Have you ever wondered what e-commerce is exactly? This is quite likely, because e-commerce is in vogue today more than ever. However, like many, you may not know the exact meaning of this term, nor the differences between e-commerce and other related concepts.
The objective of this post is to give you a precise definition of e-commerce and to explain how it differs from other similar concepts. We will also review the different types of e-commerce, as well as the advantages of e-commerce over traditional commerce.
Are you ready to discover everything you need to know about e-commerce?
Concept: what is e-commerce?
According to Wikipedia, e-commerce, or electronic commerce, is… “The financial exchange of goods, services and information through computer networks, including the Internet. »
In other words, it is a business that manages payments by electronic means.
Differences between e-commerce and e-business
E-commerce and e-business are two concepts that tend to be confused. In reality, they have nothing to do with each other.
E-commerce refers only to the transaction of goods and services between a buyer and a seller. E-business, on the other hand, refers to the entire process to be implemented in order to manage an online business.
Within e-business, we find for example (links in English):
- Inbound marketing
- The promotions
- Stock management
- The SEO
- Email marketing
As we can see, the concept of e-business is much broader than that of e-commerce. As a type of business model, e-commerce is part of e-business.
The different forms of electronic commerce
The world of e-commerce is very vast and includes several distinct models. It is possible to make 2 classifications:
A global classification based on the business model (who sells and who buys)
Another one based on the business model.
According to the commercial profile
Each business is directed to a specific type of customer. This allows us to distinguish the following types of e-commerce:
B2B (Business-to-Business): companies whose end customers are other companies or other organizations. For example, construction equipment store for architects or interior designers.
B2C (Business-to-Consumer): companies that sell products or services directly to end consumers. This is the most common form, and there are many examples in the fields of fashion, electronics, etc.
C2B (Consumer-to-Business): portals on which consumers offer a product or service those companies can acquire. These are the classic freelance job portals such as Elance, Odesk, Humaniance, Hopwork, etc.
C2C (Consumer-to-Consumer): companies that facilitate the sale of products between consumers. The most telling examples are eBay, Leboncoin or any portal for selling second-hand items between individuals.
These forms of electronic commerce are the most common. There are also other types, such as G2C (Goverment-to-Consumer), C2G (Consumer-to-Goverment) or B2E (Business-to-Employer).
As we can see, e-commerce brings together realities that go beyond a simple purchase in a shop.
According to the business model
The online world is still a small sector. Technological changes are constant and new online businesses are responding to new needs.
The type of e-trade can be differentiated according to the income generated or the way in which the exchange between buyer and seller takes place:
Online shop with its own products: this is the first thing you think about when you think about e-commerce. The same features as a physical shop, in an online version.
Dropshipping: for the customer, it seems to be a normal e-commerce. The difference is that it is a third party who sends the product, not the seller. To know more about dropshipping, we advise you to read our complete guide dedicated to dropshipping (in French).
Affiliate E-commerce: Affiliate shops go even further than dropshipping. In this case, not only does the shop not send the product, but the sale does not take place on its platform. E-commerce redirects the customer to another store that pays him a commission once the sale is completed. Affiliation with Amazon is the most common. For example: Biodegradable.es. If you are interested in these models, do not hesitate to read our articles (in English) dedicated specifically to affiliate marketing or even to sales without stock.
Membership: this type of e-commerce seeks to ensure that its customers make recurring purchases. The preferred way to obtain them is through a periodic subscription (weekly, monthly, quarterly, etc.). This type of membership is currently in vogue with “surprise boxes”. This is a box sent monthly (or at another frequency) and contains certain products. One of our customers, NUOOObox, offers, for example, natural and organic cosmetic boxes. The advantage of this model is that it ensures a recurring income each month.
Marketplace: a marketplace is a shop with several shops. This is a website on which different sellers offer their products. Amazon is an example of a marketplace par excellence: several companies offer their products for sale on the platform in exchange for a commission paid to Amazon.
Services: an e-commerce does not necessarily sell products. Training, advice, coaching and, in general, any time exchanged for money. It is a good and viable option to start without taking any risks.
As we have seen before, progress in this area is daily, and new types of electronic commerce are constantly emerging.