E-Commerce or Electronic Commerce (EC) is the practice of buying and selling various good and services on the World Wide Web (Internet). e-Commerce in its basic sense means the same as traditional trading where buyers and sellers come together for doing business. The difference is that e-Commerce happens over wired communication lines connected throughout the globe where the World Wide Web serves as the central medium for all trading transactions.
With this, you have to simply hit the service provider’s website, search for what you need or setup what you want to provide and instantly get the business done. If you are making purchases online for virtual products and services, most of the time you will get them at the instance of your payment acknowledgment.
Monetary transactions happen over secure gateways and encrypted channels, so we can term e-commerce to be a reliable trading environment. Payments can be made with the use of credit cards, e-Checks, payment gateways or even through traditional payment systems.
Types of e-Commerce
Business to Business (B2B)
Business-to-Business e-commerce has been around for some time. Over 90% of all e-commerce transactions on the Internet are B2B. B2B enables automating transactions between trading partners for business efficiency. B2B is also known to be Electronic Data Interchange (EDI).
Business to Consumer (B2C)
Business-to-Consumer is considered to be one of the best things to happen for e-commerce and the Internet. It continues to grow by leaps and bounds with every passing day. Popular websites such as Amazon have cashed in over the rise of purchases that happen over the Internet. B2C involves direct selling to the consumer over the Internet. The service or product that is being sold does not necessarily be virtual or intangible, but as a matter of fact most transactions that happen are related to tangible goods.
Consumer to Business (C2B)
Consumer-to-Business model is a complete reversal of Business-to-Consumer model. In this case, a consumer offers goods or services to companies and the companies pay for them. We can see examples of C2B in forms of affiliate marketing, answering online polls for companies, being a free lance developer, etc.
Business to Employee (B2E)
In a Business-to-Employee set up, companies offer products or services to their employees in an intranet environment. B2E typically is used for automating employee-related work processes. Examples of B2E applications can be seen in online insurance policy management for employees, offers and rewards program for employees, etc.
Consumer to Consumer (C2C)
In Consumer-to-Consumer e-commerce a third party builds a transaction bridge between two or more consumers involved. Online auctioning can be considered to be a good form of Consumer to Consumer e-commerce model where consumers set up sale of goods and services for others to bid and win the specific item or service. The third party which connects consumers charges a nominal fee for their services. They are in no way related to the goods and services being sold or bought and they are not responsible for quality and other such factors.
Advantages of e-Commerce
100% Business Uptime
E-Commerce systems are available for people for 24/7. They never take a break or close down for the day or take public holidays.
e-Commerce systems can be accessible by any one using the Internet.
Quick Response Time
Transactions can be handled over the Internet instantaneously without high response times, most of the time much faster than offline systems. Messages are delivered to the end of the globe at the snap of a finger, enabling quick transactions.
e-Commerce is very cost-efficient and economical. General costs of running a business otherwise are far higher than those operated with the help of technology and e-Commerce. Staffing, middlemen, overhead costs, etc., can be reduced drastically making business handling and administration much easier. Most of the transaction procedures can be automated without any human intervention.
Disadvantages of e-Commerce
Physical goods take some time to reach your home when you buy them online whereas if you go to the local store, you can get them instantly. Delivery times may range anywhere from a day to even a month. Moreover, perishable goods cannot be considered to be shipped for such long delivery times as they tend to get spoiled during transit.
Most customers and businesses are hesitant to do transactions online. This is due to the fact that if a person wants to physically inspect the service or goods he is paying for, he is unable to do so. Moreover, some people are accustomed to shop with family and friends and hang out to malls and big outlets.
Online safety is a critical factor that most people consider before even thinking of performing commercial transactions. Customers and businesses should be assured of privacy implications, confidentiality, and security. An amount of trust has to be developed before starting or involving into transactions.