eCommerce terms like B2B and DTC get thrown about a lot, but the exact meaning of eCommerce may be unclear. Fear not, this article holds the answers to your eCommerce questions. Here you will discover what eCommerce is, an explanation of its various business models, and 9 ways eCommerce will empower your existing or new business..
What Is eCommerce and Short History.
A simple definition of eCommerce is “the process of buying and selling online.” eCommerce has a short definition, but it is dramatically changing the way consumers shop and buy things. Surprisingly, all of this has happened in the last 20 years. Now, as of 2022, 80% of the U.S. population shops online and over 50% of shoppers prefer to shop online (click here for more shopping online stats). To detail, below is a short eCommerce history (click here for more detailed history timeline):
- 1960s. Large corporations started using data communications to exchange electronic business documents (ex. purchase order, bill of lading or manifest, invoice, etc.). Namely, businesses started leveraging new digital communications technologies as part of their procurement and transportation processes. As a result, this exchange of electronic business documents became know as Electronic Data Exchange (EDI).
- 1990s. For consumers, all the building blocks for ecommerce were forged with the start up of companies like Amazon, originally an online book seller, and PayPal, an electronic payment company. Secondly, the web browser was invented that included Secure Socket Layer (SSL) to enable the sending and receiving side of online transactions securely through encryption. Finally, businesses and consumers started to have access to cheap Internet.
- 2000s. Starting in the aftermath of the DotCom bust, ecommerce began to mature perfecting its ecommerce business models and platforms. This was because technology and eCommerce capabilities continued to evolve. Hence, both small and large businesses began to use ecommerce successfully to reach consumers anywhere, anytime.
The Meaning of eCommerce – B2B, B2C and other Acronyms Explained.
One reason eCommerce is hard to understand is it uses a lot of acronyms like B2B and B2C. To explain, these acronyms refer to eCommerce business models that describe the relationships between buyers and sellers. For details on key eCommerce business models, below is a description of each and what they mean with examples:
Business to Consumer (B2C) Explained.
This is the most frequent eCommerce business model today. To detail, this is where both large and small businesses sell goods or services to individual customers. Additionally, most of these eCommerce transactions occur on a secure web browser using shopping cart software. For example, Amazon or any retailer who sells something online to a consumer.
Business to Business (B2B) Explained.
This is where businesses sell products or services to other businesses. Whereas B2C deals almost exclusively with small purchases bought by consumers via shopping cart software, B2B eCommerce transactions typically have a higher order value and more recurring purchases. In particular, these types of eCommerce transactions can be supported by a shopping cart, EDI, or some type of eCommerce portal. Thus, business customers can both electronically place orders and receive invoices for payment. For example, Tesla car manufacturer orders a car navigation system from Garmin, the supplier of GPS technology.
Direct to Consumer (D2C) Explained.
This is similar to B2C in that businesses sell to consumers, but the difference is that the manufacturer is selling directly to the consumer. Previously before eCommerce, most manufacturers sold their goods through wholesalers and retailers. For example, Apple and the Apple Store and The Dollar Shave Club sell their products directly to consumers.
Consumer to Consumer (C2C) Explained.
This is very similar to B2C, but it is at the micro-level where consumers occasionally sell stuff to other consumers. Sometimes if a “consumer” becomes successful at selling online on a regular basis, they would then become a business following the B2C model. For example, a consumer on eBay or Craigslist sells infrequently to other consumers.
Also, see Oberlo’s eCommerce, and Salesforce’s What Is eCommerce? for more details on eCommerce business models and processes. In addition for more on examples of eCommerce types, see SC Tech Insights’ 3 Supply Chain Types: Fundamentals And Examples Of Reasons Vulnerable.
Meaning of eCommerce – The Benefits eCommerce Will Bring To Your Business.
Millions of people are starting up eCommerce businesses, but why? Also, how is an eCommerce web presence going to help your existing business or for starting a new business? To explain, see SC Tech Insignts’ The Best Benefits Of eCommerce For Traditional Business To Exploit.
The Best Benefits Of eCommerce For Traditional Businesses To Exploit. Discover the many benefits eCommerce has to offer, whether you’re a large or small business. It’s time to unlock your business’ full potential. Click here for an eCommerce primer on the benefits as well as challenges of running an eCommerce business. Moreover, there are benefits of eCommerce for both your business and your customers. Also, discover the similarities and benefits of operating both an online and traditional “brick and mortar” business.
For more information from Supply Chain Tech Insights, see articles on Supply Chain.
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