E-Commerce

Joran Hofman
March 6, 2021

What Is E-commerce? 

E-commerce, also called electronic commerce or internet commerce, refers to the form of business that consists of selling a product or service through the use of the Internet and involves the exchange of data and money to carry out the transaction.

How Does An E-commerce Work? 

The way E-commerce works sometimes vary by the type of software used in the online store, but in general, it does so with the following elements:

WEB HOSTING

Every online store must have a hosting server. Currently, some providers include it within their shopping cart service.

COMMERCE INTERFACE

This tool is used to manage an online store and to configure other elements. It is worth noting that if the interface is simple, the tasks can be done more easily.

PRODUCT CATALOG

It is the part where customers can see the products or services offered by an online store.

SHOPPING CART

The shopping cart is where customers can place the products they want to buy, in it appear site data and delivery method, as well as the amount to be paid for the purchase, taxes, among others.

PAYMENT PROCESSING

This part is essential for the management of an online store; without it, customers can not purchase products and process payment for them. For this, there are various payment platforms that process payment methods such as debit or credit cards, electronic payments from platforms such as PayPal, Skrill, and similar cryptocurrencies, among others.

What Are The Types Of E-commerce?

There are several types of E-commerce models, some of the most well known are mentioned below:

Business to Consumer (B2C)

In this E-commerce model, a company sells a product or service to a final consumer.

Business to Business (B2B)

In this case, a company sells a product or service to another company. A clear example would be when a company sells raw material to be used by other companies.

Consumer to Consumer (C2C)

It is when a consumer sells a good or service to another consumer. An example would be when a person sells a used electronic device to another person on eBay.

Consumer to Business (C2B)

This happens when a consumer makes a sale of his or her products or services to a business. An example would be when a graphic artist gives the rights to a design to a company to use it.

Direct to Consumer (D2C)

This happens when a brand sells its product directly to the customer without using a retailer, distributor, or wholesaler. For example; when it does so through social networking platforms such as Facebook, Instagram, Pinterest, Snapchat, among others.

What Are Some Examples of Types of E-commerce? 

Retailer:

It is when a company sells a product directly to a consumer.

Wholesale:

This is when a company sells products in bulk, usually to a retailer who sells them to the consumer..

Dropshipping

It is when a product is sold, manufactured, and shipped to the consumer by a third party.

Crowdfunding

It is when money is collected from consumers before a product goes to market, with the intention of having enough capital to bring it to market.

Subscription

It is when the consumer automatically buys a product or service that he or she will use on a regular basis.

E-commerce currently handles a high volume of trade sales in the world. Among some of the main companies in E-commerce are: 

Amazon, eBay, Walmart, Amazon, Shopify, Aliexpress, Alibaba, Home Depot.

Explore more glossaries