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The Meaning Of ECommerce – Stunning Ways This Technology Helps Businesses

Marketers will confuse you in a minute on the meaning of eCommerce. Do not lose hope, the answers to your eCommerce questions are in this article. Answers include what eCommerce is, explanation of various business models (B2B, B2C, etc.), and 9 ways it will help your existing or new business, big or small.

What Is eCommerce and Short History.

Meaning of ecommerce - From Bookseller to eCommerce King
Jeff Bezos – From Bookseller To Ecommerce King

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). 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.). This was due to businesses using data communications 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 Models and Relationships – B2B, B2C and other Acronyms.

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. 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. 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. Example: Tesla car manufacturer and 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. Example: Apple and the Apple Store, The Dollar Shave Club.

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. Example C2C: eBay or Craigslist seller. 

See Oberlo’s eCommerce, and Salesforce’s What Is eCommerce? for more details on eCommerce business models and processes.

Meaning of eCommerce – 9 Ways eCommerce Will Help Your Business.

Millions of people are starting up eCommerce businesses, but why? How is an eCommerce web presence going to help your existing business or for starting a new business?

  1. Gain Business Visibility. The internet is an opportunity for your business to get visibility to any target audience. Of course, this is highly dependent on your business getting potential customers to click on a link to go to your site. 
  2. Lower Startup Costs. Usually an eCommerce web site is going to cost a lot less than a tradition “brick and mortar” store. Unquestionably, this includes less staffing and inventory carrying costs.
  3. Sell Any Time, Any Where. eCommerce platforms are fully automated where a business can sell any time, anywhere. Naturally, there are now no geographic barriers or closing hours. 
  4. Delight Your Customers. Customers can browse, select, and pay for goods and services any time at their convenience. Specifically, this can include providing in-store pickup, online orders, enabling many payment methods, and a wide range of shipping options to delight your customer. 
  5. Increased Product Selection / More Choice. An online eCommerce presence enables a business to offer customers more selection than a standalone store front. Obviously, businesses that are online can offer more products and services at lower costs. Another fact is that eCommerce sites have more revenue opportunities. Namely this includes digital products (e-books, audiobooks, software), drop ship (no inventory), white label (re-packaging / branding existing product), private label (use a contracted manufacturer), or provide subscription services (recurring orders like meal prep services, fashion boxes, or health and grooming products).
  6. Promote Your Brand. An eCommerce web site gives your business a way to share your vision, maintain transparency with customers by stating your policies, and earn the trust of your shoppers. Further, you have more opportunities to tell your brand’s story, increase your business reputation, and market strategically. Also, there are countless ways to promote your brand to include leveraging eCommerce platform resources and using a web developer to create and expand your branding. 
  7. Streamline Your Business Operations. There are many eCommerce platforms that you can leverage their resource to manage your inventory, orders, customers, sales channels, plan & implement marketing strategies.
  8. Strengthen Your Customer Relations. An eCommerce site enable your customers to see the details of the product or services you are selling.  You have more ways to communicate with your customers to include online chat to resolve customer queries and strengthen your relationship with your customers.
  9. Reach New Prospective Buyers. eCommerce analytics tools enable you to reach more potential customers. You can collect consumer data including their demographics that can be used for targeted marketing. You can better understand your customers and use online marketing tools to reach them.

For more details on eCommerce see Builderfly’s What is the Purpose of eCommerce Website, Investopedia’s eCommerce, and PageFly’s Ecommerce Meaning And How To Begin In 2022.

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