What is eCommerce? Definition, examples and advantages
What comes to mind when you hear the word eCommerce? Perhaps eBay…Amazon…Turis…and the like? Or probably thoughts of taking your retail or wholesale store online flood your mind? Hopefully, you’ll have all that figured out by the end of this short definitive guide. In the following few paragraphs, we’ll be debunking everything under the sun regarding eCommerce.
To give you a heads-up, this is your complete crash course in electronic commerce (eCommerce). Some key lessons to look forward to include:
- A simplified meaning of eCommerce
- The history of eCommerce in a nutshell
- Different models of eCommerce
- eCommerce examples
- Vital e-commerce advantages, plus much more.
So, take a pen and notebook, and let’s jump right in!
What is eCommerce?
Ecommerce is an abbreviation of Electronic Commerce. So essentially it is the activity of selling and buying products and services via the Internet. The purchasing of products and services and the transactions of payment all take place online. Although taking place in different variations earlier, eCommerce, as we know it today, was revolutionized by the introduction of the Internet in 1991.
The history of eCommerce
The first real eCommerce transaction took place in August 1994, when Dan Kohn sold a Sting CD to one of his friends online. Since then, the reach and importance of eCommerce have increased significantly and are expected to increase further in the future.
In 2015, 7.4% of worldwide retail sales came from eCommerce. In 2018 this figure had increased to 11.9%.
It is expected that the eCommerce share of global retail sales will increase to 22% in 2023.
What are the different eCommerce business models?
There is a long list of other types of eCommerce. A few examples are:
- B2C: (Business-to-Consumer): B2C is the process of selling products from a business to a consumer. Being the most common eCommerce business model, shoppers essentially place orders for items online without the need for a third-party intermediary. Most people think about the B2C model when they hear the phrase “eCommerce business.” Examples include Amazon and eBay.
- B2B (Business-to-business): B2B means that a business is selling products to other businesses. A good example of B2B is a brand that sells its products to retailers (both physical and webshop). These retailers resell the products to the end-consumer. The sell from the retailer to the consumer is B2C, while they sell from the brand to the retailer is B2B. Another example of B2B could be a software company – like us here at Turis – that provides a software service that other businesses can use and benefit from.
- C2C (Consumer-to-Consumer): Consumer-to-consumer is a setup where consumers of certain goods or services are directly connected. Here, no company is involved as consumers connect and sell personal items to other consumers. C2C models often comprise the sale of secondhand goods such as used bikes, cars, clothes, etc.
- C2B (Consumer-to-Business): A C2B model is the reverse of B2C, and it entails consumers selling products and services to businesses. A typical scenario would be a freelance writer selling written content to a company.
Examples of eCommerce
Ecommerce has undoubtedly created a booming digital economy, especially during the pandemic. All indications have pointed towards a perfectly shaped industry where anyone can buy anything without leaving their home. Different types of eCommerce are responsible for serving specific market segments, including retail, wholesale, and consumer.
Here are examples of the various types of eCommerce:
Direct Sales: In direct sales, the seller offers their product directly from their own online eCommerce shop – be that B2B or B2C. A customer orders directly from the seller and pays the seller directly as well. And with research showing that more than 50% of customers prefer ordering directly, this is a model to watch out for in the future.
Wholesale: A wholesale eCommerce entails selling products in bulk, typically to retail businesses. The retailers, in turn, sell the products to the final consumers at a profit.
Digital products and services: Electronic products such as ebooks, images, and templates are a big part of the eCommerce concept. Services including lessons and online tutorials fall under this category too, and they represent a big chunk of the eCommerce transaction volumes.
Subscriptions: These are recurring purchases such as magazine subscriptions, radio or TV programs, etc. Companies dealing in digital subscriptions are fast-cementing their names in the eCommerce space.
Crowdfunding: Startups raise capital on crowdfunding platforms to finance their business activities. These platforms essentially belong to the eCommerce category since investors digitally purchase shares of a business by offering capital to startups.
Marketplaces: In a marketplace, there is a third party in charge of the eCommerce platform. The marketplace does not own the products sold on its platform, but merely allows sellers and buyers to find each other via its platform. As payment for their service, they usually take a small cut of the transaction costs.
What are the different types of eCommerce websites
There are different types of eCommerce websites based on several variables, including business models, target customers, level of customization, etc.
Ecommerce websites will typically specialize in different areas, with Amazon going for the retail market, while Turis and Alibaba major in the wholesale business space. Others will operate both in the retail and wholesale fields.
As a specialized B2B eCommerce tool, Turis helps wholesale businesses and serves the retail market. Unlike retail-focused platforms such as eBay, Turis enables wholesale merchants to build online shops and websites with seamless order fulfilment functionalities. As earlier indicated, this model is purely based on businesses serving others in the retail niche. Our eCommerce tool is a perfect example, since it connects wholesale enterprises with their retail clients globally.
Of course, it does more than simply connect the two parties; it also makes the ordering process less manual and ensures that wholesalers can invite retailers to their shops either to browse for future purchases or immediate orders. Turis also allows wholesalers to integrate their ERP and accounting software to transfer wholesale orders and eliminate manual order handling and reduce the risk of errors.
Alibaba is a wholesale marketplace. The site comprises retail, wholesale, manufacturers, and distributors, all under one roof, primarily drawn from the Chinese market.
The tool permits businesses to create online stores and fulfil orders using Alibaba’s Trade Assurance Policy. Alibaba is home to hundreds of suppliers and manufacturers with physical stores across the entire country. Being a highly competitive marketplace, more established businesses are more likely to survive compared to startups.
Amazon is an eCommerce platform where you can buy products directly from your tablet, phone, or computer. It operates as a direct eCommerce store and marketplace within the B2C and C2C markets. This means that you can sell on Amazon both as a consumer and a business.
As a result, Amazon is primarily regarded as a retail eCommerce site since a majority of the merchants essentially sell a few business items and new/used personal products. Thus, the platform’s predominant business model, B2C, occurs when a business directly serves the final consumer of its service.
Other successful eCommerce websites include Shopify (B2B and B2C), BigCommerce (B2B and B2C), Magento (B2B, B2C), and more. For more info about eCommerce trends, you can read here.
Advantages of eCommerce
As of now, it should be obvious that the main effect of eCommerce is the digitization of sales. The advantages of digitization, however, are numerous.
The most obvious advantage is the time and money businesses save from not having to handle orders analogically.
Using an eCommerce platform instead of manual order handling also means less risk of order errors. If you want to learn more about how to get started with your B2B eCommerce solution, just follow the link.
Do you want your company to enter into the digital era?
Then you should consider investing in your own eCommerce platform. Turis is the most affordable platform you will find on the market – see for yourself.
We can relieve those pains. And more.
Optimizing your wholesale is what we do. Whether it’s automating processes or help you generate more sales.
Users love to work with Turis, both from the Brand and Retailer side: