E-commerce

Updated: 08/16/2024 by Computer Hope
electronic commerce

Short for electronic commerce, e-commerce, or e-business is any purchase or distribution of services and products on the Internet. Essentially, it's any online monetary transaction. However, online shopping is what comes to most people's minds and is a popular example.

Note

IBM coined the term e-business.

Examples of e-commerce sites

E-commerce encompasses a very wide array of transactions; some common ones are listed below.

What are the types of e-commerce?

E-commerce transactions can be either B2B (business-to-business), B2C (business-to-consumer), or C2C (consumer-to-consumer).

What are the advantages of e-commerce?

Below lists the biggest advantages to doing e-commerce.

  • Audience - When creating an online store, you immediately access to a worldwide audience.
  • Setup - Setting up an online store can be much cheaper and sometimes easier than a physical store.
  • 24/7 - An online store is always open 24 hours a day, seven days a week.
  • Scalability - It's easier to scale an online business.
  • Analytics - Because everything in your store is done through a computer, it's easier to collect data and personalize the shopping experience.
  • Advertise - Anyone who shares their e-mail address or creates an account can be e-mailed about future deals, helping get repeat business.
  • Reviews - Online shopping platforms can allow customers to leave reviews about products to help other customers make purchasing decisions.

What are the disadvantages of e-commerce?

Below are the biggest disadvantages of e-commerce vs. typical commerce at a store.

  • Competition - When setting up an online store, you're competing against other stores all around the world and not only a few other local stores.
  • Security - Online stores are more vulnerable to being attacked by many computer crimes.
  • Advertising - With more competition and "no traffic," you'll have to pay more to advertise your services.
  • Customer service - There is a lot to be said for the human interaction you'll get from visiting a local store. This human interaction is not possible online.
  • Shipping - Any physical object sold must be delivered to the customer, which takes time and money.
  • Returns - Online retailers have a higher return rate since customers cannot see the item until it's received and because of damage during shipping. Dealing with any returns adds to the cost of doing business and loss of customer satisfaction.

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