Electronic commerce, also known as E-commerce or Ecommerce is nowadays understood as any kind of business or transaction that takes place over the Internet. However, its scope goes further than that since as a matter of fact all transactions carried out exclusively through electronic means can be considered e-commerce.
This type of electronic commerce is classified in four depending on the parties involved in the transaction:
- Business-to-business (B2B): Approximately 90% of all electronic commerce transactions globally fall in this ecommerce category. It refers to the businesses between wholesaler and retailer or between manufacturer and wholesaler.
- Consumer-to-business (C2B): This is a sector at its early stages. However, it is rapidly and successfully growing. In this model, the customer sells goods and services that offer a competitive advantage to the company’s product. Bloggers are a great example who are paid to post reviews about an specific product or service.
- Business to Consumer (B2C): As its name indicates in this type of ecommerce, transactions are conducted between wholesalers or retailers and their customers. The best example of B2C is Amazon, the world’s largest online retailer.
- Consumer-to-consumer (C2C): This model works through websites that make it possible for customers to sell their possessions online either by paying a small fee or for free. The details of the products for sale are published on the website and the customers that get to see the advertisements may buy the products. Examples of this kind of ecommerce model are eBay and paipai, among many others.
Among the major benefits of electronic commerce are the following:
- No time or geographical constraints
- Reduction of transaction costs
- Rationalization of operations
- Facilitation of price comparison
- Provision of plentiful product information