E-Commerce: Meaning, Types, Advantages and Disadvantages
What is Commerce?
Commerce is the formation of a large-scale interchange and trading of goods and services into money or monetary value between economic agents, i.e. producers and consumers. It includes all activities that directly or indirectly affect the exchange procedure. It works on the standard that whatever is produced must be consumed. Commerce is important because it assists satisfy the demands and requirements of people.
What is E-commerce?
E-commerce means Electronic Commerce. It has developed rapidly in the last few years. It is the buying and selling of goods and services, or the transmitting of funds or data, over an electronic network, primarily the internet. It as a dynamic set of technologies, applications and business processes.
- It is the process of buying and selling of goods or services using an electronic medium such as Internet.
- It is referred as a paperless exchange of business information using EDI, E-mail, Electronic fund transfer etc.
- An efficient mechanism for advertising and distributing product information.
- It covers almost all the aspects of a business, from advertising and marketing to sales, ordering, manufacturing and distributing.
- It refers to companies and individuals who buy and sell goods and services over the Internet.
- It is operated in different types of market segments and can be efficiently conducted over computers, tablets, smartphones, and other smart devices.
- It has given the facility of making online transactions.
- Producers and customers are not required to talk face to face or customers are not required to go to shops for buying products or services.
- They may get their required products or services staying in their houses.
Difference between Traditional Commerce and E-commerce
|Business hours are limited, mostly done during the daytime||Business hours are 24X7, can be done anytime day and night|
|Provides face to face interaction||Provides screen to face interaction|
|Focuses on personal interactions, so it is manual||Online via internet, so it can be considered automatic|
|High overhead cost||Less overhead cost|
|Limited to a local or particular geographical location||No physical limitation, globally and widely circulated|
|Payment modes are cash, cheques and credit cards||Payment modes are bank transfer, credit card, e-wallet, mobile payment etc.|
|Instant delivery of goods and services||Delivery of goods or services takes some time|
|No better connectivity||Better connectivity|
|Takes time in analysing the customer feedback||Immediate analysis of customer feedback|
Types of E-commerce
The most common participants in E-Commerce are the people associated with administration, government and consumers. When we think of e-commerce, we think of an online commercial transaction between a supplier and a client. The following are the different types of E-commerce platforms:
- Business sells their products directly to a customer.
- A customer can view the products shown on the website.
- The customer can choose a product and order the same.
- The website will then send a notification to the business organization via emai.
- The organization will dispatch the product/ goods to the customer.
- These B2C businesses are online retailers, e.g. Amazon, Flipkart etc.
- It is distinguished by the establishment of electronic business relationships between businesses and final consumers.
- It corresponds to the retail section of e-commerce, where traditional retail trade normally operates.
- Most common types of e-commerce.
- A transaction of goods or services occurs between two businesses.
- This is the e-commerce between Companies.
- It deals with relationship between and among businesses, e.g. Indiamart, Alibaba, Amazon Business, Affiliate Marketing etc.
- Business sells its products to an intermediate buyer who then sells the product to the final customer.
- It involves the conduct of trade between two or more businesses/companies.
- It covers almost all electronic transactions of goods or services conducted between companies.
- Consumer helps consumer to sell their assets like residential property, cars, bikes etc.
- Consumer helps consumer to rent a room by publishing their information on the websites.
- Website may or may not charge the consumer for its services, e.g. OLX, Quikr,
online auction etc.
- It covers all electronic transactions of goods or services conducted between consumers.
- These transactions are conducted through a third party, which provides the online platform where the transactions are actually carried out.
- It is leveraged by a consumer for selling used goods or services to other consumers through the digital platform.
- Consumers have products or services of value that can be consumed by businesses, e.g. the comparison of interest rates of various loan types provided by different banks via websites.
- A business organization who fulfills the consumer’s requirement within the specified budget, approaches the customer and provides its services, e.g. A blog can be written by an author for a business to improve sale of products. IT freelancer who demos and sells his software to a company.
- C2B model is the exact reversal of a B2C model.
- It provides the end consumers with an opportunity to sell their products/services to companies.
- The method is popular in crowdsourcing based projects.
- Businesses are buying from solo consumers, although more often than not those consumers are operating a business of their own.