Have you ever wondered what exactly is e-commerce?
That’s quite likely, because e-commerce is in fashion now more than ever. However, like many people, you may not be familiar with the exact meaning of the term, nor the differences between e-commerce and other related concepts.
The purpose of this post is to give you a precise definition of e-commerce and explain how it differs from other similar concepts. We will also review the different types of e-commerce, as well as the advantages of e-commerce compared to traditional commerce.
Are you ready to find out everything you need to know about e-commerce?
Let’s get started!
Concept: What is e-commerce?
According to Wikipedia, e-commerce, or electronic commerce, is …
“the monetary exchange of goods, services and information through computer networks, including the Internet. »
In other words, it is a business that manages payments by electronic means.
Differences between e-commerce and e-business
E-commerce and e-business are two concepts that tend to be confused. In reality, they have nothing to do with each other.
E-commerce refers only to the transaction of goods and services between a buyer and a seller. E-business, on the other hand, refers to the entire process to be implemented in order to manage an online business.
Within e-business, we find for example (links in English):
Inbound marketing
Promotions
Stock management
The SEO
Email marketing
and so on
As you can see, the concept of e-business is much broader than e-commerce. As a type of business model, e-commerce is part of e-business.
The different forms of e-business
The world of e-commerce is very vast and includes several distinct models. It is possible to make 2 classifications:
A global classification based on the business model (who sells and who buys)
Another one based on the business model.
1. Based on the business profile
Each business is directed to a specific type of customer. This allows us to distinguish the following types of e-commerce:
B2B (Business-to-Business): companies whose end customers are other companies or organisations. For example, a building material shop for architects or interior designers.
B2C (Business-to-Consumer): Companies that sell products or services directly to end consumers. This is the most common form, and there are a multitude of examples in the fields of fashion, electronics, etc.
C2B (Consumer-to-Business): portals where consumers offer a product or service that businesses can acquire. These are the classic freelance job portals such as Elance, Odesk, Humaniance, Hopwork, etc.
C2C (Consumer-to-Consumer): companies that facilitate the sale of products between consumers. The most telling examples are eBay, Leboncoin or any portal for the sale of second-hand goods between individuals.
These are the most common forms of e-commerce. There are also other types, such as G2C (Goverment-to-Consumer), C2G (Consumer-to-Goverment) or B2E (Business-to-Employer).
As we can see, e-commerce encompasses realities that go beyond a simple purchase in a shop.
2. According to the business model
The online world is still an immature industry. Technological changes are constant and new online businesses are responding to new needs.
The type of e-commerce can be differentiated according to the income generated or the way in which the exchange between buyer and seller takes place:
Online shop with its own products: this is the first thing you think of when you think of e-commerce. The same characteristics as a physical shop, in an online version.
Dropshipping: for the customer, it seems to be a normal e-commerce. The difference comes from the fact that it is a third party that sends the product, not the seller. To learn more about dropshipping, we advise you to read our complete dropshipping guide (in French).
Affiliate E-commerce: Affiliate businesses go even further than dropshipping. In this case, not only does the shop not send the product, but the sale does not take place on its platform. E-commerce redirects the customer to another shop that pays him a commission once the sale is concluded. Affiliation with Amazon is the most common. For example: Biodegradable.es. If you are interested in these models, please read our articles on marketing.