited customer service:- A clerk, cashier, or manager can help customers with questions or problems in physical stores. Customer service in an e-commerce store may be limited. The site might only offer support during specific hours or the customer may remain on hold if they call a customer service number.
  • Being unable to touch or see:- Although images on a website can give a sense of the product’s quality, they are not as good as experiencing it in person. For example, you might listen to music, see the quality of a TV, or try on a shirt or dress. E-commerce may lead to consumers receiving products that are not what they expected. This can cause returns. In certain cases, the customer is responsible for shipping the item back to the retailer.
  • Security:- SkilledHackersYou can make websites that look authentic and claim to sell products well-known. Instead, customers are sent counterfeit or lost products by the site. Or, they simply collect their credit card information. Even legitimate e-commerce sites are not without risk. Customers can store credit card information with the retailer in order to make future purchases more convenient. Hackers may gain access to customers’ credit cards information if the retailer’s website is compromised.
  • Wait time:- A customer can see an item they like in a shop and pay for it. The customer then takes it home. E-commerce has a longer wait for the product to reach the customer’s doorstep. Shipping times are becoming shorter as next-day delivery is more common. However, they don’t always happen immediately.

What is Mobile e-commerce?

Mobile e-commerce (M-commerce) is a type of e-commerce on the rise that features online sales transactions made using mobile devices, such as smartphones and tablets. M-commerce includes mobile shopping, mobile banking and mobile payments. Mobile chatbots also provide e-commerce opportunities to businesses, allowing consumers to complete transactions with companies via voice or text conversations.

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