eCommerce Defined

eCommerce (or electronic commerce) refers to the buying/selling of goods and services using the internet. It invovles transferring money and data electronically.

When did it all begin?

Many believe that the first purchase ever made online was by a man in Philadelphia who purchased a Sting album. This sale was the first to be protected by encryption tech, though Pizza Hut also often gets credit for the first eCommerce transactions (they’ve been selling online since ’94!).

Different types of eCommerce merchants

Physical stores selling online

Many stores have physical retail locations, but also offer the ability to shop online. Stores like this can either ship the order to the shopper, or you can pick the item up in a location nearby.

Online only stores

Today a lot of stores only sell online so they don’t have to worry about the overhead of owning and operating a business in a brick-and-mortar sense. These stores ship products directly to their consumers.

Online services

Some services can be bought and sold online. These include online consultants, freelancers and even some classes. These also don’t have retail locations, and therefore don’t involve the shipment of goods anywhere. One can download the service or ‘e-good’ and have immediate access to it, or the service can be completed remotely (like coding new features into your website).

Types of eCommerce based on who is involved

Business to consumer (B2C)

Transactions involve a business and a consumer. The business sells the product to the consumers.

Business to business (B2B)

Transactions involve two businesses. An example of this is the company Square, who offers payment solutions for small- and medium-sized businesses.

Consumer to business (C2B)

Consumers sell or contribute monetary value to a business. Crowdsourcing campaigns (think: Kickstarter) are considered C2B eCommerce.

There are a few other forms of eCommerce like government to business, business to government and consumer to government. These are not typical relationships in the eCommerce world, but they still exist.

eCommerce platforms

There are many different platforms that exist where one can create an eCommerce store. A few of the big players right now are Shopify, BigCommerce and WordPress.

Online Marketplaces

Another important feature of electronic commerce is the existence of online marketplaces. Some big ones are Amazon and eBay, but other companies like Facebook’s Marketplace, Kijiji, Etsy and Alibaba are also thriving. These online marketplaces facilitate transactions between merchants and their customers. The marketplace itself doesn’t have inventory (except for Amazon) and rather they connect different buyers and sellers to one another to allow them to do business.

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