Electronic commerce or e-commerce as it’s more commonly referred to is, in simplified terms, online shopping. More specifically it is all the activities or tasks that go on including finding products, selling them, purchasing them, hiring people, and many other activities on the world wide web. There are five main types of electronic commerce categories: business to consumer, business to business, business processes, consumer to consumer, and business to government. (Schneider, 2004)
E-commerce is one of the most common ways for consumers to shop, do research, and stay in contact with family members. Christmas shopping, birthday gifts, flowers, anything can be purchased on the internet. Families can upload pictures and share them in online albums such as Snapfish.com or Yahoo photos. Additionally, families can create their own websites to keep others apprised of news. These sites are typically free to create and are supported through advertisements on the page. Advertising is common on internet sites both as banner ads and as pop-ups. Consumers are online all day long, 24 hours a day, this allows advertisers to reach a very large audience and also helps e-tailers be available to their customers at any time that is convenient for them.
All the advantages of electronic commerce for businesses can be summarized in one statement: Electronic commerce can increase sales and decrease costs (Schneider, 2004). As are for many things money is a motivating factor in online sales. Web based organizations do not have to have large store fronts where they pay rent, insurance, and have additional employees.
Two of the most commonly used categories of e-commerce are B2B (business to business) and B2C (business to consumer). B2B, also known as e procurement, is how a company gets its supplies. From the text, one example of this would be Grainger.com a website that sells industrial supplies to large and small business. (Schneider, 2004) B2C is consumers shopping on the web. On a business to consumer site products are purchased by the consumer from the business organization. Examples of these types of sites are Target.com, Bestbuy.com, and Walmart.com (Schneider, 2004).
Business 2 Business Business 2 Consumer
Higher Volume of business Less interaction/information exchange
Contracts between seller and buyer No contracts for regular retail transactions
Sells directly to consumers Sells directly to consumers
Business-to-business electronic commerce (B2B) typically takes the form of automated processes between trading partners and is performed in much higher volumes than business-to-consumer (B2C) applications. (Wikipedia, 2006)
Business to business e-commerce has many facets and focuses. B2b typically occurs in a much higher volume than B2C. An example of a B2B would be a medical office ordering its office supplies from OfficeDepot.com. Online purchasing of inventory allows for organizations to perform faster.
There are five classifications of B2C e-commerce: Direct Sellers, e-tailers, manufacturers, online intermediaries, and brokers (Wikipedia, 2006). There are four types of payment methods for B2C including:
? Financial cybermediary: an internet based company that facilitates payment between two individuals online usually by credit card.
? Electronic Checking: transferring money from your checking account to another over the internet.
? Electronic bill presentment and payment (EBPP): a computer system that generates electronic bills and sends them to customers over the internet.
? Smart Card: a.k.a. Debit cards that contain information about how much money you have and deduct purchases from that total. Provided by all banks. (Wikipedia, 2006)
There are many benefits to consumers shopping online as mentioned previously including faster service, more research capabilities, as well as 24-hour customer service available through email and ‘Frequently Asked Question’s’ pages. The downside to being able to do more research is that there is not as much loyalty as with a “bricks and mortar” store where a person will frequently shop.
While there are many types of transactions that occur online B2B and B2C are two of the most common e-commerce activities. These two types of e-commerce create a great deal of revenue both for the e-tailers and for advertisers. With the continued growth of the world wide web e-commerce activities will continue to expand and generate increased profits for e-tailers, options for consumers and exposure for advertisers.
Wikipedia, 2006, Business-to-consumer electronic commerce, Retrieved from www.wikipedia.com August 16, 2006
Introduction to Electronic Commerce, 2004, Gary Schneider, Retrieved from the UOP rEsource website August 16, 2006