What is E-Commerce?

E-commerce(Electronic Commerce) is the process of making commercial transactions electronically over the internet. It is a setup of selling and buying products and services, making transactions using online e-commerce websites. E-commerce has now become the backbone of the economy.


E-commerce was first introduced by English Entrepreneur Michael Aldrich in 1979. He was the CEO of a Computer organization “Reinfusion Computers” for a long time from 1980 – 2000. He originally built up the idea of web-based shopping now called “online shopping”. He created a channel for online exchanges between B2B (Business to Business) and B2C (Business to the consumer). The idea of the web-based business was taken from EDI (Electronic Data Transfer). In 1992, Charles M. Stack presented the first online Book Store. After two years in 1994, Jeff Bezos introduced Amazon.com as an online book store.

Numerous organizations and entrepreneurs have now presented their E-trade sites. Ebay.com, Rakuten.com, aliexpress.com, Walmart.com, and shopify.com are well-known online business sites.

Models of E-commerce:

E-commerce operates in the following four models:

1: B2C (Business to consumer)

BC2 is the most common business model. In this model, businesses sell their products directly to consumers involving only two parties, one the producer and the other is the individual decision-maker, a customer. Example: Amazon, Flipkart, McDonald’s.

2: B2B (Business to Business)

B2B, also known as e-biz, is the platform where business exchanges their products, services, and information via the internet. In this model, a business buys products in bulk from the producer who then sells it to other companies.

3: C2B (Consumer to Business)

The C2B is a business model in which consumers sell goods or offer services to companies. This approach gives consumers the power to name their prices or have businesses directly compete to meet their needs. For example Elance(Upwork).

4: C2C (Consumer to consumer)

C2C or customer to customer model is where two consumers can trade via the internet. Examples: Olx, eBay, Craiglist.

READ ALSO: What is blockchain?

Advantages of E-commerce:
  1. Maintenance: It is relatively easy to set up and maintain an online store as compared to a traditional shop. There’s less effort from the seller side without any physical interaction with the customers.
  2. Global Reach: E-commerce provides the sellers as well as consumers with a global reach. Sellers and buyers can meet through virtual means, despite their location anywhere in the world.
  3. Convenience: E-commerce offers great convenience to the user. Buyers have easy access to a variety of goods that brands offer. They can shop 24/7 online.
  4. Low Cost: E-commerce has minimized the overall expenditure and efforts of buyers and sellers by lowering the transaction cost.
  5. Keeping up with the trends and get huge discounts: It is easy to understand trends with the dropship and customer Id Tracking technologies. E-commerce offers a high quality of services with amazing discounts.
Disadvantages of E-commerce:
  1. Security Breach/ Cyber Violation: Credit card fraud is one of the major problems that E-business holders face. Also, hackers can hack the website as a result confidential information could be stolen.
  2. No guarantee of product Quality: Despite the fact that internet business offers significantly more data about the product, it doesn’t permit you to encounter any of it before checkout, hence you may buy a low-quality product at a high price. Even there might be issues like late delivery etc, leaving the customers unhappy.
  3. Greater chances of scams: Since anyone can start an online business, the chances of landing into scams have increased.
  4. Internet: In many areas, the internet connection is still a problem. For e-commerce, the internet is the main requirement, so in areas with no internet connection, it might be a hindrance.
  5. Tax Issues: Tax matters are always complicated. You need to very update with tax regulations worldwide.

Samreen Khan

Writer and Blogger

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