Electronic commerce, or ecommerce, generally refers to an online store that offers payment transactions or other types of sales that are completed electronically. This also includes selling, purchasing and the exchanging of services and goods in exchange for money using electronic devices that are connected to the Internet.
However, contrary to popular belief, this type of commerce does not exist only online. In fact, ecommerce has been around a lot longer than most people realize. In the 1970s, Electronic Data Interchange (EDI), occurred with business to business transactions through what was known as Value Added Networks.
Ecommerce can now be broken down into four main categories. These categories are:
- B2B (Business to Business)
- C2B (Customer to Business)
- C2C (Customer to Customer)
- B2C (Business to Customer)
Business to Business (B2B)
B2B is a type of ecommerce that deals with businesses completing transactions with each other. For example, a manufacturer may sell their products exclusively to distributors. Wholesalers selling products to retailers is another example of a B2B ecommerce transaction.
The pricing is usually based on a minimum number of orders, and the price is usually locked in for regular purchases.
Customer to Business (C2B)
A great example of a C2B ecommerce transaction is when a customer posts a project on a website, and then creates a budget and places it online. During the next hours or days, businesses can review the requirements of the project and place a bid if they are interested.
This helps to create a level of empowerment for the customer worldwide by not only providing the platform, but also the meeting ground for these types of transactions to occur.
Customer to Customer (C2C)
eBay is one of the best examples of customer to customer ecommerce. Customers sell goods to other customers through the bidding platform. The customer who bids the highest will ‘win’ the auction and receive the product.
Other auction sites, forums and classified sites are other examples of C2C ecommerce. These are areas where customers can post goods and services for sale for other customers to buy. PayPal is the most commonly used online tool to make and secure these payments between customers. They can receive and send money easily through the payment processor.
Business to Customer (B2C)
B2C is one of the most recognised forms of ecommerce. It occurs when a business sells products or services to customers and the general public through the use of online catalogues and using online software for shopping carts.
Although B2B transactions are considered more profitable because they typically deal with bulk purchases, B2C is more focused on customer satisfaction. Customers have the ease of buying what they want without having to deal with a human.
A great example of this type of transaction is if a customer is looking for a rare product, a customised piece of hardware or tickets for an exclusive holiday. Ecommerce can help consumers purchase the products they want at any time.
There are other examples of ecommerce in the government such as G2G (Government to Government) and Government to Citizen (G2C). These transactions involve activities like paying taxes and renewing licenses.
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