Which of the following is the correct description of electronic business?

Some people use the terms "e-business" and "e-commerce" interchangeably, but they aren't synonymous. To put it simply, e-commerce refers to buying and selling online, while e-business encompasses all business conducted online. E-commerce can be viewed as a subset of e-business. If you plan on starting or working closely with an internet-based company, you should strive to understand all the ways these two concepts are unique.

E-Business Basics

In a tech-driven world, it might be tough to tell which businesses are truly e-businesses. Perhaps the best way to understand e-businesses is with the help of examples:

• Email marketing to existing and/or prospective customers is an e-business activity. It electronically conducts a business process—in this case, marketing.
• A company that builds and sells an online system that tracks inventory and triggers alerts at specific levels is an e-business. Inventory management is a business process, and when facilitated electronically, it becomes part of e-business.
• A content management system that manages the workflow between a content developer, editor, manager, and publisher is another example of an e-business. In the absence of an electronic workflow, the physical movement of paper files would conduct this process. By electronically enabling it, it becomes an e-business.
• Online tools for human resources can be produced by an e-business. These tools include online job boards, application processers, and systems that collect and maintain data about employees.

Many processes that are described as e-business might be handled in-house through a company's network, or it might be something the company outsources to a provider that specializes in whatever service is desired. By producing them in-house, standard businesses may incorporate some elements of e-business into their plan—the two types of businesses are not mutually exclusive.

Sometimes the difference between a standard business and an e-business is just a matter of how business is conducted. For example, if you are an advisory firm helping people choose the right furniture, then you are a business, but if you run a website where people can compare furniture options, then you are an e-business.

E-Commerce Basics

Compared to e-business, the definition of e-commerce is clearer. In its basic form, it involves placing orders and making payments online. E-commerce comes in multiple forms. In business-to-consumer (B2C) e-commerce, a business sells goods and services to consumers through its website. Many brick-and-mortar retailers have adapted to the popularity of e-commerce, and they now conduct sales through their websites as well as in their stores.

E-commerce sales can include every element of a sale: ordering a product, paying for a product, and having it delivered. It might also involve only part of the process. For example, a customer might order a product online to be picked up at the store. Payment might be conducted online or at the store when the item is picked up. Either way, the transaction still involved an element of e-commerce.

Many businesses also sell through virtual marketplaces in addition to their own websites. For example, a popular brand like Nike will sell shoes from its website, as well as through an online retailer like Amazon. Whether you buy it from Nike's website or Amazon's, the transaction is still an example of e-commerce.

Business-to-Business (B2B) E-Commerce

While the average consumer might not realize it, much of the e-commerce that takes place around the world involves B2B relationships. This type of e-commerce often involves transactions like restocking necessary supplies, and very often it will be automated. For example, a landscaping company could have a contract with an e-commerce company to remain stocked on items like garden shears, gloves, and fertilizer. To maintain efficiency, the landscaping company might have an automated process in place to track supply levels. As crews use fertilizer on the customers' yards, and the inventory drops below a set level, an automated system will place an order for more.

Ecommerce, also known as electronic commerce or internet commerce, refers to the buying and selling of goods or services using the internet, and the transfer of money and data to execute these transactions. Ecommerce is often used to refer to the sale of physical products online, but it can also describe any kind of commercial transaction that is facilitated through the internet.

Whereas e-business refers to all aspects of operating an online business, ecommerce refers specifically to the transaction of goods and services.

The history of ecommerce begins with the first ever online sale: on the August 11, 1994 a man sold a CD by the band Sting to his friend through his website NetMarket, an American retail platform. This is the first example of a consumer purchasing a product from a business through the World Wide Web—or “ecommerce” as we commonly know it today.

Since then, ecommerce has evolved to make products easier to discover and purchase through online retailers and marketplaces.  Independent freelancers, small businesses, and large corporations have all benefited from ecommerce, which enables them to sell their goods and services at a scale that was not possible with traditional offline retail.

Global retail ecommerce sales are projected to reach $27 trillion by 2020.

Types of ecommerce models

There are four main types of ecommerce models that can describe almost every transaction that takes place between consumers and businesses.

1. Business to Consumer (B2C): When a business sells a good or service to an individual consumer (e.g. You buy a pair of shoes from an online retailer).

2. Business to Business (B2B): When a business sells a good or service to another business (e.g. A business sells software-as-a-service for other businesses to use)

3. Consumer to Consumer (C2C): When a consumer sells a good or service to another consumer (e.g. You sell your old furniture on eBay to another consumer).

4. Consumer to Business (C2B): When a consumer sells their own products or services to a business or organization (e.g. An influencer offers exposure to their online audience in exchange for a fee, or a photographer licenses their photo for a business to use).

Examples of ecommerce

Ecommerce can take on a variety of forms involving different transactional relationships between businesses and consumers, as well as different objects being exchanged as part of these transactions.

1. Retail: The sale of a product by a business directly to a customer without any intermediary.

2. Wholesale: The sale of products in bulk, often to a retailer that then sells them directly to consumers.

3. Dropshipping: The sale of a product, which is manufactured and shipped to the consumer by a third party.

4. Crowdfunding: The collection of money from consumers in advance of a product being available in order to raise the startup capital necessary to bring it to market.

5. Subscription: The automatic recurring purchase of a product or service on a regular basis until the subscriber chooses to cancel.

6. Physical products: Any tangible good that requires inventory to be replenished and orders to be physically shipped to customers as sales are made.

7. Digital products: Downloadable digital goods, templates, and courses, or media that must be purchased for consumption or licensed for use.

8. Services: A skill or set of skills provided in exchange for compensation. The service provider’s time can be purchased for a fee.

What is E-commerce FAQ

How much does it cost to start a ecommerce?

The cost to start an ecommerce business can vary depending on the type of business you’re starting, the services and products you offer, and the platform you choose to use. Generally, you can expect to spend anywhere from a few hundred dollars to several thousand dollars to get your ecommerce business started.

What are the 4 types of ecommerce businesses?

• Business-to-Business (B2B) eCommerce: This type of eCommerce involves online transactions between businesses. The businesses may be suppliers, manufacturers, distributors, wholesalers, retailers, or any other type of business.
• Business-to-Consumer (B2C) eCommerce: This involves online transactions between businesses and consumers. Examples of B2C eCommerce include online retail stores, online streaming services, and online marketplaces.
• Consumer-to-Consumer (C2C) eCommerce: This type of eCommerce involves online transactions between individual consumers. Popular examples of C2C eCommerce include eBay, Craigslist, and peer-to-peer marketplaces.
• Consumer-to-Business (C2B) eCommerce: This type involves online transactions between individual consumers and businesses. Popular examples of C2B eCommerce include freelance websites like Upwork and Fiverr.

Is e-commerce profitable?

Indeed, e-commerce as a business model can be very profitable. Some e-commerce businesses can make millions of dollars in profits each year. It is important to note that e-commerce is a highly competitive industry, so it takes a lot of hard work, dedication, and creativity to make a profit.

Can you make a living off e-commerce?

Many people make a living off running an ecommerce business. You can earn money by selling products, providing services, or creating digital products and selling them on your own website. A person can also start an affiliate business, where you earn a commission for referring customers to another business. Using the right strategies and a bit of hard work, it is very possible to earn enough to make a living from ecommerce.

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