What Is Ecommerce: e-commerce Definition, Types, Benefits, And More — Bizzpreneur

What is Ecommerce? Hmm, a very good question!

But before answering your question, I need to explain how rich and successful eCommerce can make you become.

E-commerce, ecommerce, eCommerce, or e commerce. Any way you wish to spell it is one of the most popular and fastest-growing business models in this digital age. It is a business model that is capable of bringing in millions of money every single day, week, month, or year.

That means having just one ecommerce platform could make you a billionaire. For instance, the likes of Jeff Bezos (CEO of Amazon), Jack Ma (Owner of Alibaba), and Pierre Omidyar (Founder of eBay), became billionaires just by building ecommerce sites or platforms.

Now you see how powerful ecommerce could be?

If this made you motivated and now thinking about how to start your entrepreneurship journey around ecommerce, that’s great! But not having an in-depth understanding of eCommerce is just like walking in a forest without a map. [“Hey don’t worry, you can’t get lost here”]. Because, in this article, I’ve explained, what is ecommerce, its types, examples, and more.

Understanding these could serve as a guide throughout your ecommerce journey. Keep reading to learn more!

What Is Ecommerce?

Ecommerce simply refers to the buying and selling of information, goods, and services via the internet. The full meaning of Ecommerce is electronic commerce, which is also known as internet commerce. Apart from buying and selling goods and services, the term ecommerce also encompasses activities like internet banking, online auctions, payment gateways, and online ticketing.

Ecommerce originally began August 11, 1994, where a guy named Phil Brandenberger made the first-ever online transaction, using his MasterCard to purchase Sting’s Ten Summoner’s Tales from an American retail store, via the internet for a sum of $12.48.

Since then, the rapid growth of ecommerce is unimaginable. In fact, over two billion people purchase goods or services online (via the internet) in 2020, and during the same year, ecommerce retail sales surpass 4.2 trillion US dollars worldwide. More so, the ecommerce market share in the US is projected to reach 21.8% by 2024.

Types Of Ecommerce

There are mainly five traditional types of ecommerce models. What are they?

1. Business To Consumer (B2C)

This is the most popular ecommerce model. Business to consumer (B2C) is simply when a business sells goods or services to an individual (usually the final consumers). For example, you buy a backpack from an online retail store.

2. Business To Business (B2B)

Business to business is when a business sells goods or services to another business. For instance, manufacturer to wholesaler, or wholesaler to retailer. Dropshipping is one of the typical examples of the B2B ecommerce model.

3. Consumer To Consumer (C2C)

C2C is simply when a consumer sells goods or services to another consumer. This type of ecommerce model is common among eBay sellers. (e.g, you sell your old furniture, bike, or toy to another consumer).

4. Consumer To Business (C2B)

This is when a consumer sells their own goods or services to a business organization or firm. Examples of this customer to business (C2B) are:

• Freelancer offering services to companies.
• Influencer offering exposure for brands.
• Photographers licensing their photos for businesses.
• Consultants offering their consultation service for companies.

5. Direct To Consumer (D2C)

This may sound strange. Well, this is not generally new, but it actually should be new to your hearings. Because it is kind of the newest ecommerce model. D2C is when a company or brand sells directly to consumers without going through a wholesaler or retailer. A typical example of the D2C is subscription plans. (e.g you buy a web hosting plan from Bluehost).

Ecommerce Examples

Ecommerce can take on a variety of different forms involving independent freelancing, small businesses, and even larger firms. This is also not limited to different objects being exchanged as part of online transactions.

What are the examples of ecommerce?

Retail

This is simply the sale of a product directly to a consumer without any intermediary or mediator.

Wholesale

This is the sale of products in bulk to the retailers who then resell them directly to the consumers.

Dropshipping

Usually involves a mediator. This is simply the sale of products that are manufactured and shipped to the consumer by a third party (the dropshipping store owner, or Dropshipper). Dropshipping is the most popular and one of the fastest-growing ecommerce examples.

Physical products

Physical products as an example of ecommerce mainly focus on the shipping of goods. (i.e, any good that involves the replenishment of inventory and orders to be shipped physically to customers as sales are made).

Digital products

Simply the opposite of physical products. This means downloadable items, templates, courses, and e-books that must be purchased to gain access to it or licensed for use.

Services

These are mainly freelance skills like graphic designs, writing, proofreading, coaching, Influencer marketing, and more — provided in exchange for compensation (usually money).

Subscription

We’ve already talked somewhere in this article about subscription being a good example of D2C. Absolutely!

Subscribe is the regular recurring phase of a product or service on a regular basis (usually monthly or annually) until the customer (subscriber) chooses to cancel.

Crowdfunding

When sellers raise necessary money or startup capital in order to bring their products into the market, this is simply known as crowdfunding. In a simple sense, the consumer pays in advance to the seller who then creates and ships the purchased item(s).

Top Ecommerce Sites

Ecommerce sites or online marketplaces are platforms that enable sellers to showcase their products to reach a larger audience (buyers). These platforms are popular among customers and are also rapidly growing because it’s almost inconvincible in today’s world that businesses wouldn’t be using these digital spaces to drive sales.

Now, let’s take a look at some of the top and most successful online marketplaces or platforms.

Amazon

Without a doubt, Amazon is the biggest and most popular online retail marketplace. In fact, statistics show that Amazon is the largest eCommerce seller in the US, with a net income of 21.33 billion US dollars in 2020. It is a platform that is well known for retail sales.

Alibaba

Alibaba is a Chinese ecommerce company. This company is one of the world’s biggest and by far the most successful eCommerce platforms that encompasses both retailers and wholesalers. The platform is best for big businesses, manufacturers, or established brands who look to sell in bulk. Alibaba’s net income in the fourth quarter of 2020 was amounted to around 77.98 billion yuan.

eBay

eBay is an online marketplace that basically connects retailers and consumers all around the globe. Despite being one of the first ecommerce platforms, eBay still dominates the digital market space, especially in the US and UK. In fact, eBay has around 187 billion active users in 2021, with over 1 billion live listings around the globe.

Walmart

Once the top eCommerce retail platform before being overtaken by Amazon. Despite that, Walmart is still one of the most popular online retail platforms that also offers traditional retail sales, as well as grocery delivery and not limited to subscription service.

Esty

With around 4.3 billion active sellers on Esty in 2020, Esty is a perfect platform or marketplace where you can sell mainly creative arts. Not only that, as you can also sell old furniture and some good things that aren’t useful for you anymore (but in a good condition). That means this eCommerce platform is mainly for hand-made products and vintage items.

Fiverr

I referred to this ecommerce platform as the Amazon of digital services. Fiverr is a platform that connects businesses to freelancers or remote workers. Fiverr generated a revenue of around 52.3 million US dollars in the third quarter of 2020 with active buyers to be around 3.1 million in September 2020. This is a great platform for businesses looking to outsource some of their works.

Upwork

Similar to Fiverr, Upwork is another giant digital service marketplace. Formerly known as oDesk, Upwork is an online marketplace where buyers (businesses) meets with sellers (freelancer) to transact business. In a nutshell, Upwork is a website for buying and selling of services only. Examples of services transacted on Upwork include graphic designs, freelance writing, consultancy, branding, marketing, programming, and more.

Conclusion:

Ecommerce is one of the fastest-growing business models. Though, it is divide into different categories and sub-categories. If you’re just starting off your journey as an entrepreneur, the easiest business model I recommend you to start with is ecommerce businesses. Why? because it offers many benefits such as:

Well, saying its benefits doesn’t mean it doesn’t have its own downside also, but staying focused, consistent, disciplined, and dedicated can make you overcome its challenges.

Just A Quick Recap.

Here’s just a sneak peek of what is covered in this article.

• What is Ecommerce?
• The types of ecommerce, and
• its examples.

I hope this content is useful?

Stay tuned for more!

Originally published at https://bizzpreneur.com on May 4, 2021.