What Is E-Commerce? Definition, Types & Getting Started

It’s the reverse of the traditional B2C (Business-to-Consumer) model, where businesses sell products or services to consumers. E-commerce, also known as Electronic Commerce, refers to the purchase and sale of goods and services through the Internet. The first online transaction occurred in 1994 when a guy sold a Sting CD to a friend via his website Net Market, an American retail platform. This is the first case of a consumer purchasing a product from a business over the World Wide Web, sometimes known as e-commerce. After that, e-commerce evolved to make it easier to locate and purchase products through online merchants and marketplaces. Now that you know what ecommerce businesses, product options, platforms, and business classifications exist, you’re ready to get started.

Some may also implement transaction rates, which typically apply every time a seller makes a successful sale. The transaction may happen on an online store, business website, marketplace, or other web applications. In addition to crafting what type of e-commerce company a business wants to be, the business must decide how it wants to make money. Due to the unique nature of e-commerce, the business has a few options on how it wants to process orders, carry inventory, and ship products. E-commerce actually goes back to the 1960s when companies used an electronic system called the Electronic Data Interchange to facilitate the transfer of documents. This involved the sale of a CD between friends through an online retail website called NetMarket.

Value Delivery Methods for Ecommerce Innovation

For vendors with integrated payment processing, Shopify’s Shopify subscription has the cheapest fees (2.6% plus 30¢ per transaction). Other e-commerce platforms use Stripe or Square, which charge 2.9% plus 30¢ per transaction. But, some solutions like Ecwid or Shift4Shop let retailers choose from many payment gateways, which can result in lower processing fees. Ecommerce Software Solutions Aside from Shift4Shop (which requires retailers to process $500 monthly), competitors charge $14 to $89 more for an e-commerce subscription. We were pleased with Weebly Professional’s features, which include fast checkout, item badges and multiple coupon options. Its marketing tools (pop-up notification, SEO tools and lead capture forms) are a nice bonus.

So, while dropshipping can save you time and money, it’s important to remember that you still need to maintain strong customer relationships and handle any support requests that come your way. Not every business can manufacture its own products or maintain its own inventory and warehouses. Now that you’ve figured out which eCommerce model is the perfect fit for your business, it’s time to focus on the delivery method that meets your needs. Just like B2A, C2A eCommerce can help governments streamline their operations, reduce costs, and improve the quality of their services by leveraging digital technologies. According to the stats, the global B2B eCommerce market is expected to reach over $18 billion by 2027, highlighting the significant role this model plays in the global economy.

The best e-commerce platforms for 2024

It allows five staff accounts and unlimited products to ship from up to 1,000 inventory locations. Business-to-Consumer (B2C) eCommerce model allows businesses to sell products or services directly to their end users. It typically involves smaller transactions and a focus on marketing to individual consumers. Today, there are different types of eCommerce markets, revenue models, websites and software.

Such platforms charge a service fee to either the individual or the company. This online marketplace allows Facebook users living in the same region to buy and sell from one another. With the C2C type of eCommerce, a business provides an online platform for consumers to buy and sell from each other. Learning about the types of ecommerce can help you determine what model is right for your business. Private labeling is a more appropriate e-commerce approach for companies that may not have large upfront capital or do not have their own factory space to manufacture goods. Private label e-commerce companies send plans to a contracted manufacturer who makes the product.

Consumer to Business (C2B)

Zoho Commerce is a great option for small and medium-sized businesses that are looking for a comprehensive yet affordable e-commerce solution. Its user-friendly interface and integration capabilities make it an excellent choice for entrepreneurs https://www.globalcloudteam.com/ and businesses looking to streamline their online operations. Zoho Commerce has positioned itself as an e-commerce platform for businesses aiming to optimize their online selling experience while staying within budget constraints.

Our partners cannot pay us to guarantee favorable reviews of their products or services. We believe everyone should be able to make financial decisions with confidence. Online communities bind together participants who wish to share their knowledge, forge lasting relationships, or present themselves on a broad forum. Yes, a hybrid ecommerce platform can meet the needs of B2B and B2C markets.

Shopify — Basic

This model relies on the successful bidding of government contracts. A government agency will typically put up a request for proposal (RFP) and ecommerce businesses will have to bid on these projects. Perform a focus group on the target market before beginning any business setup. Ask people about their needs, values, willingness to pay for your product, and how frequently they may want to repurchase.

• Security underlies another important aspect of e-commerce, that of privacy.
• In addition to receiving commissions generated through affiliate marketing, we are able to fund our independent research and reviews at no extra cost to our readers.
• Typically, the goods and services are for business use only, such as to support productivity, collaboration, office needs, or the production process.
• Regardless of your store’s size, any number of team members can manage inventory, view customer notifications or handle marketing.
• So regardless of what kind of business you want to open, from an online clothing store to selling your work online, we have provided some real-life examples to see what they look like in practice.
• He works with the manufacturer Art of Tea to create unique tea blends for his products and uses his own branding on his sales channels.

An example of this plan is of influencers that sell white-label products through their social media accounts. Dropshipping is a retail method where a store doesn’t keep the products in stock. Dropshipping, in short, is an inventory-free retail model where your suppliers take care of most of the manual work for you – the inventory management and delivery.

B2C: Business to Consumer Ecommerce

Consumer-to-consumer businesses, also known as marketplaces, establish a foundation to connect consumers and let them exchange goods and services. This business typically makes money by charging listing or transaction fees. Also, you’ll need to pay $59 per month to enjoy unlimited storage, which can withstand a content-heavy e-commerce store. Shopify’s higher plans offer advanced features such as analytics and reports, and you’ll pay lower fees on transactions, credit card processing and shipping. It works like a physical store—customers visit your e-commerce store to browse your products and make a purchase.

A company can sell to its customers, other businesses or the government. Customers can also sell to businesses, government agencies or other customers. However, there are four primary types of e-commerce that describe the electronic transactions that can take place over the internet.